My Dad always used to say, “You can pick your friends, you can pick your nose, but you can’t pick your friend’s nose.”
Whatever that means.
He just loved to tease us.
We do pick our friends and who we consider to be our family.
As I’m locked up in Covid quarantine, those folks — who we usually spend Easter with — mean more to me than ever!
Time to Trade
I’m looking at the Home Depot (Ticker: HD) stock chart … and it has come quite a long way in the last month.
As you can see, it has traded directly up from the March 5 low of $246.59 to at $307.75 on Thursday — less than a dollar off its all time high!
That’s up 25% in 19 trading days.
Shopper Alert: Thursday’s candlestick is also forming a hanging man.
Remember a hanging man candlestick occurs at the top of an uptrend and has a small body and long lower shadow. That means the stock traded lower during the interval which could signal the bulls are tiring.
I think HD could pull back a bit in the next two weeks, so I’m looking at a put spread in the Apr16 expiration cycle.
I like buying the Apr16 305 puts with an implied volatility of 17.39 and selling the Apr16 195 puts with an implied vol of 19.61.
I will pay $2.30 to $2.35 for the ten point put spread with two weeks to expire.
I will take my loss if the spread trades down to $1.50 and sell for profits $3.50 and higher.
- My Twitter (Ticker: TWTR) Apr16 63/69 call spread idea was, again, a good idea but the stock opened higher and I chose not to chase the spread. You would have had to pay more than $2.00 for it. I took a pass.
- Remember my Taiwan Semiconductor (Ticker: TSM) trade idea of March 15th? I was going for the longer-term play, buying the Oct15 120 calls and selling the Apr16 130 calls. I put the spread on for $10.35 with the stock trading $118.30.
The stock traded down to $107.89 and those Apr16 130 calls traded down to $.60. I sold them at $2.15, so I should have bought them in and rolled into selling the May 130 calls.
Thursday those calls closed around $1.90 with the stock at $124.80. I need to watch these and buy them in to roll into the May calls.
Enjoy your long weekend AND your family! Happy Easter!
Thanks for Reading … See You Next Tuesday!