4 Trade Ideas for Meta: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Meta, $META, comes into the week in consolidation after a move off a low. The low was worse than a 113% extension of the full retracement of the post pandemic move higher. The consolidation is short of filling the gap lower from the last earnings report. A break above resistance would set a higher low and make for a higher high, a young uptrend.

The RSI is holding at the midline with the MACD rising but negative. There is resistance at 117 and 123.50 before a gap fill at 128.50 then 138 and 154.50. Support lower comes back in 2016 at 109 and 108 then 104.50 and 102 before 100. The stock does not pay a dividend. The company is expected to report earnings next on January 31, 2023.

The December options chain shows big open interest at the 110 strike on both the puts and calls with the higher 115 and 120 strikes next. In the January chain open interest is spread from 140 to 70 on the put side, biggest at 95. On the call side it is spread from 95 to 160, biggest at 120. In the February chain, covering the next earnings report, it is spread from 85 to 120, biggest at 100. On the call side it is focused at 105 then 85.

Meta, Ticker: $META

Trade Idea 1: Buy the stock on a move over 117 with a stop at 109.

Trade Idea 2: Buy the stock on a move over 117 and add a December 115/110 Put Spread ($2.60) while selling the February 150 Calls ($2.30).

Trade Idea 3: Buy the December/January 130 Call Calendar ($1.85) while selling the January 90 Puts ($1.75).

Trade Idea 4: Buy the February 90/120/135 Call Spread Risk Reversal ($0.75).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the shortened Thanksgiving week and with November Options Expiration in the books, saw equity markets showed continued promise.  They held up after a very strong previous week and in the wake of the repercussions following a massive failure in the cryptocurrency space.

Elsewhere look for Gold to continue its short term reversal lower while Crude Oil consolidates in a downtrend. The US Dollar Index continues to pullback in the uptrend while US Treasuries bounce in their downtrend. The Shanghai Composite looks to continue the short term uptrend while Emerging Markets experience a stalled bounce in the downtrend.

The Volatility Index looks to continue towards normal levels making the path easier for equity markets to the upside. Their charts look decent on the shorter timeframe with wide paths higher in the SPY and IWM but a consolidation over prior resistance on the QQQ. On the longer timeframe the nascent moves higher are far short of confirming a reversal. Use this information as you prepare for the coming week and trad’em well.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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