4 Trade Ideas for Seagate: Bonus Idea

• Posted by Greg Harmon
• on February 12th, 2024

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

Seagate Technology, $STX, comes into the week continuing higher after rounding out of a pullback over the course of 2023. It has now moved up from a bottom in November 2022 to retrace 61.8% of the drop. The RSI is in the bullish zone with the MACD positive and crossing up. There is resistance at 91.50 and 94.25 then 100 and 106.50 before 109 and 112 then 116.50. Support lower comes at 86.75 and 85 then 81.50 and 80. Short interest is moderate at 5.2%. The stock pays a dividend with an annual yield of 3.13% and will begin trading ex-dividend March 20th.

The company is expected to report earnings next on April 18th. The February options chain shows open interest focused at the 85 strike on the put side and at the 89 and 94 strikes on the call side. The March chain has biggest open interest at the 90 strike for both puts and calls. The April chain has open interest spread from 90 to 75 on the put side, biggest at 90. On the call side it is biggest at 87.50. The at-the-money straddle suggests a $9.85 move by expiry, the day after that earnings report.

Seagate Technology, Ticker: $STX

Trade Idea 1: Buy the stock on a move over 89.50 with a stop at 85.

Trade Idea 2: Buy the stock on a move over 89.50 and add a March 87.50/82.50 Put Spread ($1.45) while selling the April 100 Calls ($1.27).

Trade Idea 3: Buy the March/April 95 Call Calendar ($1.52) while selling the March 82.50 Puts (83 cents).

Trade Idea 4: Buy the April 80/90/100 Call Spread Risk Reversal ($2.00).

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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 February options expiration, saw equity markets continued to show strength, especially on the large cap and tech indexes.

Elsewhere look for Gold to continue in consolidation while Crude Oil consolidates in a broad range. The US Dollar Index continues to drift to the upside in consolidation while US Treasuries pullback in their downtrend. The Shanghai Stock Exchange will be closed all week for the Lunar New Year holiday while Emerging Markets consolidate under resistance.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts also look strong, especially on the longer timeframe where the SPY and QQQ are up 14 of the last 15 weeks and 5 in a row. On the shorter timeframe the QQQ and SPY closed a record highs and look strong. The IWM is trying to break higher on the short term basis and make a run at the top of the 22 month channel. 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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