4 Trade Ideas for PayPal: Bonus Idea

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

PayPal, $PYPL, comes into the week at the top of a resistance zone that has been important for the past 12 months. This range has been midway between the Covid low and a 113% extension of the retracement of the post pandemic move higher, meanings the price has been below the Covid low for more than a year. The Bollinger Bands® are openings higher as it reaches the top of the range, but there are upper shadows appearing on the candles, suggesting some exhaustion is possible. The RSI is rising in the bullish zone with the MACD positive and moving higher. There is resistance at 67.75 and 71 and a gap to fill to 72.50 then 74.50 and 76.25 before 78 and 83.50. Support lower sits at 65 and 63 then 62 and 61. Short interest is low at 2.2%.

The stock does not pay a dividend. The company is expected to report earnings next on July 31st. The June options chain shows biggest open interest at the 60 and 65 put strikes. On the call side it is biggest at 75 then 65 and 70 before 72.50. In the July chain open interest builds from 67.50 to a peak at 60 then tails to 50 on the put side. The call sees a build from 62.50 to a plateau from 67.50 to 80 before tailing to 95. Finally, the August chain has open interest spread from 65 to 52.50, biggest at 6, on the put side and a peak at 60 then tailing higher to 90 on the call side.

PayPal, Ticker: $PYPL

Trade Idea 1: Buy the stock on a move over 68.50 with a stop at 65.

Trade Idea 2: Buy the stock on a move over 68.50 and add a July 65/60 Put Spread ($1.10) while selling the August 80 Call ($1.03).

Trade Idea 3: Buy the July/August 72.50 Call Calendar ($1.68) and sell the July 60 Put (37 cents).

Trade Idea 4: Buy the August 60/70/75 Call Spread Risk Reversal (35 cents).

Premium Content

The Best

The Rest Premium                                                                                         

Free Content

The Rest

Start of Summer Annual Sale! Hi all the Start of Summer Annual Sale is on at Dragonfly Capital. Get an annual subscription for 38.2% off or pay quarterly for 15% off. Both auto-renew at that discounted rate until you decide to leave.

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 with the first week of June in the books, saw equity markets were mixed with the large caps and tech heavy Nasdaq showing renewed strength while small caps continue to flounder.

Elsewhere look for Gold to continue to consolidate the long move higher while Crude Oil moves lower in a consolidation range. The US Dollar Index continues in broad consolidation while US Treasuries continue their long term downtrend. The Shanghai Composite looks to continue the short term move lower while Emerging Markets continue the short term move lower in a consolidation channel.

The Volatility Index looks to remain very low and stable making the path easier for equity markets to the upside. The charts of the SPY and QQQ look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY continue to step higher and look strong as well with an eye on potential momentum divergences. The IWM continues to be dead money, as it has been for the past 2½ years. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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.

blog comments powered by Disqus
Dragonfly Caps Blog