DIRS.INFO The most relevant business & tech news

☆ Troubling market internals warrant buying some portfolio protection — Here's how
▼ + stars: | 2024-05-22 | by ( Tony Zhang | ) www.cnbc.com time to read: +2 min

As equity markets print new all-time highs and the CBOE Volatility Index prints 52-week lows, this should be considered as a bullish outlook by all accounts. However, if we look under the hood, the internals during this rally concern me and in my opinion, warrants buying some protection on these all-time highs. If we look at the Sector Rotation RRG Chart, we see that over the past five weeks, the rally in the S & P 500 has been led by utilities, energy and staples. With materials and industrials also rolling over, we simply lack the confidence to call a strong bull market on the recent all-time highs. I'm going out to July and buying the $530 puts on the SPDR S & P 500 ETF Trust (SPY) for $7.35, which is only 1.3% of the SPY's value to buy over 2 months of protection.

Organizations: Trust

☆ Costco shares may be getting ahead of themselves into earnings. A bearish trade using options
▼ + stars: | 2024-05-15 | by ( Tony Zhang | ) www.cnbc.com time to read: +3 min

We'll review a "broken wing put butterfly" options trade to position bearishly on Costco. With a business model focused on memberships and rock-bottom prices, Costco (COST) has grown much faster than its peers and commands a significantly higher valuation. Over the past year, COST stock has rallied over 55%, nearly double what the S & P 500 returned over the same period. Additionally, with such a high-priced stock and options premiums elevated with earnings on deck in two weeks, we have to get creative to structure a trade to seek bearish exposure heading into earnings. I'm looking out to the June 7 th weekly expiration and buying a $700/730/775 broken wing put butterfly for $9.72 debit.

Organizations: Costco

☆ A bearish options trade on a one-time tech darling that could struggle in the new AI world
▼ + stars: | 2024-05-08 | by ( Tony Zhang | ) www.cnbc.com time to read: +2 min

I think shares of the one-time cloud computing darling are at risk of falling even lower and I will give a bearish options trade to capitalize on it. As CRM matures and growth rates moderate, it simply cannot continue to command the industry-leading valuations it once did and has to face the reality of its fundamentals. This suggests that CRM will likely continue to trade back towards the midpoint of the range in the $210-220 area. This makes a valuation that is 40% higher than the S & P 500 harder to justify when growth rates are slowing down significantly. The trade With earnings in three weeks, CRM options prices are slightly elevated and warrant using a spread to lower the cost of seeking bearish exposure.

Locations: Salesforce

☆ Beware AI stocks trading at rich valuations. How to profit from a pullback using options
▼ + stars: | 2024-05-01 | by ( Tony Zhang | ) www.cnbc.com time to read: +2 min

While Palantir (PLTR) is not a direct parallel, it is an AI focused company that trades at a rich valuation. These types of valuations are at risk as we grapple with the notion of potentially even higher rates from the Federal Reserve. After gapping higher above $21, PLTR has failed to see any follow through on the initial momentum. Moreover, momentum has now turned negative and its testing the $21 level as support, alongside a series of lower lows and lower highs. Since PLTR barely turns a profit, using EV to sales is a better valuation metric, which trades at over 21x.

Persons: PLTR Organizations: Federal Reserve, EV

☆ This payments stock appears to be bottoming. Using options to capitalize on potential gains
▼ + stars: | 2024-04-24 | by ( Tony Zhang | ) www.cnbc.com time to read: +2 min

However, it continues to operate a solid payments business with nearly half a billion active users each month. Over a longer period, a breakout above $68 could target the low $100s as an extended target to the upside. If we were to dive into the business, we see a payments company that focuses on delivering growth and improving margins. If PYPL traded at its industry and historical average of around 21x forward earnings, it would imply a stock price of $106 — just above our technical upside target. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR.

Persons: PYPL Organizations: PayPal

☆ Nike shares may be forming a triple bottom. How to bet on a comeback using options
▼ + stars: | 2024-04-17 | by ( Tony Zhang | ) www.cnbc.com time to read: +2 min

Nike has underperformed the market and its sector since mid-2021, but recently growth expectations from analysts have bottomed. With China's growth showing signs of a rebound and valuation near its historical low, it could be time for a comeback. We'll discuss how to set up an options trade to bet on a turnaround. Nike (NKE) has formed a triple bottom at the $90 support level over the past 3 years and recently it just bounced higher off this support. I'm going out to the June expiration to buy the $92.5/$100 call vertical at a $2.99 Debit.

Persons: We'll, I'm Organizations: Nike, Paris Olympics Locations: China

☆ Shares of the Temu-parent PDD are cheap, but could be risky. A way to play it using options
▼ + stars: | 2024-04-10 | by ( Tony Zhang | ) www.cnbc.com time to read: +2 min

I'll review a lower risk way to get long PDD. With lofty analyst expectations of over 50% annual revenue growth and 25%-plus EPS growth, PDD is downright cheap at only 13 times forward earnings. Despite the elevated growth rate, PDD remains very profitable with strong operating margins and FCF generation. However, I believe that the risk/reward is there for options buyers by using a vertical spread. PDD 1Y mountain PDD, 1-year Let's go out to June and buy the $120/$145 call vertical for a $8.10 debit.

Persons: PDD Organizations: PDD Holdings, Amazon, Walmart, FedEx

☆ This makeup giant is 'quite undervalued' and making a turnaround, says options trader Tony Zhang
▼ + stars: | 2024-04-03 | by ( Tony Zhang | ) www.cnbc.com time to read: +3 min

We've seen a noticeable uptick in volume and interest in Estee Lauder (EL) , after struggling significantly for the last two years to formulate a turnaround. Has the global makeup giant finally bottomed and proven that its business is investable again? In my opinion, with its strong expected future growth and high margins, EL is quite undervalued and offers an attractive risk/reward for investors to add exposure now in your portfolio. The trade The implied volatility rank of EL currently stands at 31%, which makes options on the expensive side. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR.

Persons: We've, Estee Lauder, Lauder

☆ Chip stocks are losing their mojo. How to trade it using options
▼ + stars: | 2024-03-27 | by ( Tony Zhang | ) www.cnbc.com time to read: +3 min

With semiconductor stocks losing momentum over the past few weeks, Intel's strength is starting to show some cracks and at risk of a pullback. Ever since, Intel (INTC) has been playing catch-up, and early last year, investors started to pay attention and boost the shares. The momentum turning negative, coupled with the poor relative strength, suggests INTC could be headed for some further downside towards its $37 breakout level. This leads to risks to the downside as relative strength and momentum slows for INTC. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR.

Persons: INTC Organizations: Intel, AMD Locations: China

☆ How to trade this energy play attempting a turnaround as oil tops $80
▼ + stars: | 2024-03-20 | by ( Tony Zhang | ) www.cnbc.com time to read: +3 min

As oil prices climb above $80 for the first time since late last year, energy stocks are roaring back with strength across multiple timeframes. As we review the energy sector, SLB stands out as a stock where value can be unlocked by the current environment. Despite a record year in 2023, SLB (SLB) traded lower this year on the back of geopolitical factors. As we evaluate the business, we know that SLB is the largest services and equipment provider for oil and gas exploration. The trade Despite implied volatility on SLB at the very bottom of its 52-week range, I still believe that the best trade structure for this trade would be buying a call vertical.

Persons: SLB, I'm

☆ A lower-cost options trade that wins if this cheap drug stock keeps making a comeback
▼ + stars: | 2024-03-13 | by ( Tony Zhang | ) www.cnbc.com time to read: +3 min

Let's analyze how to trade a drug stock that's made a terrific comeback and could have more upside from here. But there's a catch: The price of call options have become too expensive given the rally, so we need to think of lower-cost trade to bet on upside from here. Now that it's traded off those lows and started to outperform the markets, I have a follow-up trade. The trade Options on BMY currently are very expensive, so buying calls are out of the question. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR.

Persons: that's, BMY, it's Organizations: Myers Squibb, underperformance, pharma, Bristol Myers Locations: Bristol

☆ Overvalued stocks like this one are at risk of a pullback following the rally. How to capitalize on it
▼ + stars: | 2024-03-06 | by ( Tony Zhang | ) www.cnbc.com time to read: +2 min

As the equity markets grind to new all-time highs, stocks that have been bid up over the past couple of months significantly beyond their average valuation are at risk of a pullback. In my opinion, the upside from here is limited and an opportunity to fade this incredible strength and momentum. We're just trading up against this trendline and a potential stopping point for this rally. Additionally, momentum indicators have reached severely overbought conditions that statistically point to a potential pullback in the short run. GE is effectively trading at the same price as it was in 2017, when it earned nearly three times more profits.

Persons: it's Organizations: Electric, GE

☆ The rally is showing signs of exhaustion. How to protect your portfolio if a decline is coming
▼ + stars: | 2024-02-28 | by ( Tony Zhang | ) www.cnbc.com time to read: +3 min

Couple this with the multiple signals for exhaustion that are typical near market tops, it warrants taking action. Troubling technical signs We've seen the SPDR S & P 500 Trust (SPY) and Invesco QQQ Trust (QQQ) both exhibit higher highs in price while momentum and their advance-decline lines print lower highs. And lastly, these same signals are showing up across the major sectors, and individual stocks that have led this rally such as Nvidia. Overall, these are signs of exhaustion for this rally and raises the probability of a pullback. With the Wall Street's fear gauge, the CBOE Volatility Index ( VIX) , trading just above 13, purchasing downside protection on a portfolio using SPY options is relatively inexpensive.

Persons: Zhang Organizations: Nvidia

☆ An options trade to fade an overblown rally in this industrial giant
▼ + stars: | 2024-02-22 | by ( Tony Zhang | ) www.cnbc.com time to read: +3 min

In my opinion, this rally in GE is overdone and an opportunity to fade the strength. GE is trading at the same price as in 2016, when it was earning nearly three times more in profits. The trade structure that I prefer to use here is to sell options and collect premium while taking a neutral/bearish outlook. Selling a Call Vertical Spread is the structure that I would use for this GE trade. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR.

Persons: It's, it's Organizations: General Electric, GE

☆ A bet using options that a long-underperforming bank is finally turning the corner
▼ + stars: | 2024-02-14 | by ( Tony Zhang | ) www.cnbc.com time to read: +2 min

There has been a revolving door of CEOs, but Jane Fraser has seemed to catch investors' attention finally. As the bank shed unprofitable businesses and focused on generating revenue growth, the stock has not underperformed over the last 10 months. Additionally, I am quite comfortable as an investor buying into a bank that is trading at 7 times forward earnings. Options on Citigroup are not very expensive, so my preference is to capture the potential upside by using a simple call option. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR.

Persons: Jane Fraser, selloff Organizations: Citigroup, Citi

☆ Scooping up a cheap defense stock trading near a 52-week low while reducing the risk using options
▼ + stars: | 2024-02-07 | by ( Tony Zhang | ) www.cnbc.com time to read: +3 min

It might be surprising that as geopolitical tensions and the risk of a wider regional conflict in the Middle East rise, defense stocks have been lagging on the sidelines. With defense stocks trading closer to their 52-week lows, I believe that this presents an attractive risk/reward opportunity to potentially add some of these defense stocks to your portfolio. With these types of valuations, the downside is limited, and the upside remains sizable, especially given the propensity for defense stocks to outperform during escalations of war. The biggest risk to NOC is its ability to navigate supply chain costs and budget overruns, which recently dented its recent quarter earnings. The trade The implied volatility rank on NOC is currently sitting at 23%, which indicates that options are neither cheap nor expensive.

Persons: Lockheed Martin Organizations: Northrop Grumman, Lockheed

☆ As tech stocks slide, there's another giant that looks overextended. How to profit from the pullback
▼ + stars: | 2024-01-31 | by ( Tony Zhang | ) www.cnbc.com time to read: +4 min

On Wednesday, we started to see a little bit of the air taken out of today's bubble. We'll present a trade that wins if one of today's leading tech giants can't quite live up to the bubble hype. While almost all of today's tech and semiconductor companies generate significant revenue and profits — unlike the shells of the dot-com boom — the tech sector's performance has many parallels to the late 90's. Amazon looks stretched Looking at the short run, earnings for Amazon (AMZN) are on deck after the close on Thursday and at risk of a pullback with the rest of tech. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR.

Persons: it's, I'm Organizations: Microsoft, AMD, UPS

☆ This underwater China EV stock is primed for a 'significant rally,' according to options trader
▼ + stars: | 2024-01-24 | by ( Tony Zhang | ) www.cnbc.com time to read: +3 min

With the Chinese equity markets lagging further behind, China has now launched fiscal and monetary policy to stabilize it. This provides an opportunity for a significant bounce in an oversold and undervalued stock. These types of chart setups can potentially lead to a significant rally over a short period of time. With an outlook that is head and shoulders above its competition, XPEV trades at a relative discount and presents significant upside. The trade When we consider the macro environment in China and the significantly oversold and undervalued stock of XPEV, my preference is to add long exposure with a simple call option.

Persons: XPEV Locations: China, Europe

☆ Hyped-up stocks like this cybersecurity play could be topping out. How to profit if they do
▼ + stars: | 2024-01-17 | by ( Tony Zhang | ) www.cnbc.com time to read: +3 min

If we look at a chart of the cybersecurity stock, it recently printed within 3% of its all-time highs set back in 2021. Higher high's in price are no longer confirmed by higher highs in momentum, this is a signal of a potential reversal when coupled with a major resistance level. As cybersecurity needs grow globally, CRWD is positioned at the forefront of this industry. The trade Since CRWD has such a strong business, despite the concerning valuation, my view is fade it with a neutral rather than outright bearish view. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR.

Persons: CRWD Organizations: Nasdaq, CRWD

☆ A low-cost way to bet on a breakout for this cheap AI play
▼ + stars: | 2024-01-10 | by ( Tony Zhang | ) www.cnbc.com time to read: +3 min

Here's an options trade betting on a breakout from an under-the-radar play in the chip industry. The chip industry is the initial beneficiary because A.I. revolution, inefficient use of computing power will disproportionately benefit semiconductor and cloud computing companies over software. Despite this pullback, relative strength of AMAT has been strong and suggests that it may test its all-time highs and potentially breakout higher above it in the coming weeks. This pullback provides an opportunity to start establishing a position to play for the all-time highs, and potentially add further exposure if it breaks out above its all-time highs.

Persons: AMAT, I'm Organizations: Applied Materials

☆ How to profit from the market and tech stock pullback using options
▼ + stars: | 2024-01-03 | by ( Tony Zhang | ) www.cnbc.com time to read: +2 min

As we head into the early innings of earnings season, this year has been off to a shaky start. Let's discuss how traders can hedge themselves ahead of that using options. In my opinion, except for Nvidia, there are almost no notable technology companies that have seen significant growth in their revenues last year, or will see significant growth within the next 6-12 months due to AI. I believe now is the time to pull the trigger on a market hedge using the Invesco QQQ Trust as we head into what could be a turbulent earnings season. Using the QQQ ETF, which tracks the Nasdaq-100 index, I'm looking out to March and buying the $400/$370 put vertical at a $6.39 net debit.

Persons: QQQ Organizations: Nvidia, Nasdaq

☆ A comeback bet on a cheap drug stock that's missed the market rally and is at a 52-week low
▼ + stars: | 2023-11-29 | by ( Tony Zhang | ) www.cnbc.com time to read: +2 min

In a market that is trending higher, most stocks are trading at levels where the risk/reward is unfavorable to enter new long positions. During times like these, a contrarian view is required to find bullish opportunities where the risk/reward balance is still favorable. One such stock that is unloved by most analysts and trading at a new 52-week low is Bristol-Myers Squibb (BMY) , but that is why I think it's worth investigating. After declining nearly 40% over the past 12 months, BMY is starting to approach levels that should interest a long-term investor. Additionally, multiple drugs in their pipeline that have been approved this past year are starting to see strong quarter-over-quarter sales growth.

Persons: BMY Organizations: Myers Squibb, FDA Locations: Bristol

☆ This tech stock may have disconnected from fundamentals on AI hype. How to bet against it
▼ + stars: | 2023-11-22 | by ( Tony Zhang | ) www.cnbc.com time to read: +2 min

Once a darling of the tech world, Dell stock is up nearly 120% in just over a year. Dell is a prime example of a stock that has recently disconnected from its fundamentals as a result of the hype from AI. Dell reports earnings in a week and I believe this is an opportunity to fade it going into earnings. With implied volatility quite elevated going into earnings, my preference is to be a seller of options and volatility. I'm looking out to the Dec 29 weekly options and selling the $75/82 call vertical for a $2.47 credit.

Persons: Dell Organizations: Dell, DELL

☆ A bearish options trade that pays off if hotel stocks start to feel a travel slowdown like airlines
▼ + stars: | 2023-11-08 | by ( Tony Zhang | ) www.cnbc.com time to read: +3 min

As airlines continue to add capacity after a year of record demand for revenge travel, consumer demand after the pandemic is showing signs of slowing. Airline stocks have already lost about a third of their value in the last three months, yet hotel shares have held up fairly well. If we look at the implied volatility of MAR options, it isn't particularly high, however the skew between at-the-money options and out-of-the-money options are quite high and provide a unique opportunity to sell a neutral to bearish call spread. I'm looking out to the Dec 22 Weekly expiration to sell the $195/$205 call vertical spread. (Reminder a vertical spread involves buying or selling options with same expiration but different strikes.)

Persons: it's Organizations: NYSE, Marriott Locations: Europe, Asia

☆ How to bet against Apple with options as its chart breaks down ahead of earnings
▼ + stars: | 2023-11-01 | by ( Tony Zhang | ) www.cnbc.com time to read: +2 min

Now that the majority of the so-called Magnificent 7 have reported earnings with mixed reactions, Apple (AAPL) is on deck this Thursday after the close. Trading at over 26 times forward earnings, AAPL's valuation does not reflect the uncertainty with discretionary spending into the end of 2023. Look to Alphabet's earnings where the market reacted poorly to the Google-parent's uncertainty around advertising revenue, a reflection of concerns around consumer spending. The trade To play for a decline towards that level, I'm going to use a trade structure that I prefer for earnings when options are expensive. This gives me an over a 2:1 risk to reward ratio on this trade if AAPL declines on earnings.

Organizations: Google Locations: China, India

Search resuls for: "Tony Zhang"

25 mentions found