STX
THE WEEK AHEAD: AMD, TWTR, STX EARNINGSSTX announces earnings tomorrow before market open, so any play would be on high post-announcement volatility afterglow. The November 17th 32/38 short strangle is paying 1.47 at the mid with break evens at 30.53 and 39.47 with its defined risk counterpart, the 29/32/38/41 iron condor paying .99 with break evens at 31 and 39.
AMD announces on 10/24 (Tuesday) after market close. Although its IV isn't quite there yet for an ideal volatility contraction play, the November 3rd 14 short straddle's paying 1.53 at the mid.
TWTR is up to bat on Thursday (10/26) after market close. Its background IV is above 50%, but it's been higher over the previous 52 weeks. The November 3rd 18 short straddle's paying 1.78, although I could also see playing it directionally via short put from the low end of its long-term range (around 14) should earnings be particularly lackluster. Currently, a short put with a break even around that low isn't yet paying decently, so you'll have to wait for the underlying to go lower to make that play.
Broader market, the "majors" (SPY, IWM, QQQ) continue to grind higher and implied volatility remains disappointing low for premium sellers, with the VIX finishing Friday's session below 10 and the first futures contract trading above the 16 level way out at the tail end of the term structure in June.
Seagate (STX). UpTrend was broken. Wait end of consolidationGood to sell when the price would end the consolidation (yellow ellipse) and drop below the previous low (41.20).
Move stop then lower above the top of projected consolidation.
Target is above the previous low (18.75).
STX - Swing long at $41-42 Level- STX has pulled back after a breakout earnings report and completion of Measured Move target at $49.70. The Measured Move completion corresponded to the test and failure of the weekly 200sma.
- During the upward move, prices trended strongly and respected the 34EMA Wave during pullbacks/consolidation.
- I am waiting for prices to fill the earnings gap and complete the 2 leg down pattern after the measured move. A fill in the $41 - $42 area would be great.
- Negatives for this trades include the sub-200sma price action and possible unknown retracement level after the Measured Move completion.
STX- Strath took $32 January Puts STX seems breaking down sharply in the context of global economical slowdown & related industry weakness & sells contraction.
In the technical side STX breaking down from a rising wedge formation, and rising wedge target will be around 30
For trade Strath took $32 January puts, traded for $1.85
You can check our detailed analysis on STX in the trading room/ Executive summary link here-
www.screencast.com
Time Span: 14:50"
Trade Status: Pending
NOTABLE HIGH IV STOCKS WITH IV > 50%1. P, 79%
2. FCX, 76%
3. X, 75%
4. TWTR, 67%
5. STX, 57%
6. ABX, 56%
7. NFLX, 56%
8 GG, 53%
9. SLW, 52%
Naturally, we are coming into earnings season here, so there's a reason that some of these have high IV here (e.g., NFLX announces in a week and a half). Ordinarily, I like IV to be >50% and IVR (current IV's level relative to where it's been for the past 52 weeks to be high, too), but I may not find a great deal of 70%+ IVR plays here with broad market volatility so low (VIX finished the week below 15).
Neverthless, it may be worthwhile to churn through this small list for premium selling plays (iron condors, short strangles, short straddes), assuming there's sufficient time before earnings to sneak a play in. Otherwise, it's probably best just to wait to do the standard volatility contraction play surrounding earnings ... .
Seagate Tech falling knifeFalling knife. Tanked from almost $70 now down to $19.
Joining the bottoms from 2009 and 2011's low we could be sat on potential support at current level (note 18.50 the 2011 high)
A whole bunch of gaps to fill above 19.75, 21.35, 26.50, 33.77, 47.57
Keeping an eye out for a bounce to try to catch the knife !!!
