Pre-market Live and Option Picks for 12 28 2020

Good morning. Happy Monday, traders. This is Jake from This is our pre-market analysis. I’m going live this morning. I usually go live at 9 a.m. Eastern Standard Time, but I couldn’t sleep, up early, and then I want to give myself a little bit more time this morning looking over the charts, looking over the news, so this is our pre-market analysis. We’re going to be looking at SNAP, FUBO, MGNI, BFT, and BABA, so let’s go to our charts.

Let’s start with SNAP, FUBO. What do I see with SNAP this morning? Some unusual options activity in the options chain that I was looking around and discovered, so I’m going to blow this [01:21] actually up so you can see it a little better, and then I’m also going to be going over some news. You can see here [01:31] on the daily time frame, we’re looking at, we’re starting to curl down. The MACD, we had the positive divergence across the negative divergence so we might see a continuation of this with the selling. I’m really hoping we can come back and kiss this 50-day moving average on the daily. I can even go to the weekly and show you.

You can see the trend is pretty maxed out. Our RSI was just at this 77, 78, and I think we’re going to get some selling. We’re a little extended here. We’re a little stretched. We get stretched, kiss it, stretched, kiss it, stretched. I don’t think there’s any more gas left in the tank for SNAP. Let’s go back to the daily, and I haven’t drawn any lines on this [03:00] in a while. Let me zero this [03:04] out for you guys so you can see a little bit of what I’m looking at. Also, one thing to take note of, guys, it’s the end of the year. Just slow down. There isn’t really a lot of volume in the markets.

We could get a surprise rally because I also was checking the news and the House is voting today on increasing the 600-dollar check to 2,000. That could be in the cards. We are in a confirmed down-trend, and we need this low of basically 49.88, 50 to break. Let’s go to the ten-day. I’m seeing lower prices for SNAP. Let’s go out, actually, to the one month. I want to see a little bit further out to some historic pivots. This area [04:48] could be in play.

This [04:55] was a previous resistance, will now become support at the 46.27. We had a lot of selling yesterday, so we could get a bounce to this 50 area, and then I see a little bit more downside for SNAP. I’ll show you why. Let’s go to the options chain on SNAP. You can see on December 31st, these are the strike prices, the calls in the money, and I want to see the volume and open interest. These, I think, are short calls. I don’t see SNAP getting to that 53 this week, but then again, who knows?

We’ve got Trump with the stimulus increasing everybody’s $600 check to a $2,000 check. It’s better than nothing, guys, but I think it’s a little too late. Too little, too late, that’s the expression. What I’m really interested in, what I saw is this 50. These puts that are at the money, there’s no volume because markets are not open, but look at that open interest, 26,600. Also, here [07:20] at the 48 puts 20. That’s not really that far out of the money for SNAP to move $3.

The options chain also gives you an idea of where resistance and where support is. You see there’s a lot of open interest at that 53 strike. It’s like 42, 520, 288, 1,000, 2,000, 2,300, 3,000, and then boom, 10 grand, open interest. Let’s go to the charts. The options chain can give you clues as to where support and where resistance is as well as when you get a lot of volume in a particular strike, it gives you an idea of where the interest is in that particular stock. We had this push. Two times right here [08:56] we had these pivots, 53.77 and 53.29.

Again here [09:14]. you can see three times it got rejected at this 53. It was up here [09:31]. Just couldn’t sustain these prices, got pushed down, tried it here [09:41], couldn’t do it, came to support, tried again, couldn’t do it, came to support, broke through support. Now our support is going to act as resistance. We’re in this little bit of a down channel. Let’s go back to the options chains on the puts. These are this week’s expirations. Big open interest at the 50 and at the 48.

There’s two things you have to think about. One is that these are areas, big areas of support, so these could be short sellers. These could be short puts that professionals and people with huge accounts and institutions, they’re the seller of options contracts. They don’t really buy. Retailers buy options. Institutions sell options because they require so much more risk, and you really need to know what you’re doing, and you also need a huge account to make it financially lucrative.

I’m seeing a lot of interest in this 48 put strike and this 50 put strike. I spend a lot of my time after the markets when I’m not in the group on Slack. I’m looking through hundreds of charts and the options chains, the technical analysis from the charts, and I put two and two together, and I form a hypothesis or a thesis for myself and my own trading.

I’m really interested in SNAP this week. We’ve got a short week. Markets will be closed Friday; it will be New Year’s. By the way, Merry Christmas. Hope you had a great, Merry Christmas, got some presents, spent some time with loved ones and Happy New Year. See you in the new year, as they like to say.

Yeah, so I’m looking at the 50 and the 48 puts expiring this week. I think I’m going to get both strikes today, the 48 and the 50, and probably will cut the 50s first and then see about the 48s, see if we can get some more selling and some more downside. However, with the stimulus and the House, the markets are very news-driven, so with anything in life, must proceed with caution because markets can change. Just because we’re selling off or just because we’re rallying doesn’t mean that some important news could come out on financial markets like the stimulus, more corporate bonds buying corporate debt.

We could even see things like the Federal Reserve comes out and says hey, we’re going to keep interest rates at zero. That keeps the market feel-good rally going. It’s stimulating the markets. It’s stimulating the economy. They’ve got really genius people pulling the strings behind the scenes. I like to call them central banksters manipulating the dollar, the UUP. I talk about that in my daily recap on the indexes. This is one play I’m really looking at, interested in.

These could be short puts because somebody thinks that SNAP is going to actually close above 50 and above 48, meaning they’ll collect 100% of their premiums on these two strikes. They’re also a little bit out of the money. You can’t have a short seller in the money strikes. You see a lot of the unusual options activity outside of the money. If it’s calls, it’s out of the money. If it’s puts, it’s out of the money puts. That’s where you see a lot of this big volume or big open interest, but you run into the issue of hey, are these people buying puts or selling puts because they don’t think the price is going to close below 50 or below 48 by this Friday? The same thing goes for the call side. Are these short seller of calls because they don’t think the price will close above 53 by Friday?

That’s the only issue I think people run into with trying to determine direction or market sentiment with the options chain. It’s not the whole picture. You can never know if these are people buying puts or selling puts or buying calls or selling calls. If they’re in the money strikes, you know that they’re not short sellers. These are people buying calls. Since the calls are in the money, they can’t be short calls. That’s a little mini-lesson for the day.

I see here [15:52] there’s 2.6k open interest at the 50. Just comparing right now some of the amount of open interest. Volume is really the king, but the markets are not open right now. I like volume as a much better indicator than technically the open interest. If there’s high open interest, all that means is that you’re going to have an easy time getting in and out of your options contract because the bid and the ask is going to be pretty tight so the spread’s going to be tight so market fill buy, market fill sell.

I’m seeing a lot more open interest in the in the money puts, 1.2k, 1.2k, 8, 7, 3. Yeah, definitely a little bit more interest in the put side, but this open interest on the put side is pretty big. We’re going to see how this works with SNAP. Go back to the charts one more time so I can show you guys. Sometimes my pre-markets are quick. Sometimes I’ve got a little bit more time because I’m not in a rush. I usually do these at 9 a.m., and the market opens at 9:30, so I’ve got to get situated and ready.

I’m looking at some buying out of the gate. We’re either going to touch this 50 simple moving average or come to what was previous support, which is now resistance, and also we have this down trend. If this down trend continues, we’re going to see some buying up into this [18:13] line or this moving average, and this [18:18] is going to be the area where I’m going to be looking at getting the 50 puts expiring this week, and I might get the 48s. There’s 48 right there [18:41], so that is interesting.

The deeper out of the money you go with weekly options, the higher the return is but you also face if the stock goes the other way. Say you have two dollar out of the money puts and the stock goes a dollar the other direction. Now you’re $3 away from being in the money, and your options contracts are expiring this Thursday, so what happened to us with NET, we bought $1 out of the money. The stock moved $2 up, and the options were worthless pretty much fast, 80, 90% worthless. We did get the pull back like I was expecting, but we were just a little too early.

When it comes to weekly expiration options or even the day of expiration options, you have to buy at the money or even in the money to be able to manage some wiggle room and your options not go straight to zero. I like the 48 puts and the 50 puts. If we get both, I might let the 50 puts get in the money and sell and then wait for the 48 if we get there. This could be ultimately in the cards, this 46.36 area. That’s where I think we might move sideways for a while and then continue the uptrend.

I go to the year-to-date. Like I said, guys, we’re so stretched from this 50 simple moving average on the daily time frame year-to-date. As this price action makes its way down, down, down, if we’re still in this down channel, go up, down, up, down, up, down. It’s going to curl this up, so by Friday or by next Friday if the price does come down to this area [21:16] where I was thinking, this moving average will curl up and kiss it. This [21:23] is the area I’m looking at, essentially, but let’s not kid ourselves, guys. We’ve got some huge gap windows back here.

Look at this gap window [21:34]. This could get filled, to be honest. If we do experience another march crash, this gap window down here [21:54] will get filled. Don’t kid yourself. You think it’s going to end. I don’t want this to happen. Sometimes the opposite of what you think happens happens, but so many stocks are stretched. I don’t think this is going to end very well. It does look a little bit like a 1999 tech bubble all over again if you ask me.

If you look at DASH, look at Airbnb, or what is it, ANBN? ABNB, yeah, Airbnb. I’ll basically call it 175, 80-something-billion-dollar market evaluation, bigger than Goldman Sachs, DASH. We’re also living in a new day and age where I just think that it’s not like the good old days where things made sense. We might be time to go long on DASH. I’m going to keep an eye on this one today. I like DASH. I made some really good money on puts right here [23:43], lot puts right here [23:45]. I wish I would’ve bought calls here [23:48]. It’s obvious. We’ve got puts here [23:51]. I sold for about 40%. Some people sold for 3, 400%. My positions are a little bigger. I’m very risk-adverse. Forty, fifty percent and you got a hundred, two hundred contracts, sell. Sell 50%. Sell two-thirds. Sell as much as you need.

I think FUBO could become another cold stock like Tesla. We’re coming really close to this trend line that I drew [24:30]. I’m going to bring this down a little bit more, actually. It needs to touch that [24:35]. We’ve got this gap window here [24:38]. Man, I was pissed at myself. I was drawing channels here [24:43]. I was thinking about getting some month-out expiration contracts at the 50. Hindsight’s 20/21. You’re just like man, I was right there. I wish I would’ve just got them.

Like I said, I still think FUBO, we got to come down and touch this [25:17]. Who’s to say we won’t be able to go higher? This is probably a hundred-dollar stock if I drew this channel right here [25:32] straight vertical. Is this the pull back for the next leg up, or are we going to come and touch this 50-day moving average? Like I said, I look at the options chain. A lot of factors you have to take into consideration. Look at the business. How good is the business? What is it doing? What’s its revenue?

We’re coming into some triple support here. We are stretched on the 15-minute time frame. I like FUBO today for some calls, maybe get the 45 strikes. We’ll have to be keeping an eye on FUBO, but you never know, could want lower prices. I should actually go into the options chain really quick and take a look at the December 45. Usually, it tells me at least what the open interest is. What is extended hours, 42? We’ve got lot of open interest and interest in this 45 puts. Then January ’21, a lot of interest in the out of the money as well.

It’s not the best time, I think, to be trying to go too long anything that’s a high flyer. This is a high-flying stock, not BABA but FUBO. You have to get into the habit, guys, mentally of if you are going to go long, go long on a stock that nobody wants, that nobody’s paying attention to. We filled that perfectly. Amazing, and then got that second little burst.

We got into calls Friday on BABA. I sold with about 20% profits, but I sold here [28:57], so we did get that pull back, and at first, I was like, I’m glad I sold, but then we came all the way up to this 224 area. So you’re looking at 50, 60% return on that trade, but such is life. You’re not going to catch the bottom or the top. This was a falling knife right here [29:22], but BABA, I think, is a good company maybe. Can it reclaim a lot of this lost ground in these gap windows? Maybe go out a month. I’m going to have to look at the options chain on this later and figure out where to go out in terms of giving yourself enough time to be right, but also, don’t give yourself too much time to be right because less time on the expiration of the options, the bigger the return you get.

You see these snapshots. People will get 100, 200, 300, 1,000, 2,000% return on trades. I remember trading Netflix this year. I can’t remember what the event was or what happened, but I remember I had a 500-dollar position, and I held it all day, day of expiration. It was Friday. It was the day the options expired, and I held it all day. Netflix was a real jackpot trade. The stock was in an uptrend all day long, seven hours, natural pull backs to reload, make the next leg up. I think I sold with about 12,000-dollar profit with a 500-dollar position. Those don’t come every day, but yeah, that’s the power with weekly options.

That’s why some of you guys in the group who don’t like weekly options, you think they move too fast. I’m sorry that you feel that way, and I try to provide some swing trades for my members who are not quite as active in the markets. They have a job, or they do it on the side as a hobby, and they’re looking for longer-term swing plays. I’ve been putting together some lists and providing that for my members. I did that over the weekend. I put a list together, and I posted it on the options alert page.

These are all swing trades for my members who, like I said, don’t have a lot of time to swatch, do the day trading, but this is here for you guys to take. You’ll have to monitor yourself. I did do a lot of research, homework to find these. I think these are all great plays. Just it’s not really my style, not really my cup of tea. You can get a thousand percent returns on some of these for sure. I like the weekly options. I’m a day trader. I trade because I need money today, not tomorrow, not a week from now, not a month from now. I’m looking for money in my pocket every day because I got bills to pay. I have a lifestyle. I have savings. I’m not really good at waiting. I’m also impatient, but that’s why I like day trading. I’ve had some good results day trading, too.

We looked at BABA, so BFT and MGNI, and that’ll do it for this morning’s pre-market. I’m not sure if this has options, actually, but I did like the charts. It’s hard to see, but I see a cup with a handle, and we’re right there. It wants to break it. It is going higher, in my opinion. Higher prices are in the cards. I just got turned onto this stock recently, so let’s see what it does today and this week, but we got a clear up-channel, which I like. I like seeing that. Little high on the RSI and stuff, but it is apparently a new stock, so there’s some hype around it, which can be good and bad.

This is what I see right here [34:38]. Then I’m going to go ahead and draw one more trend line here at this pivot [34:51], this high pivot, zero it out. We gapped up. We are up 5%. BFT it is, guys. I like this one. Big volume handle but not a lot of volume, but it’s getting there, almost 100,000, but this could be a head fake. Are we above this resistance just to come back down?

I want to look at the ten-day and then go to the five- or ten-minute time frame. It’s a lot of time and energy that goes into this, guys, that I put into this for myself and for my members. I hope some people recognize it. I know some of you guys do. I see some room to this 16.50 but also, I like this [36:46] too. I can make this a case. I like BFT. I want to make sure, though, it has options. No, it doesn’t. Unfortunately, I was wrong.

Last but not least, MGNI. MGNI has options I know for a fact because I’ve traded MGNI before. We’re up 33. Nice gap up, MGNI. I also need to take a look at the futures, and I will be looking again at any news and any other stocks that might be gapping up that look good for potential runners. It’s so funny. When you draw these lines, you’re like there’s so many stocks to keep an eye on; you almost have to set alerts.

Then this is a high pivot right here [38:17]. That’s a high pivot right there [38:21]. Going to keep an eye on you, Mr. Pivot. Extended hours, 33.50. We’re right above that. Actually, I’ll put it right here [38:45]. You could bring it down if you wanted to to touch that [38:51]. That looks a little better. MGNI, this 37.50 is in the cards, to be honest. You can see that it did this monster move, insane. When was this? Twenty-two, just right off this support channel, just vroom, payday, now chomping around sideways, killing puts, killing calls, and we’re back at this channel. Again, gap up. This could be a big runner today, guys.

MGNI, I think, is for me, on watch, and SNAP. I’ll check this pre-market gap up goes to see if anything is catching my eye. Not a lot of pre-market, and I don’t like trading the cruise lines or the airlines. It can be really hard to catch those. MRNA’s getting a lot of pre-market volume. It’s down. I’ll have to go look at it. MRNA’s always been really good for us. We’ve traded it many times, had good profits.

It’s the end of the year, guys, so I’m just not seeing too many opportunities. It’s not earning season. If you haven’t had an earning season yet, if you haven’t gone through an earning season trading, it’s the best. It’s where I think I make most of my money on the year. Then the rest of the year is more scalping. Microsoft catches my eye. I don’t always see it on the most active option, most active volume-wise, pre-market wise. MRNA, Square, AMD, I like. Microsoft, I like. We’ll be keeping an eye on some of these, rotating them.

That’s all I’ve got today, guys. Thanks for tuning in. Thanks for being a member to the group. I really do appreciate it. I wanted to get the premarket live out of the way and done. Thanks so much for being a member. I really do appreciate it, guys, and I’ll see you later today on the charts.

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