Disclaimer: My funds are already in other plays so will most likely not participate in any of these plays, just throwing out ideas for anyone interested.
Selling put and call options inside of a wheel strategy is one of the best ways for beginners to practice how to identify support and resistance levels of a stock or index. Using these levels can help you identify entry and exit levels, but can also help you with selling put options, which is what this will be about. I’ve compiled a number of possible earnings plays for this week that could help you get started on running wheel strategies on these stocks. I’ve included two for each earnings day, from Monday-Wednesday, plus bonus potential play for those that want to capitalize on earnings from last week. Few things to remember with these plays: Support and resistance levels are just that, LEVELS. The price will not use this exact price point as support/resistance, but will most likely use the area around the price point as support/resistance. Selling put options and running wheel strategies means that you must be open to owning this stock. In order to sell the put, you must have the appropriate funds for buying and owning the stock if assigned. For example, if selling a $40 put, you must have at least $4,000 in your account in the event of being assigned and the $4,000 will be “frozen” until you, a. close the contract, b. the contract expires worthless, c. you get assigned. Closing the contract would mean you BUY TO CLOSE the put option you sold. Typically look for 50% profit on the contract, but exit when you are comfortable. These are more than one week plays so if you do not have the patience or funds to make these plays, then don’t.
Earnings Monday
LOGI: Support Levels to look for 88.00, 87.75, 86.50
Resistance levels to look for: 90.75, 91.25, 92.50
Minimum Support/Maximum Resistance levels: 85/95
Possible play: Sell to Open (STO) LOGI 11/19 $80 P for ~$100 depending on broker/time the order is filled/price of underlying.
Justification for play: On the yearly chart, price has gotten below $80 for only two days. For the rest of the year, the price action uses $80 either as a consolidation level or as a support (Nov 2020 to Mar 2021 had bull run from $80 to $120, the pullback from that run used $90 as a support level, which is where we currently are).
FB: Support Levels to look for 323.25, 318.00, 315.00
Resistance Levels to look for 331.25, 334.00, 337.75
Possible plays: STO FB 11/19 $300 P for ~$450. RISKIER PLAY STO FB 11/19 $310 P for ~$750
Justification for plays: $300 has been resistance this year but turned into support around May and hasn’t seen the level since/option chain gives the put around 0.2 delta which gives the play a low chance of being assigned. The riskier play has a delta of 0.3 which still is a low chance of being assigned, but in the event of being assigned, could run wheel strategy/ wait for bullish price action with breakeven of $302.50 (close to $300 support level).
Earnings Tuesday:
AMD: Support Levels to look for 118.00, 117.25, 115.00
Resistance Levels 120.50, 121.25, 122.25 (Approaching all-time high, expect pullbacks)
Possible Play: STO AMD 11/19 $110 P for ~2.05
Justification for play: Recently had double bottom on daily chart with neckline support at 108, breakeven of 107.95 would put your “entry” at support if assigned.
V: Support Levels to look for 229.75, 228.90, 227.00. 215-220 is MAX support.
Resistance Levels 231.75, 233.50, 235.00
Possible Play: STO V 11/19 $220 P for ~$2.15
Justification for play: 220 has acted as support in the daily chart several times this year and breakeven would be close to strong support level if assigned.
Earnings Wednesday:
AR: Support Levels to look for 18.00, 18.95, 19.50 16.00 is MAX Support
Resistance Levels 21.71, 22.50, 23.15
Possible Play: STO AR 11/19 18.00 P ~$0.60 (Personally would sell more than one)
Justification: Performs well on earnings, solid energy sector stock which is currently on strong bull run, breakeven gets you close to strong support of 16.00 if assigned.
MD: Support Levels to look for 236.75, 235.00, 234.50
Resistance Levels 241.75, 243.00, 244.50
Possible Play: STO MCD 11/19 235 P for ~3.25.
Justification for play: Price action currently channeling between 230-250, breakeven would put you close to 230 channel support (231.75). Plus, one word: McRib.
Bonus Possible Earning Play:
STO SNAP 11/19 50 P for ~$1.50
Justification for play: YTD price action has used 48-49 range as solid support and breakeven would be inside of support.