Long Options Watchlist – 2021-01-03
Weekly Watchlist: $DHI, $DKS, $FPRX, $FUV, $HBI, $SESN, $ZNGA
Removed: $DBX (added to portfolio), $KALA (support failures)
DHI
After a run-up over much of the year, $DHI paused in mid-October and has been consolidating since.
The daily chart shows the run-up from the end of the big March downturn to its 52-week high. After the initial pullback, it continues to trade in a narrower and narrower range and appears to be getting ready for a breakout, likely continuing its previous upward trend.
The hourly chart shows it testing a strong support set of lines a few times over the last few weeks. The last hourly bar shows it hitting its low for the timeframe of that chart. If the early Monday session shows it holding the support lines around 69.30, it is likely at the bottom of the channel and will head back up.
Whether it is a ride up to the next fib line or a breakout, it looks to be at a good entry point.
DKS
$DKS is similar to $DHI with the long run-up and a consolidation starting around mid-October.
The daily chart for $DKS looks very similar to $DHI, except that the current action for Dick’s still swings a bit more, relatively speaking, which means it may still be working its consolidation. But, with that said, there is opportunity to play the edges of the channel.
The hourly chart shows a little more detail in the current channeling. It held and then bounced off the 78.6 extension, riding that for a few days, and has been riding the 38.2 retracement for support the last week or so.
I tried to pick this up as a year ending bargain, but the price never came down last Thursday to my targeted entry then. However, I may be waiting for it to come back down to the 23.6 retracement (53.78) before picking it up for its climb up the channel, or maybe a breakout higher.
FUV
$FUV went from a penny stock in the first half of 2020 to only that reached $20.20 at hits high in mid-November and is currently trading between $13 and $15 per share. Needless to say, the volatility of this type of action can make (or lose) you some money along the way.
Its daily chart shows the run-up and the retracement over the last couple of months, with it playing about halfway between the start of the run-up and its high. The real question is whether it is consolidating to break higher, or whether it will consolidate and go lower.
In the meantime, it continues to play a channel, with higher highs and higher lows, indicating a possible run higher. The hourly chart shows the last few days where it is currently testing the bottom of this channel with two support lines (50.0 ext/23.6 ret) in close proximity. Support here could indicate at least a short term movement up to the next ‘double line’ between 16.60 and 16.96.
HBI
Like a common theme among many tickers, $HBI had a run-up, getting 52-week highs around mid-October, and then pulling back and consolidating.
The daily shows the run-up and then the sharp decline and gap down just prior to earnings in November. Since then, it has started to climb again, looking to slowly fill that gap.
In recent action, the hourly chart shows the strong support around 13.60 (61.8 ext/23.6 ret) and a move up from that area into the range it’s been trading for the last week, with its short-term high just under the 50.0 ret and the whole number, providing for a strong resistance.
This is another I was looking to get into late last week but the price action did not come down to the 38.2, where I was trying to get filled. I look for this to make another run at the whole number sometime over the next couple of days, and if it breaks through, it does have another resistance point right above that (around 15.45). But, I am liking the overall chart, how it is holding support and then stepping up.
SESN
$SESN is a penny stock, but also one that has options. So, if you choose to play this, you can play either with the stock or with the options.
Since its low in March, as can be seen on the daily chart, it has been moving up, consolidating, moving up again, and repeating. The last move up also came with a sharp decline back to the 100.0 ext. that I had drawn, which held. Since then, it looks to be starting to move up again.
The hourly chart does look a bit busy, but it clearly shows how it rebounded back above the 100.0 ext and held while bumping up to the next channel up the last couple of sessions.
I currently have a limit order in just under the 23.6 ret. line, as I feel that is a good entry for a stock play. Looking to get a small position and going from there. I do believe this will challenge the 52-week high again, but the question is, when? In this case, going the stock play route as I don’t have to worry about time decay, and could potentially have a good percentage outcome.
ZNGA
$ZNGA is the dragon that I’m determined to slay. J As video and mobile games have been in the spotlight and thriving during the pandemic, $ZNGA has benefited but hasn’t been able to fully follow its bigger brethren.
After its initial run-up after the March lows, it reached a high of 10.69 in early August, fell back after earnings, and since then, has been finishing its bullish “W” pattern, as shown in the daily chart, and is at a point where it should be breaking up to its 52-week high.
With that said, the 10.00 whole number has been a major resistance line. As the hourly chart shows, it has recently been testing it but each time, it has been pushed back. However, the chart is also showing strong support between 9.39 and 9.48 (a double set of retracements).
Now, this chart is a bit busy at the moment, but each set of the lines has been showing as resistance and support as it appears to be gaining energy for a move. How it moves through these lines, especially multiple lines in a day, will alert of a larger impending move.
NEW
FPRX
$FPRX is a biotech play. After having news in early November, it has a catalyst within the next couple of months which will move the stock, as well. (I need to do a little more research for the potential timing.)
The daily chart shows the huge gap-up and the range it’s been in since. Over the last two months, since the initial retracement, it has held up within a few dollar range.
The 0.0 retracement line will be a key support to watch. If this line falters, it may try to fill at least some of the gap-up it had in early November. On the top side, I see what I am calling a triple resistance, which can be seen on the hourly chart. The 50.0 ret/78.6 ext/20.00 whole number is a critical level for it to break out above.
For a potential breakout, a good entry would be under 16.80, with a better point closer to the 16. However, be cautious of a potential breakdown, and set your stop-losses accordingly.