Latest news with #NishantPant
CNBC
13-05-2025
- Business
- CNBC
An options strategy to play a potential rebound in this beaten down delivery giant
UPS reported earnings on April 30, and while they managed to beat estimates, the outlook for the upcoming quarter fell short of expectations. They also announced 20,000 job cuts following their recent split with Amazon — news that didn't exactly inspire confidence. Amid all this negativity, several analysts have slashed their price targets. That said, the average target still hovers around $110 — noticeably higher than where the stock is trading now. For this trade, I'm taking a contrarian stance on this beaten-down name, especially as the technical charts start to hint at a possible bounce. It's also worth pointing out that UPS tends to move in tandem with rival FedEx, so any strength in that name could serve as an early signal for upside in UPS. Beyond the headlines, let's break down what the technicals are saying. Here's a look at the 6-month daily chart of UPS. The MACD is a popular tool not just for identifying the current trend but also for spotting potential reversals. On April 21, the MACD began signaling a possible shift in momentum, marking the early signs of a trend change. The Relative Strength Index (RSI) helps gauge the strength behind a stock's price movement. With the MACD already pointing bullish, the RSI offers further confirmation — it's been climbing sharply, reinforcing the case for growing momentum behind this move. The trade setup: UPS bull call spread To initiate a bullish position on UPS, I'm using a strategy called a "bull call spread." This involves buying an at-the-money (ATM) call option while simultaneously selling an out-of-the-money (OTM) call — combining both legs into a single, defined-risk trade. In this setup, UPS only needs to move $1 in the right direction for the position to deliver a 100% return, effectively doubling the capital at risk. Here is an example trade setup assuming UPS is trading at $101/share after market open. Buy $101 call, June 6 expiry Sell $102 call, June 6 expiry Cost: $50 Potential Profit: $50 Notes: Strike selection : Strikes will vary based on UPS's price at the time of entry. The ideal setup involves buying an in-the-money (ITM) call and selling an out-of-the-money (OTM) call, effectively creating an at-the-money bull call spread. Expiration : It's best to give these setups 24–35 days to work, especially when trading around sharp moves or knee-jerk reactions. Profit target : If UPS reaches or exceeds the short strike by expiration, the trade can return 100% on the capital risked. For example, with 50 contracts, you'd be risking $2,500 for a potential $2,500 gain. I dive into setups like these in much more detail in my book Mean Reversion Trading , and you can explore hundreds of real trade examples on my site: . -Nishant Pant Founder: Author: Mean Reversion Trading Youtube, Twitter: @TheMeanTrader DISCLOSURES: Pant has a UPS 101-102 call spread expiring on June 6. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
CNBC
06-05-2025
- Business
- CNBC
Alphabet is leading a Big Tech rebound. This options trade lets traders capitalize on the move
After a historic correction that briefly brought the market to its knees, the S & P 500 has come roaring back — recovering around 16% in less than a month off its April lows. Leading the charge are many of the "Magnificent Seven" stocks, including Alphabet (GOOG) , which is showing strong momentum in this rally. To identify a potential bullish trade setup on GOOG, I'm analyzing a couple of key technical indicators for confirmation: MACD (12,26,9): The MACD is a versatile indicator that can help spot both trend reversals and the strength of the current trend. Right now, the MACD line is above the signal line, confirming that an uptrend is currently in play on GOOG. Exponential moving average crossover: EMAs are a favorite among trend followers for spotting longer-term trend shifts. In the chart below, I'm using the 8, 21, and 34 EMAs to track momentum. You'll notice the 8 EMA (blue) has recently crossed above the 21 EMA (yellow) and is now approaching the 34 EMA (pink). Looking back over the past nine months, each time we've seen this kind of crossover sequence, it's signaled a shift in trend. That same pattern is unfolding now — reinforcing the idea that a new bullish trend is emerging and the sharp correction we just went through may be in the rearview mirror. The trade setup: GOOG $165-$170 bull call spread To capitalize on a potential move higher in GOOG, I'm deploying a bull call spread options strategy. With the stock trading near $166, the setup involves buying the $165 call and simultaneously selling the $170 call — creating a defined-risk trade. If GOOG finishes at or above $170 by the June 6 expiration, the position will return 100% on the capital risked. This strategy allows me to participate in the upside potential while keeping both risk and reward tightly controlled. Here is my exact trade setup: Buy $165 call, June 6 expiry Sell $170 call, June 6 expiry Cost: $250 Potential Profit: $250 I dive into setups like these in much more detail in my book Mean Reversion Trading , and you can explore hundreds of real trade examples on my site: . -Nishant Pant Founder: Author: Mean Reversion Trading YouTube, Twitter: @TheMeanTrader DISCLOSURES: Nishant Pant has a GOOG 165-170 call spread expiring on June 6. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
CNBC
29-04-2025
- Business
- CNBC
This defense stock got rocked after earnings. How to bet on a rebound with options
Northrop Grumman Corp (NOC) plunged after missing earnings expectations last week. While this was definitely material news, a look at the three-year weekly chart shows the stock finding solid footing around the $450 multi-year support level — and it's already starting to show signs of a rebound. Even though several analysts have trimmed their ratings, the median price target still sits at $545 — a lot higher than where NOC is trading right now. Also worth noting: Northrop is part of the industrials sector, and a quick glance at XLI — the Industrials Select Sector SPDR ETF — shows that the group is looking strong and actively participating in the broader market recovery rally. Technical Indicators To zero in on a trade setup, I'm layering in a couple more technical indicators to confirm the signal and improve the odds of success. RSI (Relative Strength Index): Notice that the RSI pivoted on 4/22 and is now moving sharply higher, signaling a potential shift in trend. DMI (Directional Movement Index): The DMI (Directional Movement Index) is made up of three lines: the DI+ (green line), the DI- (red line), and the ADX (blue line). When the DI- (red) is above the DI+ (green), it signals a downtrend. But when these lines start to change direction, it often points to a potential shift in the current trend. In this case, the DI- (red) pivoted on 4/22, and the DI+ (green) followed with a clear reversal on 4/25, giving even more confirmation for this trade setup. To take a bullish trade on NOC, I'm setting up a strategy known as a "bull call spread." This involves buying the $480 call and simultaneously selling the $485 call, combining them into a single trade structure The trade Here is my exact trade setup: Buy $480 call, May 30th expiry Sell $485 call, May 30th expiry Cost: $250 Potential Profit: $250 If NOC trades at or above $485 by the expiration date, this trade could yield a return of 100% on the amount risked. With 10 contracts, this equates to risking $2500 to potentially gain $2500. I dive deep into setups like this in my book Mean Reversion Trading , along with hundreds of real trade examples available on my website: . -Nishant Pant Founder: Author: Mean Reversion Trading Youtube, Twitter: @TheMeanTrader DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
