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I feel like part of the crowd doesn't trust this rally, which means it probably isn't done. It won't make me a chaser, but I don't feel like the market is going to completely fall apart this week. It does give me the courage to take some overnight shots into a few names or some earnings plays.
I like the risk-reward on Urban Outfitters' (URBN) chart. Has the same-stores sales trough finally passed? A few other retailers have posted surprisingly strong numbers and if URBN were to surprise to the upside, this chart is poised to push the stock into the low $40s quickly. I'm going to approach this in a slightly different fashion, though from a trading standpoint just in case URBN disappoints. I am buying the December $36 calls while shorting the January $37-$42 call spreads with a target of $1 or less. I'll try for these at $0.95, but given I've traded URBN options many times in the past, the bid-ask spread is a tougher one to crack, so while I believe $1 can likely be filled, $0.95 will require some more patience.
Another one I am watching (a hat tip to @lancelotw on Twitter for tossing this chart to me last week for discussion and digestion) is O'Reilly Automotive (ORLY), which is kind of breaking out today. At first, I thought any move over $90 would send this off to the races, but upon closer inspection, a move over $90 only sets the stock up for a move to $92, where the key to $100 is held. The $92 price looks like the bigger resistance in this channel/flag. Above $92 and I want to be long ORLY with a stop just below the 200-day moving average. A shorter-term trend, the 13-day simple moving average, may be a better place to position the stop as this will act as more of a trailing stop rather than a positional stop. The stochastics are already breaking out higher with RSI pushing resistance as well. If these two break out higher, then the setup is in place to get long this stop aggressively for a trade on a move over $92 with a stop in place.