Yesterday Tiffany & Co. (TIF) surged over 1.5%. I viewed the move as a strong rally in a quiet holiday market. It also looked like a possible turn for a resumption of the uptrend or a test of the recent December highs near $85.
As a quant I like to come up with ideas about what the market is doing and then test those ideas on historical data to see if the ideas hold merit. In this case I asked what happens after TIF rallies more than 1% in a day while still being down at least 4% on a trailing 10-day basis. I could also have added a trend filter to say that the longer-term trend is higher, or I could have considered seasonality (perhaps as a luxury retailer, TIF performs better around December). These are the kinds of questions you might investigate. Here's a chart of TIF over the last six months.
And this table shows how TIF has fared under this setup.
TIF has tended to rally 1, 10, and 20 days forward following this setup. I suggest selling the TIF January 20 70 puts.