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Weekly Report 2022-04-17

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WEEKLY MARKET OVERVIEW 

Following the previous week's downturn, the S&P500 (SPY) began this four-day trading week with a sharp gap down at the opening on Monday.

However, another massive potential wave of selling pressure failed to materialize once again, and the remaining days showed a rectangular consolidation pattern.

The next crucial support level to watch is currently around $436-437, which corresponds to last week's lows. A break below this level might lead to more weakness and a test of far lower levels near the February-March lows.

 

Weekly market performance (Week 15/2022)

 S&P500 (SPY) -2.19%
 Nasdaq100 (QQQ) -3.07%
 Dow Jones Industrial (DIA) -0.89%
 Small Caps (IWM) +0.55%

After a quick spike at the beginning of the week, the Market Volatility Index (VIX) remains just above the 20 level.

 

WEEKLY PERSONAL PORTFOLIOS OVERVIEW 

The Wheel Strategy is unquestionably my bread and butter strategy. It's the one I trade extensively in the Options Trading Club (OTC) and teach in depth to all of my students in The Wheel Academy, my private trading coaching program designed to assist members take their skills to the next level and achieve consistent returns in the stock market.

At the end of 2021, I started to play the full Wheel Strategy on GPN (Global Payments Inc.) after following the extended pullback over the previous several months. Overall, the stock still looks undervalued, and the expected continuous earnings growth in the next couple of years will hopefully allow the price to rebound and resume the uptrend.

On Thursday, with the GPN 04/14 CC $140 slightly ITM, I decided to roll it out and up to the $150 strike (corresponding to the early 2022 highs) expiring at the May monthly cycle while collecting a $1.19 additional net credit. 

With my cost adjusted basis now at $130.57, I am keen to ride the next leg higher, especially if it will be propelled by the upcoming earnings results, which will be announced in early May. Meanwhile, the credit I'm receiving from the sale of the covered short calls is acting as a sort of super-powered dividend yield, returning so far roughly a 9–10% AROI from the beginning of the campaign.

 

As usual, if you have any questions, just send me an email at [email protected]

Take care and trade wisely!

- Gianmarco 

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