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Should you buy today's dip - or is it all over?
The market is sliding today after the Fed’s hint that a rate hike may be sooner than expected. Most sectors are falling today - financials are the main exception.
Where should you look to buy the dip?
In my opinion, the overall market will rebound quickly. A potential rate hike above the 0 to 0.25% range sometime in the next two years really isn’t much of a serious threat to the markets.
However, I’d also dig deeper to find stocks that are falling but have bullish option activity.
Yesterday, I found that DraftKings fit that criteria and alerted to it in my premium newsletter. It spiked 3.5% this morning and is still one of the few stocks that’s green today.
So what’s the play this afternoon?
First, I use the Options Matrix to find potential plays.
Among momentum stocks, which are usually the best places to look for these option flow plays, I am seeing bullish activity in these names:
Peloton PTON - Large volume in $120 calls expiring 7/30
Snap - Large call buying in $60 to $70 calls expiring over the next few months
Roku - Call volume is very high in $342.50 to $380 calls expiring this week