Latest news with #NishantPant
CNBC
11 hours ago
- Automotive
- CNBC
Using options to buy the recent dip in this used car retail stock
Despite beating earnings estimates and maintaining solid profit margins, Carvana (CVNA) has been under pressure recently, losing more than 9% in the last eight sessions — all on tariff scare headlines. While tariffs are a legitimate concern for many companies, this kind of sharp drop is a textbook example of a knee-jerk reaction — and the market is full of them. As a mean reversion trader, the goal is to identify these overreactions and take the other side when the setup aligns. In this case, I'm using a couple of key technical indicators to spot whether CVNA is setting up for a bounce: RSI (relative strength index): RSI is a flexible indicator that helps identify both trend reversals and continuations. In this case, the signal is pretty clear — RSI reversed course on 6/26 and has been climbing since, suggesting that the recent bearish momentum may be fading. Support/resistance: Support and resistance levels are often simple to spot — and in the chart below, you'll see clear support around the $280 level. What's interesting is that CVNA is starting to bounce right off that zone, reinforcing its significance. MACD (5,13,5): I like to bring the MACD indicator into my analysis from time to time because it's a solid tool for spotting early entry signals. While the standard MACD can lag a bit, I often use a short-term version to catch momentum shifts sooner. A bullish crossover — where the MACD line crosses above the signal line — typically acts as an early signal to consider getting into a trade. In this case, MACD hasn't confirmed the setup just yet, but it's definitely worth keeping an eye on for potential confirmation. The trade setup: CVNA 305-310 bull call spread To take advantage of this mean reversion setup, I'm using a bull call spread — a strategy that allows me to risk as little as $250 per trade and scale up easily by adding more contracts. For instance, using 10 contracts means risking $2,500 for a shot at $2,500 in profit, as long as CVNA closes at or above $310 by expiration — just $3 above its current price. With the stock trading near $307, the trade is built by buying the $305 call and selling the $310 call. It's a simple, defined-risk structure that gives me upside exposure without tying up too much capital. I break down setups like this in detail in my book Mean Reversion Trading , and you can explore tons of real-world examples at . Here is my exact trade setup: Buy $305 call, July 18 expiry Sell $310 call, July 18 expiry Cost: $250 Potential Profit: $250 -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.
CNBC
03-06-2025
- Business
- CNBC
When risk-on sentiment returns, here's an options trade on a stock that may lead the charge
After a strong rebound from the tariff-induced correction, the markets have now been moving sideways for the past three weeks. This kind of consolidation is typical — it's how markets build up energy for the next leg, whether that's higher or lower. When risk-on sentiment returns and money starts flowing into growth stocks, the Magnificent 7 typically lead the charge. As that momentum builds, we can expect several trading opportunities to emerge. One stock that appears to be setting the stage is Meta (META) , which has been range-bound since May 14th and looks poised for a breakout. To confirm this potential setup, I'm relying on several technical indicators that can help validate the breakout and improve the probability of a successful trade. MACD (5,13,5): Since the traditional MACD is slower to react, I often use a short-term MACD to capture earlier entry signals. A bullish crossover, where the MACD line moves above the signal line, can be a helpful early indicator for starting a position. That said, the quicker sensitivity of this version also means it can produce more false positives, so tight trade management is essential. A common approach is to close the trade if the MACD line dips back below the signal line, suggesting momentum is fading. In the case of META, we just saw this faster MACD trigger a bullish crossover on May 30, 2025, offering a potential early entry point. DMI (Directional Movement Index): The DMI (Directional Movement Index) is made up of three components: DI+ (green), DI- (red), and the ADX (blue), which measures overall trend strength. When DI- is above DI+, it generally indicates a downtrend. However, when these lines start to reverse direction, it often signals a potential shift in trend. For META, the DI+ line is spiking sharply upward, suggesting a strengthening bullish trend and offering early confirmation of a possible breakout. Support/Resistance Even without relying on technical indicators, a simple look at price action reveals that META is testing a key resistance zone. A decisive breakout above this level would serve as strong confirmation that the stock is ready to push into the $700s in the near future. The Trade Setup: META 670-675 Bull Call Spread To take advantage of a potential breakout in META, I'm deploying a bull call spread. With the stock trading near $670.90, the position is built by purchasing the $670 call and simultaneously selling the $675 call, creating a defined-risk trade. If META ends up at or above $675 by June 27th, the trade stands to deliver a 100% return on the amount invested. This setup provides a cost-effective way to gain upside exposure while keeping risk tightly controlled. Here is my exact trade setup: Buy $670 call, June 27th expiry Sell $675 call, June 27th expiry Cost: $250 Potential Profit: $250 I explore many such setups in depth in my book, Mean Reversion Trading , and there is a plethora of great examples 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.
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.
