Swing Trade Idea (VMW ) – July 25, 2023
OptionsPlay’s bearish trade for Tuesday, July 25th is VMware, Inc. (VMW). VMW is part of the Technology Sector, which has performed at 3.48% over the last month, with VMW overperforming at 16.91% over the same period.
VMW has been in a strong bullish trend and has reached a point of exhaustion as it traded into $170, from where it is pulling back. VMW is following the Technology Sector, as it pulls back from the top of a trendline. As this is a counter-trend trade, we believe that VMW will not trade higher over the duration of this trade.
As a stop loss, if VMW were to trade above $165 for multiple days, this would invalidate our analysis and will consider cutting losses on the trade. We will also consider cutting losses on this options trade if the value of the vertical spread moves above $9.90.