Trade Alert (EEM) for 4/30/2021

1:30pm (EST)

I have a Trade Alert and important market update for today so let’s go check the tape.

Trade Alert!

iShares MSCI Emerging Markets ETF (EEM, $54.08, down $0.87)

EEM May 55 calls (EEM210521C00055000, $0.50, down $0.40)

Entry Price: $1.00 (4/5/2021)
Exit Target: $2.00
Return: -50%
Stop Target: None

Action: Close the trade at current levels to save the remaining premium.

The option has three weeks before expiration and shares are still holding the 50-day moving average. However, a close below $54 could signal additional weakness and May is typically a volatile month for the market.

Volatility is also rising as the VIX is nearing 20. In fact, a close above this level and the 50-day moving average could signal market weakness as we head into May. If this technical setup plays out, there could be a number of opportunities to use put options to make some very profitable trades over the next few weeks.