Trade of the Week - MDB - Tuesday (Feb 6th, 2024)

From our trading desk to yours: Each Monday we pick one stock to highlight - from our unique perspective - and share with clients how we analyze & trade it using primarily options.

This week, Archna (our advanced options contributor), offered up Mongo DB (a cloud-computing mid-cap tech play), as a bullish breakout play. All of us happened to agree except how to trade it.

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Samantha LaDuc is the founder of LaDucTrading, and can be found discussing macro-to-micro market-moving news, sector rotation & trades in her live trading room & in her client slack workspace, while making her chase, swing & trend portfolios & custom trade support available for CLUB/EDGE clients.

Samantha is bullish:

Swing Timeframe:

MDB is channel chopping 394 to 444, so this makes it only speculative play at best for me, even if others really like it!

I like Mongo as SWING LONG to 527 next few months. Sadly, the options are unattractive risk reward, so I would not play this pick under most circumstances, because options are not liquid enough for me.

IF I were to play MDB via options, I would add a small directional lotto option bet - since IV is expensive and options market is thin - in the APR strikes: like 430C or 470C.

But ideally I would want a financed call spread with a high conviction play:
selling the JULY 350P to finance a 430x530CS for practically scratch.

Problem is with MDB having such a thin options market, that advanced options tactic would be very hard to protect/navigate around. I have no desire to make a market.

So either SMALL SIZE or not at all despite nice looking consolidation and holding 429 monthly support. Good luck!

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Archna is a live trading room moderator for CLUB & EDGE clients in the morning, then takes to the live stage in discord for our COMMUNITY clients actively teaching and trading advanced options.

Archna is bullish:

Chase Timeframe:

MDB broke higher last week. With SNOW and other software names rallying, MDB is prime to continue the breakout. With little less liquid options, I am choosing the Feb 16th monthly options expiration week to do a call debit spread. 450/460 for Feb 16th for 2.82

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Rithika is a live trading room moderator for CLUB & EDGE clients in the morning, while managing Samantha's Chase trades, then takes to the live stage in discord for our COMMUNITY clients contributing education and swing trade set ups using her Elliott Wave analysis.

Rithika is bullish:

Swing Timeframe:

MDB has a potential Wave 5 upward impulse once it can get over 438. It can then test 450, 475, 500, 515 but it must stay above 415.

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Tiffany manages Samantha's Swing Portfolio for CLUB & EDGE clients, does thematic research/analysis on Samantha's Trend Portfolio names, and contributes her options gamma analysis & trades for all clients.

Tiffany is bullish:

Swing Timeframe:

Options are thin on MDB and the skew-adjusted gamma exposure relative to average volume is basically zero so options are not a driving force of spot price. It looks choppy between 420-430 and strong call wall resistance at 450 and 460. I don’t really have an opinion otherwise on MDB.

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MDB Trade Review