This software giant is due for a big catch-up trade as stock market rallies. How to trade with options
Even with an uncertain geopolitical backdrop, the broader markets are staging a massive, face-ripping rally. As a technical trend trader, I never try to fight the tape. Both the S & P 500 and the Nasdaq have just minted fresh all-time highs, and the golden rule of breakouts is that new highs tend to breed more new highs. While the sheer velocity of this upward move is almost staggering, the underlying momentum is what commands my attention. A brief pullback is inevitable, but I expect any dip to be short-lived, offering us prime buying opportunities. Ultimately, market sentiment has completely flipped, and regardless of how rational we think equities are, they remain heavily driven by sentiment. Catching these aggressive sentiment shifts in real time is incredibly difficult for any human trader. That is exactly why I built Maya, an algorithm grounded entirely in technical analysis with zero emotional bias. While most traders were still paralyzed by fear and wondering if it was safe to re-enter, Maya quietly doubled its account during this exact recovery phase. If stepping back from the screens and utilizing a 100% rules-based system interests you, feel free to check out the details here . For today’s setup, my crosshairs are locked on Salesforce (CRM) . While most of the market has already staged a fierce comeback, there are always a few names that lag behind the pack. As a mean reversion trader, hunting down these exact laggards is my primary focus, operating on the premise that a rising tide will eventually lift all boats. In a tape this aggressively bullish, you could almost throw darts, but I still demand strict confirmation before deploying capital. I am relying on two core indicators for CRM: RSI (Relative Strength Index): CRM suffered a brutal 38% haircut over the last three months, dragging its RSI deep into the oversold zone below 30. I never buy a falling knife just because it looks cheap, but rather, I wait for proof of life. That exact confirmation flashed on April 13th when the RSI surged back above the critical 30 line. It has been climbing aggressively ever since, setting up a high-probability mean reversion play. Accelerated MACD (5, 13, 5): I prefer this faster MACD setting to catch momentum pivots before the rest of the market wakes up. This indicator fired off a clear bullish crossover on April 14th. Since that trigger, the momentum has remained completely intact, with the blue MACD line holding a commanding lead over the yellow signal line. The trade setup: CRM 185-190 bull call spread To play this catch-up bounce, I am targeting the 185/190 bull call spread. Right now, you can get filled on this structure for roughly $2.50. This pricing keeps position sizing effortless. For instance, scaling into a 4-contract position means risking exactly $1,000 to potentially walk away with a matching $1,000 in profit. What I love about this trade is that we are not asking for a miracle. CRM does not need to print a massive, market-beating breakout. If the stock simply drifts past the $190 mark by our expiration date, we secure the full 100% return. Given how oversold the stock is, combined with the sheer force of the broader market rally, that modest move is highly achievable. Here is my exact trade setup: Buy $185 call, May 22 expiry Sell $190 call, May 22 expiry Contracts: 1 Cost: $250 Potential Profit: $250 -Nishant Pant Founder: https://tradewithmaya.com/ Author: Mean Reversion Trading Youtube, Twitter: @TheMeanTrader DISCLOSURES: Nishant has a CRM bull call spread expiring on May 22. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its 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 CONSTITUTE 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.
About the Author
