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Swing Trade Idea (U) – February 13, 2024

Our bullish trade for Tuesday, February 13th is Unity Software Inc. (U). U is part of the Technology Sector, which traded at 7.64% over the last month, with U underperforming at -2.07% over the same period.

U has respected support at around $32 over the medium term, and recently bounced higher off this level when strength increased. With the overall Technology sector being very bullish, U has been underperforming relative to its sector even though the latest earnings were above expectations. With the next earnings on Feb 26, we expect to see a further bounce to the upside. we are therefore playing a safe Credit Spread on this trade to collect a premium/width of over 50%.

As a close, if U were to trade below $33 for multiple days, this would invalidate our analysis and we 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 $5.34 Debit.