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Swing Trade Idea (PG) – February 7, 2022

As we head into another week of earnings, the major indices managed to hold key levels. SPY and QQQ are trading above their $428 and $352 respective support levels. While the move higher last week was encouraging, price action indicates that this is not a straightforward rebound that we have seen over the last 2 years. This is largely due to the hawkish macro environment with additional rate hikes expected. Additionally, downgrades in GDP forecasts do not provide the much-needed optimism for equities to rebound strongly. While we maintain our bullish/neutral view on the major indices, we note that it might be a more difficult grind higher for equities especially with value rotation continuing to be the theme. 

Our bearish idea is Proctor & Gamble (PG). Despite PG’s impressive outperformance in recent weeks relative to the overall market, price is now at a major resistance area at $165 where we are seeing bearish price action. This provides an excellent risk/reward bearish entry. The next area of support is at $156. By using a Call Credit Spread, this trade will still be able to profit under neutral market conditions.