SWKS is overbought at resistance; expects a pullback.

Today, I'm going to do Skyworks because this to me, for those of you who like to trade options, I think this is something I'm looking at to buy puts on because it's about as overbought as you can get and it's at >> a resistance level.

Do you have time for a bullish prognostication on Skyworks, ticker SWKS? And one of the reasons I want to throw this one in here is because Mark Patrino talked about this this morning.

>> S WKS, I believe. Yeah. I always I I cannot get that ticker right to save my life. fan, Marie. So, you're not you're not uh alone there.

>> So, this is pretty interesting, right? This is the kind of behavior you want to see from an earnings perspective. It fades into the earnings formation. Everybody a little nervous.

Comes into a clean support stone. One, two, three, four. stays there almost five weeks into the earnings event and then it's got a bounce post drift pulls back. Look at where it stops.

Folks, listen. I know you think this might be a little bit of voodoo. I promise you it works. Ma, go to your favorite AI and say, "Build me an indicator that highlights the earning scandal on the week." and then watch how it relates to the prior earnings formations.

It's really very beautiful, especially if there's heavy congestion.

But notice what it did. It came to the base of the prior earnings formation on the pullback and now it's run dramatically. But what's going on right here? If you're looking at this trend line, which is the 100 simple moving average, and you're saying to yourself, "Oh, look at this skyworks."

Um, are you long or are you short? Yeah, you're short. You're short. And you're short because it's underneath and it's continually making lower highs and lower lows and then all of a sudden comes into earnings.

And then let's do the trend line break from the close of the candle. Test test. Almost a test right up here. A test. And this. What do you think this is? That's short covering.

It's short covering. It's all the shorts that were printing cash or short the calls or whatever. And now they have got to get out of dodge.

Now old support, new resistance once, twice, thrice. Fourth time is the breach. It's making higher lows. It's very likely to pull back before it gets another rise to the upside. That's my suspicion.

>> Okay. So, this type of candlestick is short covering or longs just chasing the edge and we're already up to our first target event which is at 92. The next one near 100.

So, you might go, well, why can't I just go after 100? You can. The question is, do you expect it to get there tomorrow after it's moved up 735 today? The weekly ATR is $8. It's moved in a week of motion.

It's moved in one day. The AT the normal ATR $8. It's already moved that in one fell swoop in one day. For the normal day, the ATR is 380. So, it's moving at about 2 ATR right now.

>> Yeah, that's great. But those things exhaust and and they exhaust with pretty relative frequency. And the volume right now, well, it's early in the day. The volume's still low, but take a look at that. It should exhaust.

What would I do? You know, I I'm an options gal. I'm gonna go down and I'm gonna I'm gonna sell. >> And Amarie, it's also worth noting here, Skyworks 36.38% of the float shorted with 5.81 days to cover. One of its highest readings ever.

>> Yeah. So, that screams short covering to me. Yeah. And so from that perspective, you know, is it fair to go, hey, you know, I'm going to sell the 105 calls or I'm going to sell Where's the most?

Look at that. Almost 2,000 of those in there. I'm going to sell the 80 puts right now.

We don't normally do naked strangles in here because we all want to sleep at night. But you could right though. But you could turn that into you could turn that into an iron condor.

That's 85. Excuse me. 75. That looks pretty good. It's literally Look at how much V Wow. I wonder if that would even fill. That's giving you almost the entire spread. It's a $5 spread and it's giving you $457. That's very interesting.

>> I was going to say that seems unbelievable actually. >> Yeah, that's that's that's the space where you go Row. Um, you know, I if you can get it, just watch it and see because it's going to leak, right?

It's going to leak. And it's only it's looking for $13. So, you know, this 105 area is going to be right up on the edge of that if it does exactly what it's positioned to do. But, you know, you're going to get theta decay.

>> Yeah, >> that's six bucks a day. So, you know, I I like this for um a sideways trade, but if you are looking for more upward flow, I would say you better be trading that on a five minute and watching it all day.

>> Right. I don't That is a short squeeze. Now, you could chase a short squeeze. You could I mean if you're thinking to yourself, >> hey this is great then you can go listen you easily you can just I bet the 100 is cheap as could be 95 cents right that if you want to chase it there you go