00:00 Josh
Well, markets are fighting for gains in this second day of the Santa Claus Rally period. We’re looking at ways you can play the market with the Options Playbook sponsored by Tastytrade. And joining me now, I’ve got Bob Lang, explosive options technical analyst. Bob, always great to see you. I know you got two trades for us, Bob, but before we get there, I am just curious, we’re wrapping up the year, we’re heading into 2026. How do you want to be broadly positioned here, Bob?
00:23 Bob Lang
Great to see you, Josh. Happy holidays to you and the and the team over there at Yahoo. Um, well, really we want to be positioned with a lot of cash coming into 2026. and I’ll tell you why. It’s because uh market is very complacent right now. We see the volatility index covering near 15%, which is somewhat low. We did reach below 15%, which was the low for the year just last week and, you know, I I’m it makes me a little bit nervous when uh markets are really complacent. You know, there’s an old saying is that you know, once everybody’s bought everything in the market, who’s left? And this is the sellers. So, I think having a lot of cash and taking some money off the table here. Nothing wrong with taking some profits and uh we’ve been seeing people do it today and I think it’s going to happen into next week as well too. Doesn’t mean that the Santa Claus Rally, which started on Wednesday is going to be a poor result. In fact, you know, if you look past uh history, Josh, the last two years, the uh Santa Claus rally has been negative. We’ve never had three years in a row of negative Santa Claus Rally. So, I I while it still may be positive, may not be as uh as strong as people think.
01:29 Josh
All right, Bob, that’s the that’s the broad outlook. Let’s get to some trades as well. Let’s start with Micron. This stock, Bob, is up about 240% in 2025. and analysts still love it, Bob. Even so, you got nearly 90% have a buy on the name. What’s the trade?
01:46 Bob Lang
Well, you know, Josh, I like a company that tends to prove itself with earnings. And when Micron reported earnings last week, they did just that. And I I I got to tell you something. They blew the doors off the their earnings report off of margins, off of revenue, off of earnings on guidance as well too. So, you know, they they hit it all out of the out of the park. It was a triple header for the uh for the stock of of Micron. And of course, it was rewarded to for with some upside. The nice thing about Micron, Josh is that the stock followed through to the upside after a very strong day post earnings. So, you know, I think the stock has got some more upside to it. I think $300 is a kind of a slam dunk here. It’s only about uh five and a half, 6% away from the current price. $300 would be a good spot. It’s a a Fibonacci uh retracement level that I looked at. Um but I still think that uh uh it’s got some more upside beyond that. Why is that? It’s because we saw some good strong call volume in the February and the March 300 calls. People are looking for some good upside in the stock in the beginning of the year of 2026. So I’m looking at a um a March 300 call, selling at about 2850 Jos about 10% of the price of the stock. seems a little bit rich right now, but I’ll tell you what, the stock has poised to make some big moves and we’ve seen some big money coming into Micron. So I like this one right here.
03:03 Josh
Now let’s end here on another one. I want to get your take on Cava. That is a different looking chart, Bob. Stock is down about 50% this year. What do you see there?
03:12 Bob Lang
Yeah, boy, the stock really tanked hard uh earlier this year and uh into the summertime and uh they couldn’t get out of their way and the sellers really took control of the stock. But more recently, Josh, we’ve seen the stock really pick up the pace here. We’ve had some good volume, we’ve see some good options flow. Look, it’s not uh it’s certainly not a a a incredibly bullish chart much like a Micron is, but still, I think there’s some upside here only because it’s heavily shorted. There’s a big short interest in the stock and when the uh buyers get control of this thing, the short sellers tend to uh run for cover and start buying the stock and you get an explosion to the upside here. So I’m looking for um a March 60 call here, Josh for a run up to about $73. That’s the 200 day moving average on uh Cava which should uh we should see some resistance at that level, but uh still a nice move up to 73, 74, $75 over the next couple months was going to yield a nice return on these uh March 60 calls.
04:22 Josh
Bob, always great to see you, my friend. Happy holidays.
04:25 Bob Lang
Thanks, Josh, great to see you too.