00:00 Josh
Well, on day two of the Santa Claus rally, the market is vying for gains. We’re looking for ways to participate in the market with our Tastytrade sponsored options booklet. Joining me now is Bob Lang, explosive options technical analyst. Bob, nice to meet you. Bob, I know you’ve got two deals for us, but before we get there, I’m just curious, we’re coming to the end of the year and we’re heading into 2026. Bob, how would you like to position yourself broadly here?
00:23 Bob Long
Nice to meet you, Josh. Happy holidays to you and the Yahoo team. Well, okay, we do want to have a lot of cash in 2026. I’ll tell you why. That’s because uh the market is very complacent right now. We see the VIX approaching 15%, which is a bit low. We did hit below 15%, which was a one-year low last week, you know, it makes me a little bit nervous when uh the market is really complacent. You know, there’s that old saying, once everyone buys everything on the market, who’s left? This is the seller. So, I think having a lot of cash and taking some money from here. There is nothing wrong with taking profits, we have seen people do it today and I think it will happen next week as well. That doesn’t mean the Santa Claus rally, which starts on Wednesday, will have a bad outcome. In fact, you know, if you look back at history, Josh, the Santa Claus rally has been negative over the past two years. We’ve never had a negative Santa rally three years in a row. So while it may still be positive, it may not be as powerful as one might think.
01:29 Josh
Well, Bob, that’s the big picture. Let’s do some trading as well. Let’s start with Micron. This stock, Bob, is up about 240% in 2025. Analysts still love it, Bob. Even so, nearly 90% of people still believe the name. What’s the trade?
01:46 Bob Long
Well, you know, Josh, I like a company that tends to prove itself through profitability. That’s exactly what Micron did when it reported earnings last week. I have to tell you something. They report margins, revenue and guidance in their earnings reports. So, you know, they went all out. This is a triple header for Micron stock. Of course, it also got some benefits. Josh, the good thing about Micron Technology is that the stock continues to rise after a strong earnings report. So, you know, I think the stock has more room to go. I think $300 is a slam dunk here. Compared to the current price, it’s only about uh five and a half, 6% off. $300 would be a good place to be. What I’m seeing is the Fibonacci uh retracement levels. Um, but I still think there’s more to it than that. why is that? This is because we saw some strong call volume in February and 300 calls in March. People are looking for some good upside in the stock in early 2026. Therefore, I’m looking at a March $300 call option selling for about $2850, which is about 10% of the stock’s price. It’s looking a little rich right now, but what I will tell you is that the stock is primed to make some big moves, and we’ve seen some big money flow into Micron. So I like this one here.
03:03 Josh
Now let’s end with one more thing. I’d love to hear your thoughts on Cava. Here’s a chart that looks different, Bob. Inventories are down about 50% this year. What do you see there?
03:12 Bob Long
Yes, gosh, stocks did fall significantly earlier in the year and heading into the summer, they couldn’t get out of the way and sellers did take control of the stock. But lately, Josh, we’ve seen the stock really pick up the pace. We’ve gotten some good volume and seen some good selection flow. Look, it’s not uh, it’s certainly not an incredibly bullish chart like Micron, but I still think there’s some upside here just because it’s heavily shorted. There’s a lot of short interest in the stock and when uh buyers take control of the stock, the short sellers tend to seek cover and start buying the stock and you’ll see an explosive rise here. So I’m looking at the March 60 call, Josh, and the stock went up to about $73. This is uh the 200 day moving average of Cava and we should see some resistance at that level, but uh over the next couple of months, uh it’s still a nice run up to $73, $74, $75, which will provide a nice return on these uh March 60 call options.
04:22 Josh
Bob, nice to meet you, my friend. happy holidays.
04:25 Bob Long
Thanks, Josh, great to meet you too.