Market Analysis and Options Trading Ideas – Week of March 17, 2025
Trade AI’s Monday Insights
US Market Overview
To better contextualize market corrections, it is essential to take a broader view and focus on the overall picture rather than individual fluctuations.
Below (source: Yahoo!Finance) is a five-year weekly bar chart of the EQAL ETF, which tracks the equal-weighted Russell 1000 index. This index is arguably the best benchmark for our trading approach on the Trade AI platform. Unlike indices like the S&P 500 or the Russell 3000 (RUA), EQAL avoids the overweighting of large-cap stocks, offering a more balanced exposure to the broader market.
RUA, despite appearing diversified, is significantly skewed towards a few large-cap giants, making EQAL a more accurate representation.
Looking at EQAL, the correction from its all-time high of $52.18 in late November 2024 appears to have found a temporary bottom at $46.11, marking an 11.6% decline—relatively modest compared to the 24% correction seen in the first nine months of 2022. While the downtrend may not be over, we remain optimistic about a potential recovery. A first positive signal would come with a break above last week’s high of $47.99.
Macroeconomic Data and Key Events of the Week
Monday, March 17, 2025
China
- Unemployment rate (expected 5.1%; previous 5.1%)
- Annual industrial production (expected 5.3%; previous 6.2%)
- Annual retail sales (expected 3.8%; previous 3.7%)
Italy
- Monthly consumer price index (CPI) (expected 0.2%; previous 0.6%)
- Annual consumer price index (CPI) (expected 1.7%; previous 1.5%)
United States
- Empire State Manufacturing Index (expected -1.9 points; previous 5.7 points)
- Monthly retail sales (expected 0.6%; previous -0.9%)
- NAHB Housing Market Index (expected 42 points; previous 42 points)
- Monthly business inventories (expected 0.3%; previous -0.2%)
Tuesday, March 18, 2025
Japan
- Monthly Services Index (previous 0.1%)
Italy
- Trade balance (expected €5.15 billion; previous €5.98 billion)
Germany
- ZEW Economic Sentiment Index (expected 48.1 points; previous 26 points)
European Union
- Trade balance (expected €14.1 billion; previous €15.5 billion)
Canada
- Monthly Consumer Price Index (CPI) (previous reading +0.1%; expected value not available)
United States
- Monthly building permits (previous -0.6%)
- Housing starts (expected 1.38 million units; previous 1.37 million units)
- Monthly industrial production (expected 0.2%; previous 0.5%)
Wednesday, March 19, 2025
Japan
- Trade balance (expected ¥722.8 billion; previous -¥2758.8 billion)
- Monthly core machinery orders (expected -0.1%; previous -1.2%)
- Monthly industrial production (expected -1.1%; previous -0.2%)
European Union
- Annual Consumer Price Index (CPI) (expected 2.4%; previous 2.5%)
- Monthly Consumer Price Index (CPI) (expected 0.5%; previous -0.3%)
United States
- Weekly mortgage applications (previous 11.2%)
- Weekly crude oil inventories (previous 1.45 million barrels)
Thursday, March 20, 2025
Germany
- Monthly Producer Price Index (PPI) (expected 0.2%; previous -0.1%)
United Kingdom
- Unemployment rate (expected 4.4%; previous 4.4%)
- Jobless claims (expected 7,900; previous 22,000)
Italy
- Monthly construction output (previous -1.7%)
European Union
- Monthly construction output (previous 0%)
United States
- Weekly initial jobless claims (expected 222,000; previous 220,000)
Friday, March 21, 2025
Japan
- Annual National Consumer Price Index (CPI) (expected 0.9%; previous 0.8%)
United Kingdom
- Monthly retail sales (expected 0.2%; previous -0.3%)
Sector Focus: All Eyes on Gold!
The gold sector is in the spotlight as the price of gold recently surged past the $3,000 per ounce mark, setting a new all-time high.
This rally is driven by a mix of factors, including escalating geopolitical tensions, increasing global economic uncertainty, and expectations of further interest rate cuts by the Federal Reserve. These elements have reinforced gold’s appeal as a safe-haven asset, attracting strong investor demand.
Gold mining companies are benefiting from this favorable environment. Newmont Corporation, for example, has expanded its share buyback program to $3 billion, with $750 million already repurchased this year. Additionally, the NYSE Arca Gold Miners Index has risen by 14.9%, reflecting growing investor confidence in the sector.
Analysts remain bullish, with Goldman Sachs forecasting that gold could reach $3,100 by year-end, supported by rising demand from both private investors and central banks.
In summary, the current macroeconomic and geopolitical conditions have created a highly favorable environment for the gold industry, making it an attractive option for investors seeking stability amid market volatility.
Major Earnings Reports This Week
Monday, March 17
Kodak (KODK) – After Market Close
Kodak, historically known for analog photography, has had to reinvent itself amid the digital transition. Today, it focuses on digital printing, advanced materials, and chemical products. The recent resurgence of interest in analog photography could present new opportunities, but the company still needs to demonstrate long-term adaptability.
Tuesday, March 18
Huya Inc. (HUYA) – Before Market Open
Huya is one of China’s leading live streaming platforms for gaming and e-sports. The sector is expanding, but competition remains fierce. The company benefits from a growing user base and partnerships with game developers, yet concerns persist over the sustainability of its business model and regulatory risks.
Ke Holdings (BEKE) – Before Market Open
KE Holdings dominates China’s digital real estate market, offering a broad range of transaction and renovation services. Recent government policies may help stabilize the sector, but real estate market volatility remains a key factor for its growth prospects.
StoneCo (STNE) – After Market Close
StoneCo provides fintech solutions in Brazil, focusing on payment services and financial software. The company is expanding, with strong margins and solid liquidity. However, intense competition and recent negative analyst revisions pose significant risks.
Tencent Music Entertainment (TME) – Before Market Open
Tencent Music leads the Chinese music streaming market, with millions of paying users. While the online music segment continues to grow, declining revenues from social entertainment and increasing regulatory restrictions present ongoing challenges.
Workhorse Group (WKHS) – During the Trading Session
Workhorse operates in the electric vehicle (EV) market, focusing on last-mile delivery solutions. The sector is expanding, yet the company struggles to generate consistent revenue and faces uncertainty over the viability of its business model.
Wednesday, March 19
Five Below (FIVE) – After Market Close
Discount retailer Five Below continues its aggressive expansion strategy. The low-cost retail market is growing, but competition from online platforms like Temu could pressure its profit margins.
Signet Jewelers (SIG) – Before Market Open
Signet, a leader in the jewelry industry, is dealing with the rising popularity of lab-grown diamonds. Sales have slowed, and recent leadership changes may impact future growth strategies.
Guess (GES) – Before Market Open
Guess is a global fashion brand operating in a highly competitive market. Its sustainability strategy is a strength, but its earnings growth outlook remains uncertain, requiring continuous adaptation to shifting consumer trends.
General Mills (GIS) – Before Market Open
Food industry giant General Mills faces a challenging environment, marked by inflation and margin pressures. While it has a strong portfolio of well-established brands, the need to attract cost-conscious consumers could impact profitability.
Thursday, March 20
Accenture (ACN) – Before Market Open
Accenture is a consulting powerhouse with a focus on digital transformation and artificial intelligence. The sector is growing, but the company must address challenges in attracting skilled talent and keeping pace with rapid technological changes.
Academy Sports & Outdoors (ASO) – Before Market Open
Academy Sports & Outdoors, a retail chain specializing in sporting goods, benefits from increasing demand for outdoor products. However, intense competition and its reliance on the U.S. market could limit expansion opportunities.
FedEx (FDX) – After Market Close
FedEx remains a pillar of the global logistics industry but is undergoing a transition, including the spinoff of its Freight division and the loss of a key contract with the U.S. Postal Service. The evolution of shipping demand will be crucial for its future prospects.
Friday, March 21
Micron Technology (MU) – After Market Close
Micron is a semiconductor leader, benefiting from rising demand for AI-related memory solutions. However, the industry’s cyclical nature and weaker-than-expected earnings forecasts have led to increased stock volatility.
Nike (NKE) – After Market Close
Nike remains dominant in the sportswear sector, but slowing sales in China and global supply chain challenges may impact growth. Its innovation capabilities remain a key strength.
Carnival Corp. (CCL) – Before Market Open
Carnival is showing signs of recovery with record bookings for 2025. However, concerns over environmental impact and increasing competition in the cruise industry remain significant challenges.
Nio (NIO) – Before Market Open
Nio is one of China’s leading electric vehicle manufacturers but continues to report significant losses. The success of its new brands and its ability to manage operating costs will be critical for its future growth.
Options Trading Performance: How Did Last Week Go?
Since last Monday, we have analyzed several stocks preparing to release earnings, evaluating potential trading opportunities and the broader market context. Despite an overall bearish market, we aimed to identify sensible trading ideas.
In such scenarios, caution is always essential. However, these market conditions also present compelling opportunities, often offering more attractive profit potential than during “easier” periods.
Specifically, last Monday, we discussed Kohl’s (KSS), where we advised caution due to its potential high dependency on China and the implications of Trump’s trade policies. Operationally, we focused on put options with a strike price between $11 and $12, which provided strong yield rates.
Upon the earnings announcement, the stock dropped to around $8 per share, confirming initial concerns. However, the company’s fundamentals remain unchanged, meaning any assigned positions can still be managed through standard recovery procedures.
We also discussed ASAN, another fundamentally solid stock with promising prospects. We considered selling put options at a $14.5 strike, aligning with SimplyWall’s fair value assessment.
Following its earnings report, ASAN experienced a sharp decline, falling to $11.58. However, a strong rebound pushed the stock back above $13, significantly reducing theoretical losses. Investors assigned shares could either close their positions at breakeven (net of put premiums) or manage their holdings with relative confidence.
On Wednesday, we examined trading strategies for three well-balanced stocks: PATH, AEO, and S.
For UiPath, we discussed short puts at a $10.5 strike. After an initial post-earnings drop to $9.2, the stock closed Friday at $10.80, above the sold strike, making the trade successful thanks to the broader market recovery.
Similarly, AEO performed well. We evaluated selling puts at an $11 strike. Despite a post-earnings dip to $9.53, the stock rebounded above $11 by Friday’s close, securing another full profit.
Finally, SentinelOne also delivered positive results. The short put at an $18 strike closed in full profit at expiration, marking another successful trade.
Suspicious Options Movements
There are unusual movements occurring in Mizuho Financial Group (MFG) stock.
Mizuho Financial Group Inc. is one of Japan’s leading banking groups, with a global presence offering a broad range of financial services, including commercial banking, investment banking, trust services, and asset management.
Recently, Mizuho has demonstrated strong financial performance. In Q2 of the 2024 fiscal year, net income surged by 62% to ¥277 billion, driven by strong loan demand and wider interest margins resulting from the Bank of Japan’s rate hikes. Consequently, the company revised its full-year net income forecast upwards to ¥820 billion (approximately $5.26 billion) and announced a ¥100 billion share buyback program—the first in 16 years—along with a planned annual dividend increase of ¥15, bringing it to ¥130 per share.
In Q3 of the 2024 fiscal year, Mizuho continued its strong performance, reporting a 28% rise in net income to ¥289.23 billion (approximately $1.86 billion). This growth was fueled by increased loan demand, higher interest rates boosting profit margins, and a rise in non-interest income, primarily from investment banking fees in the Americas.
Additionally, Mizuho has pursued strategic initiatives to expand its global financial footprint, including acquiring a minority stake in Golub Capital, a private credit manager with $70 billion in assets under management. This move aims to meet the increasingly diversified needs of Japanese investors and strengthen Mizuho’s presence in the U.S. private credit market.
Expectations of further interest rate hikes by the Bank of Japan could continue to improve profit margins for Japanese banks, including Mizuho. Moreover, valuations of major Japanese banks have risen, with Mizuho approaching its book value for the first time in nearly a decade, reflecting investor confidence in Japan’s monetary policy normalization.
In summary, Mizuho’s recent strong financial performance, strategic initiatives, and the potential for a higher interest rate environment suggest opportunities for significant stock price appreciation. However, investors should carefully consider risks associated with the banking sector and global economic conditions before making investment decisions.
That said, a suspicious trading pattern emerged last Friday: approximately 1,300 call options with a $7.50 strike price and a June 2025 expiration were traded and carried overnight, becoming open interest. This volume stands out against insignificant OI levels on other expirations. The price at which these contracts were traded suggests that someone intentionally purchased them, likely anticipating a significant stock price increase. Whether this expectation is justified remains uncertain, but it may be worth considering a small directional trade.
