TRADE - 770 put - based on 30min and weekly charts

24 févr. 2020

This 30min chart follows the weekly chart I posted yesterday (linked). There is a gray horizontal resistance line and 2 red support lines. I waited until after 10am to open a trade for two reasons: 1) to see where first 30min candle closed, and 2) to allow IV to drop a bit so options become cheaper. I chose puts because today's opening was a complete reversal of last week's candle (open is below last week's green candle body) and this is extremely bearish. However I am cautious because stochastic is still above RSI; will see if %D comes below RSI for more confidence to hold overnight.

I am only holding one weekly contract, 770 put, that I bought at $4. I have no idea where stock will go, how IV will fluctuate, and I have to be prepared to lose my capital if I hold overnight and stock pops up. Today I will exit if stock goes over 864 (option about $3).

25 févr. 2020

Transaction en cours

I am holding my put, as planned. First I remind myself of the weekly context. Then I see on 30min chart, the 20sma is now below the cloud and yesterday's last 3 candles showed a bearish pattern at the 10sma. I also like that 30 and 60min stochastics are below RSI. Small position size allows me comfort in a losing position until I decide to exit the trade, regardless of gain or loss.

25 févr. 2020

Transaction en cours

See today's 30min chart. Stock retreated from intersection of resistance line (upper red line) and 20sma. It was technically perfect. On weekly there is much more room for a drop, but I will close today if price reaches daily 20sma, 773-775. 30min candle just closed below lower red support line.

25 févr. 2020

Trade fermée manuellement

Sold put for $11 (bought at $4). Stock did not reach 20SMA target. Sometimes we choose between keeping funds in a position or using them for a new trade.