My trade idea is as follows
Observations
- Google is a tricky one. Although most of the market declined, Google gapped up due to its strong earnings. However, it swiftly "filled the gap". I believe that from now on, it will follow the general market - down.
- 100MA was broken a few days ago. If it weren't for the earnings, it would have been broken and head towards 200 MA.
Proposed trade
- Start with a bear call spread with the short leg at 1750
Risk management
- Monitor how the trade goes. If it continues to go down, add a put credit spread at 50 points below the 200 MA level
- If the stock moves higher, then we can roll the call legs 100 points higher.
Profit management
- Take profit at 70% of max gains
- Monitor how the trade goes. If it continues to go down, add another bear call spread 50-100 points below.
Observations
- Google is a tricky one. Although most of the market declined, Google gapped up due to its strong earnings. However, it swiftly "filled the gap". I believe that from now on, it will follow the general market - down.
- 100MA was broken a few days ago. If it weren't for the earnings, it would have been broken and head towards 200 MA.
Proposed trade
- Start with a bear call spread with the short leg at 1750
Risk management
- Monitor how the trade goes. If it continues to go down, add a put credit spread at 50 points below the 200 MA level
- If the stock moves higher, then we can roll the call legs 100 points higher.
Profit management
- Take profit at 70% of max gains
- Monitor how the trade goes. If it continues to go down, add another bear call spread 50-100 points below.
Note
The short put, given the volatility, should be set at 1360
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.