Feb 2020: BKNG $1845- $1885 Bull Call Spread

Stock

BKNG

Trade Structure

$1845-$1885 Bull Call Spread

Trade Date

02/03/2020

Expiration Days

02/21/2020

Trade Rationale

Feb 2020: BKNG $1845- $1885 Bull Call Spread. This trade goes in conjunction with a $1875 - $1895 Bull Call Spread and $1900 - $1915 Bull Call Spreads which I bought just a few days ago. DOW crashed 700 points due to the coronavirus scare after that. Since my rationale is the same, I am basically building my position here.

Trade Selection Criteria

Overall market movement

After making new highs, week after week, Dow Jones dropped up to 500 points yesterday at one point in the day. The market had its worst day since Oct 2019.

No Earnings or Significant News

Earnings are behind us and the next earnings will be after our expiration cycle. Earnings scheduled for 02/26/2020

Bollinger Bands outside Keltner Channels

Bollinger Bands are way outside Keltner Channels. As you can see in the chart, BKNG dropped like a rock in the past few days with no real reason. Since, I am aware of the stocks “personality”, this is highly unusual. Perfect time for a mean reversion trade 

RSI Analysis

RSI is below 30 indicating oversold conditions. But not showing clear signs of a reversal.

ADX Analysis

ADX below 40. So not too strong and not weak. Again, we are not getting any clear signals here as well.

Trade Analysis

Analysis will be updated when we close the trade.

Trade Outcome

N/A

Profit/Loss

$N/A

Beginning Account Balance

$16,200

Ending Account Balance

$N/A

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