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FEB 2021: HD $255 – $260 Bull Call Spread

Stock

HD

Trade Structure

$255 - $260 Call Spread

Trade Date

2/24/2021

Price Paid

$250

Expiration Days

04/01/2021

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

HD slightly beat earnings. Nothing special to write home about. But got punished anyway. The stock fell from $283 to $250 for no real reason. We are already seeing a green candle and just like with many other trades, things should snap back. All we are asking for is a slight recovery in the market next week.

Trade Selection Criteria

Overall market movement

N/A this is a post earnings trade. The individual stock’s price action is more important for these trades.

No Earnings or Significant News

This is a post earnings trade. Earnings were announced a few days ago.

Bollinger Bands outside Keltner Channels

Bollinger bands are clearly outside the Keltner Channels.

RSI Analysis

Although, this is a post earnings trade, RSI is now beginning to show some signs of a recovery

ADX Analysis

DI- is pointing down, giving us further conviction about this trade.

Trade Analysis

HD got dragged down further all the way down to $246 giving many of our members way better entry points than my own trade. But it quickly turned around to make a dramatic recovery. March was a brutal month for Nasdaq, and all these other trades that we took in stocks like HD, REGN, LOW etc gave us a helping hand in handling the correction.

Trade Outcome

WINNER

Profit/Loss

$235

Beginning Account Balance

$13,400

Ending Account Balance

$10,250

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