Jan 2020: BKNG $1875- $1895 Bull Call Spread
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 is below 30 indicating oversold conditions. But not showing clear signs of a reversal.
ADX below 40. So not too strong and not weak. Again, we are not getting any clear signals here as well.
Beginning Account Balance
Ending Account Balance