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July 2020: ADBE $420 – $425 Bull Call Spread

Stock

ADBE

Trade Structure

$420 - $425 Bull Call Spread

Trade Date

07/14/2020

Price Paid

$250

Expiration Days

08/14/2020

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

To participate in our live challenge and to access our online training, please click “Your Account” and upgrade to the “Live Trader” plan.

 

Trade Rationale

ADBE's trade is almost a clone of OKTA trade. On days when the markets pull back, you will find most charts looking similar to each other, which gives you multiple trading opportunities. It also gives you a chance of adding some diversification on your portfolio. In my 25k challenge portfolio, I hardly ever do 2 trades on the same stock in the same expiration cycle. This is a great example of where instead of putting on 2 contracts of OKTA, you add an ADBE instead.

Trade Selection Criteria

Overall market movement

The market has been going up non-stop for 10 days, and we got a quick pullback today, when DOW dropped more than 300 points today.

No Earnings or Significant News

Next earnings are on 09/15

Bollinger Bands outside Keltner Channels

Bollinger Bands are outside Keltner Chanels. 

RSI Analysis

RSI is smack in the middle (i.e not oversold or overbought)

ADX Analysis

ADX is pointing down and below 25, indicating that the downward pressure is not sustainable.

Trade Analysis

ADBE got stuck in a trading range after we put on this spread, whipsawing between profits and losses all throughout our trade's lifetime. However, all we needed was for it to expire above $425 and we still made a handsome 94% ROI on this trade. Simply beautiful!

Trade Outcome

WINNER

Profit/Loss

$235

Beginning Account Balance

$5,400

Ending Account Balance

$5900

To follow along the strategies we use in the $25K challenge, we recommend that you get the strategy book which explains the whys and wherefores of our method. Get it here=> https://amzn.to/2MUOCE5

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