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July 2020: CRM $185 – $190 Bull Call Spread

Stock

CRM

Trade Structure

$185 - $190 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.

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Trade Rationale

CRM trade is also similar to OKTA and ADBE. I did get in at a slightly higher price point $185 -$190, but I know many of you were able to get in at $180-$185 spread. The $180 support line seems very strong and $180-$185 is a nice entry point for this trade.Also, if you have been trading with me for some time, you will notice that since I do mean reversion trades, after I post the trade alert, you get many opportunities to get into the trade for a better price than me. This is because nobody can catch bottoms or tops, so after I post my trade, the stock can continue going against me for a couple of days. This also brings out a nice point - there is no need for you to drop everything you are doing and pull the trigger when you see a trade alert. I encourage the mentality of looking at the trade, understanding the structure and see if you can get filled. If you don't get filled, simply let the trade go and wait for the next one. There is always another trade around the corner.

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

Earnings are behind us and were announced on 5/28

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

This trade was a picture perfect trade. CRM took off in our direction after we put on the trade and we were able to close it for 94% profit in 3 weeks.

Trade Outcome

WINNER

Profit/Loss

$235

Beginning Account Balance

$5,400

Ending Account Balance

$6108

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

1 Comment

  1. Meena Mehta

    I just finished the book and signed up

    Reply

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