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JUN 2021: AMGN $232.5 – $237.5 Bull Call Spread

Stock

ADSK

Trade Structure

$232.5- $237.5 Call Spread

Trade Date

6/1/2021

Price Paid

$250

Expiration Days

7/2/2021

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

This is a very simple mean-reversion trade. A massive red candle on 6/1 on literally no news caught my attention. There is clear support around 232 and DI- had been pointing down for a few days. When I took this trade, RSI hadn’t caught up yet, but is confirming my directional bias now as well.

Trade Selection Criteria

Overall market movement

May sell-off is behind us and markets are in decent shape. There is no exaggerated movement in the overall markets and this trade is based on purely this stocks own movement. 

N/A

No Earnings or Significant News

Earnings are behind us and were announced on 4/27

Bollinger Bands outside Keltner Channels

Bollinger bands are clearly outside Keltner Channels.

RSI Analysis

RSI is pointing up giving this trade more conviction

ADX Analysis

DI- and DI+ are both reversing directions. This is a very text-bookish trade. Don’t see many of these in real life.

Trade Analysis

Not many trades play out like the text-bookish example this was. Perfect entry at the bottom of the Bollinger bands followed by a perfect exit at the top. Not much to say here 🙂

WINNERS THIS WEEK

Trade Outcome

WINNER

Profit/Loss

$235

Beginning Account Balance

$11,650

Ending Account Balance

$15,100

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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