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MAR 2021: TGT $172.5 – $177.5 Bull Call Spread

Stock

TGT

Trade Structure

$172.5- $177.5 Call Spread

Trade Date

3/2/2021

Price Paid

$250

Expiration Days

04/09/2021

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

Massive red candle on an earnings beat? Another reason why I don’t put trades on when earnings are coming up. TGT got pulled down with the market and I entered the 172.15 - 177.5 spread when TGT was around 174. I did this based on the clear support at $175ish level. TGT got pulled further down as the entire market was in a free fall, and has recovered since.

Trade Selection Criteria

Overall market movement

Nasdaq has been in a massive correction the entire month of March. Making use of the deep discount that every stock is trading at this time.

No Earnings or Significant News

N/A

N/A

Bollinger Bands outside Keltner Channels

Bollinger bands are clearly outside the Keltner Channels.

RSI Analysis

RSI is in over-sold territory and not showing any clear signals. However, support/resistance and ADX are supporting this trade. 

N/A

ADX Analysis

DI- is pointing down. In addition to this the clear support at $110 is a factor for taking this trade. 

Trade Analysis

Target kept falling initially all the way down to $166, giving our members many opportunities to enter it at lower strikes. However, it reversed after 5 days and just took off to the races. We were able to close this for our full profit target in 24 short days.

Trade Outcome

WINNER

Profit/Loss

$235

Beginning Account Balance

$13,018

Ending Account Balance

$10,200

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

6 Comments

  1. Smiley

    Hi, for this TGT trade, what date did the entry take place?

    Reply
    • Nishant

      Please read the post. All the information is there.

      Reply
      • Yushuang Hu

        thank you so much for the teaching!, I have went over your book so many time, absolutely great book! just wandering if the trade date above on TGT at 3/29/2021 is accurate? because I see on the chart its around 3/02/2021 when the price hits 175ish. really appreciate the response. thank you!

        Reply
        • Nishant

          Fixed the typo. The correct date is 3/2

          Reply
  2. B.

    I think there may be an error in your stated entry date. In the blue box at the top you state the entry as 3/29/21. But in your write up you talk about holding the trade for 24 days. I’m wondering if you took this trade in February.

    Reply
    • Nishant

      Thanks. Fixed the date. The trade open date was 3/2/2021

      Reply

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