Nov 2019: AMZN $1820- $1800 Bear Put Spread
Trade Selection Criteria
Overall market movement
With S&P 500 making new all time highs week over week for 6 weeks now, the overall market and practically every stock in my watchlist is making new highs. AMZN was beaten down but bounced right back up with the market. But the ADX is not supporting this sudden upward price movement.
No Earnings or Significant News
Earnings are behind us and were announced on 10/24. There is no significant news or earnings event during our trade cycle.
Bollinger Bands outside Keltner Channels
Bollinger Bands are clearly outside Keltner Channels. Perfect time for a mean reversion trade
RSI is in over-extended territory, however not showing any clear signs of trend reversal.
ADX is clearly not supporting the upwards price movement we saw in the last week. This in combination with all other observations, give us a good reason to put on a mean reversion trade.
Beginning Account Balance
Ending Account Balance