Volatility continues to pick up… on both sides fo the trade. After a strong breakdown, there was very little followthrough. This led to a big gap higher into the range. So far it feels like another failed breakdown. I’m keeping a close eye on the open trade from August 17th… if the market can get back above that and hold, then we’re going to run hard into 2500.
Trade #1: BABA
Stock had a great run after earnings. I’m expecting it to pull back and establish a new equillibrium range. Into that pullback is where I want to short put spreads. I’m looking at the 10 day moving average as the first support level.
Expected Price: 167
Sell To Open BABA Oct 145/140 Bull Put Spread
Tier 1: Enter at 0.65, Exit at 0.15
Tier 2: Enter at 0.95, Exit at 0.65
Tier 3: Enter at 1.25, Exit at 0.95