After a month of consolidation, the S&P 500 is breaking to new highs. It’s playing catch up after smallcaps (Russell 2000 index) has gone parabolic.
Our trade approach here is pretty straight-forward. We’re now hunting for pullbacks in names that have broken out but are extended.
Trade #1: TXN
Looking for a pb2ma – pullback to moving average.
Expected Price: 86
Sell to Open TXN Nov 82.5/77.5 Put Spread
Tier 1: Enter at 0.75, Close at 0.25
Tier 2: Enter at 1.05, Close at 0.45
Tier 3: Enter at 1.35, Close at 0.95
Trade #2: UNP
Similar setup as TXN– looking for the pullback into its 20 day moving average.
Sell To Open UNP Nov 105/100 Put Spread
Tier 1: Enter at 0.60, Close at 0.10
Tier 2: Enter at 0.90, Close at 0.50
Tier 3: Enter at 1.20, Exit at 0.80