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Proactive Spreads, December 11th, 2017 - UNP, JPM, HD

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That's about as deep as a pullback you'll see.

The market shook off a tiny bit of weakness last week and is reattempting all time highs. SPX volatility still remains low, bur rotational corrections abound. Tech actually got hit pretty hard over the past 10 days, and there were some good opportunities there.

Now I'm looking for some of these names that have run hot to start to pullback. That's the theme of all the trades we're looking at today.

Trade #1: UNP

UNP has been a monster this month. Clear breakout above 120 and went parabolic last week. Now is the time to start hunting for a pullback. Look for a push into the 20 day moving average and previous price support to start selling some spreads.

Trade Setup

Expected Price: 125

Sell to Open UNP Feb 115/110 Put Spread

Tier 1: Enter at 0.65, Exit at 0.15

Tier 2: Enter at 0.95, Exit at 0.45

Tier 3: Enter at 1.25, Exit at 0.75

Trade #2: JPM

Same premise here. The stock went parabolic last week, now we're stalking a pullback into previous resistance, potential support.

Trade Setup

Expected Price: 102.50

Sell to open JPM Mar 95/92.50 Put Spread

Tier 1: Enter at 0.45, Exit at 0.20

Tier 2: Enter at 0.60, Exit at 0.35

Tier 3: Enter at 0.90, Exit at 0.50

Trade #3: HD

Notice the pattern yet?

Parabolic last week, look for a pullback to its 20 day moving average.

Trade Setup

Expected Price 176

Sell to Open HD Feb 165/160 Put Spread

Tier 1: Enter at 0.70, Exit at 0.20

Tier 2: Enter at 1.00, Exit at 0.50

Tier 3: Enter at 1.30, Exit at 0.80

Disclaimer

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