Bull Flag in YGE

[Steven Place]

This is a simple post-earnings bull flag, with support at 5.30 and resistance right at 6 bucks

 

Now the stock has attempted a few times to break above 6, so it’s not really the cleanest chart. But I think if it can attack 6 again, we’ve got a nice risk point at 5.80.

YGE options are pretty liquid, but they still trade in .05 increments (on a $6 stock) which means there’s going to be a bit of slippage there.

I like buying the Oct 6 calls for around 0.45. You can put a very aggressive stop under 5.80, the most recent higher low. Also, since this is a lower priced stock, I’m OK with just trading the stock itself.

 

[Steven Place]

The Oct 6 calls are now running for 1.00, which is a full double.

The measured move for YGE is 6.75 and we’ve already surpassed that.

You need to take some profits now and roll up your stop to 5.98. If we do get a pullback, the theta risk can really come back to get you, so do be careful with that. You could also consider selling the Oct 7 Call against your position but that would really limit your upside.

[Steven Place]

YGE just never looked back.

It’s going parabolic, so continue to raise stops. If YGE loses today’s low at 7.45 then exit the trade.

Also consider rolling the Oct 6 calls up to the Oct 7 calls.

Oct 6 calls now going for 2.30.

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