Oversold Play in GS

[Steven Place]

It’s ugly out in the markets right now, and with a follow-through day on a friday, I’m looking for bull put spread ideas.

GS is one of those because it’s been hit pretty hard and has been a reliable trade for a long time for me.

Here’s the chart:

We’ve now got 2 consecutive days on a move below the 2nd standard dev bollinger. We’ve just gone through a volatility expansion and are almost (but not fully) oversold on the daily cahrt.

I think you can get into some March bull put spreads here with a very nice “comfort zone.”

Sell GS March 160 Put
Buy GS March 155 Put
Credit: 0.90

Close the trade if we lose 160.

Here’s where our breakeven is headed into March expiration. I think it’s high odds that we will stay above that level.

[Author]

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