Most of our watchlist stocks were under pressure last week, which gave us some good entry points. As I have pointed out earlier, with mean reversion trading, the stocks will usually keep going against me after I put on the trade before turning around and heading in my direction. A nice side-effect of this is that you don’t have to jump at a trade alert the moment you see it. If you are busy or see my alert hours later, that is perfectly fine. Most of the time, you will get opportunities to enter the trade at better strikes than what I post if you wait for it. All software stocks have been under pressure lately after the massive run up they have experienced this year. I would simply attribute this to profit taking which is expected after these runups. DOCU has fallen down to a well-established support level of $215 which prompted me to take this trade.

DOCU took off almost immediately after putting on this trade, but reversed back after a few days. We had to wait until the last week to close this trade. But in the end we banked our 94% ROI as usual on all these trades.