JUN 2021: AMGN $232.5 – $237.5 Bull Call Spread

Stock

ADSK

Trade Structure

$232.5- $237.5 Call Spread

Trade Date

6/1/2021

Price Paid

$250

Expiration Days

7/2/2021

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

This is a very simple mean-reversion trade. A massive red candle on 6/1 on literally no news caught my attention. There is clear support around 232 and DI- had been pointing down for a few days. When I took this trade, RSI hadn’t caught up yet, but is confirming my directional bias now as well.

Trade Selection Criteria

Overall market movement

May sell-off is behind us and markets are in decent shape. There is no exaggerated movement in the overall markets and this trade is based on purely this stocks own movement. 

No Earnings or Significant News

Earnings are behind us and were announced on 4/27

Bollinger Bands outside Keltner Channels

Bollinger bands are clearly outside Keltner Channels.

RSI Analysis

RSI is pointing up giving this trade more conviction

ADX Analysis

DI- and DI+ are both reversing directions. This is a very text-bookish trade. Don’t see many of these in real life.

Trade Analysis

Not many trades play out like the text-bookish example this was. Perfect entry at the bottom of the Bollinger bands followed by a perfect exit at the top. Not much to say here 🙂

WINNERS THIS WEEK

Trade Outcome

WINNER

Profit/Loss

$235

Beginning Account Balance

$11,650

Ending Account Balance

$15,100

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