MAR 2021: TGT $172.5 – $177.5 Bull Call Spread

Stock

TGT

Trade Structure

$172.5- $177.5 Call Spread

Trade Date

3/2/2021

Price Paid

$250

Expiration Days

04/09/2021

THIS IS A DELAYED TRADE FOR EDUCATIONAL PURPOSES ONLY.

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Trade Rationale

Massive red candle on an earnings beat? Another reason why I don’t put trades on when earnings are coming up. TGT got pulled down with the market and I entered the 172.15 - 177.5 spread when TGT was around 174. I did this based on the clear support at $175ish level. TGT got pulled further down as the entire market was in a free fall, and has recovered since.

Trade Selection Criteria

Overall market movement

Nasdaq has been in a massive correction the entire month of March. Making use of the deep discount that every stock is trading at this time.

No Earnings or Significant News

N/A

Bollinger Bands outside Keltner Channels

Bollinger bands are clearly outside the Keltner Channels.

RSI Analysis

RSI is in over-sold territory and not showing any clear signals. However, support/resistance and ADX are supporting this trade. 

ADX Analysis

DI- is pointing down. In addition to this the clear support at $110 is a factor for taking this trade. 

Trade Analysis

Target kept falling initially all the way down to $166, giving our members many opportunities to enter it at lower strikes. However, it reversed after 5 days and just took off to the races. We were able to close this for our full profit target in 24 short days.

Trade Outcome

WINNER

Profit/Loss

$235

Beginning Account Balance

$13,018

Ending Account Balance

$10,200

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