Technical Analysis

MON rebounded but rejected at the down trend channel resistance with Bearish Engulfing candlestick pattern. This is the reversal pattern. Similar trade setup as previous one except different strike price and different expiry date.

See previous analysis for Monsanto (MON) Trade idea here. This is a perfect example that we can trade the same stock again and again if you understand the stock well which has predictable chart pattern.

Trading Strategy: Short Call Spread 100/105

• Direction: Bearish
• STO MON Oct 13 100 Call
• BTO MON Oct 13 105 Call
• Entry: $100.86
• Price Target: $90 by Oct expiry
• Breakeven Price: $102.10
• Max Profit: $840
• Max Loss: $1160
• Reward vs Risk: 0.72
• Probability Price Below Breakeven: 62.45%
• Cut loss if MON goes above $105 as the down trend channel chart pattern is no longer valid.

Chart from thinkorswim, open an account to get FREE chart here. Original post by Marubozu.

Trading Strategy: Short Call Spread 100/110

• Direction: Bearish
• STO MON Aug 13 100 Call
• BTO MON Aug 13 110 Call
• If break down trend channel resistance (about $105), close both positions.
• Breakeven Price: $103.80
• Max Profit: $1149
• Max Loss: $1851
• Reward vs Risk: 0.62
• Probability Price Below Breakeven: 74%

MON Chart

MON Fundamental