SPDR S&P 500 ETF (SPY) : Short Vertical Call Spread

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Technical Analysis & Fundamental Analysis

S&P500 rejected at 2000 historical high and SPY rejected at 200. Technically it looks like SPY is going through a correction with short term price target at 190 (Up Trend Channel Support and also the Resistance turned Support level).

Fundamentally S&P500 is over value base on PE ratio. See PE Ration Comparison table here.

SPY Sept 13-2014

 

Trade Setup

  • Strategy: Short Term Directional Bearish Trade.
  • Target: $190
  • Short Call Spread SPY 195/200 Oct 2014 (2 contracts)
  • Max gain @ expiration $690
  • Max loss @ expiration $310
  • B/E @ expiration $198.44
  • Reward vs Risk (RoC) = 2.25
  • Probability OTM (short leg) = 29.42%
  • Profit target = $540 (at $190 support)
  • Exit Conditions:
    • When there is a trend reversal at the support ($190)
    • Break $202 resistance convincingly.
    • Reach 80% of Max Profit (ie. $552)

SPY Short Vertical Call Spread Risk Profile Sept 13-2014

Original Post by Marubozu My Stocks Investing Journey

Continue ReadingSPDR S&P 500 ETF (SPY) : Short Vertical Call Spread

Boeing (BA): Rejected at 200D SMA

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Technical Analysis: 

Rejected at 200D SMA with bearish engulfing candlestick reversal pattern. Expect to move in bearish direction to the next support of $120. Medium term range bound between $120 and $130.

BA Sept1-2014

Fundamental Analysis:

BA Fundamental Sept1-2014Trade Setup

  • Strategy: Short Term Directional Bearish Trade.
  • Target: $120
  • Short Call Spread BA 125/130 Oct 2014 (2 contracts)
  • Max gain @ expiration $536
  • Max loss @ expiration $464
  • B/E @ expiration $127.65
  • Reward vs Risk (RoC) = 1.15
  • Probability OTM (short leg) = 43.69%
  • Profit target = $364 (at $120 support)
  • Exit Conditions:
    • When there is a trend reversal at the support ($120)
    • Break $130 resistance.
    • Reach 80% of Max Profit (ie. $429)

Original Post by Marubozu My Stocks Investing Journey

Continue ReadingBoeing (BA): Rejected at 200D SMA