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.
- 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)
Original Post by Marubozu My Stocks Investing Journey