Target hit! Not just hit, but surgically taken out. Our target was 528. Today's high was 529. Close enough for government work :) We targeted that exit like Seal Team 6!
I think this chart can go much higher, but don't want to be a pig. This target was such an obvious level of potential resistance, its quite likely we'll get a pull back from here. If we do, we'll possibly get a better entry because its lower.
Also, we pierced the Inverted Head & Shoulders today. Its common to go back down and retest the neckline. In fact, its a better set up if we do, as opposed to just HODLing.
Notice we added the Head & Shoulders projected break out price move in light blue today. We can add it because now we know where we broke out. The projected target is about 550. But I've noticed Head & Shoulders often only make about half their measured move. That's marked with a thin light blue horizontal line at about 534 1/2. Also, near there is a downward Trend Line and the Green 50% Fib of the recent swing down, which oddly is equal to the previous swing up. The Green 50% Fib is 533.
Today's 528 target is pretty close to the 533, 534 1/2 targets. Not worth holding the position for the small incremental gain. Better to take our profits and eliminate our risk, then look for a pull back and find a bottom with a good risk/reward set up.
Sold the July 5.20 Call option for 17 points when the futures contract hit 528. We originally bought the option for 13 7/8 on 5/20/20. Hmm, nice symmetry :)
So the profits are: 17 - 13 7/8 = 3 1/8 * $50/pt = $156.25. This seems like a bit of a disappointment compared to the 6-7 point estimate in the first post in this thread. There must have been significant Implied Volatility loss as well as the Theta decay. The other side of the coin is we dramatically reduced our risk by using an option vs the futures.
If we really want to sabotage our happiness, let's calculate the profits if we had used the futures:
528-514=14*$50=$700. Ouch! Oh well, its still a win, which is always welcome.
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