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| XLE Daily |
XLE looked bullish enough this morning to go long. Got a XLE Sep 75 Call for 3.05.
Here's what I see:
- Bounce off the 61.8% Fibonacci level
- Bounce off Support/Resistance level around 65.50
- Positive Stochastics Divergence
- Bounce off 200sma
- Trend Line Breakout
- Close over the 8ema
Set the Target to the 50sma at about 78.50. This will need adjustment as the 50sma is slowly descending.
Set the Stop to just under the 65.48 swing low at 65.36.
I'll look at the risk/reward in terms of the stock rather than the complicated theoretical estimate of the option:
Risk: 70.36 - 65.36 = 5.00
Reward: 78.50 - 70.36 = 8.14
R:R = 8.14/5 = 1.628:1 Not very good but its a rough estimate and fixed maximum loss.
Nice write up, I’m in a long swing since last week when it bounced off the 200, however my exp is 8/19 and I’m up 41% unrealized so far.
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