![]() The trader could have exited at this time with about $100 of profits. On Thursday morning or Oct 12, META went up to $329: If META drops to zero, we still keep our credit of $13.50. The disadvantage of this trade is that if we are wrong in our direction and META goes down instead, we don’t lose any money. ![]() That is why if we see Meta going past $330, we must start considering exiting the trade. The drawback with this trade is that the graph does appear scary with unlimited loss if META goes to the moon. The best scenario is if META goes up to $330 but not beyond it. This is a short-term trade with only four days till expiration. In that case, the trader might use a call ratio spread with the short calls at $330: Suppose the trader thesis is that Meta will go up, but it would not likely go above $330, with $325 being its 52-week high. Previously, on Sept 27, a pin bar candle indicated that the price below $295 was being rejected.Īs added confirmation, we have positive momentum on the momentum indicator:įor some traders, this is good enough to put on a directional play for the upside move in Meta. On Oct 6, Meta closed with a bullish green breakout candle. Now, we have to decide which direction we think META is going. However, many traders would like to get into position before the squeeze is fired to capture the move’s full potential. This means that the stock is building up energy and is about to be released (which will be indicated by the red dots turning green). It is in a “squeeze,” as indicated by the red dots of the “TTM Squeeze” indicator, which we had previously discussed. We will be using the free built-in TTM Squeeze indicator on .Įarly October 2023, Meta is moving in a side range consolidation. ![]() In today’s example, we are looking at a squeeze trade on META.
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