BA FEB24 220/FEB17 225 DIAGONAL CALL
Updated
HIGH BASE SET-UP
Detailed Definition of setup and what market conditions are desirable
Ok, so on January the 13th, BA made a new swing high and it's been trading above the 50-day SMA...really since about November 2nd. So as far as trend analysis goes, BA looks like it has more momentum to the upside in the coming months.
Detailed Definition of the trigger (entry point) used to enter positions
You can say this also has an ascending triangle pattern but I saw this more as a longer than 5 day base with lower or equal volume. I had set an alert for 212.15 using yesterday's high as my trigger. I also wanted to wait until earnings to see the price action. Seems to me as this has a higher probability of it going higher.
Detailed Definition used to determine Stops (abandon or adjust)
No stops will be used. I'm set up for max loss risking under 2% of my portfolio.
Detailed Definition of the methods used to determine targets
Let's take a look at the 4 hour chart. Since about November 10th 2022, it's been poking it's head above it until the price action brought it into the upwards channel I drew. So if it trades in this area until the 17th of this month.. then it should come close to my 225 target. But it may even want to jump up to the other channel above it and push to 230, 235, 240 maybe? That's why I went with a diagonal strategy just incase it does take off more.
How strike prices and expiration dates are selected
If we look at the hour chart I think it may want to slowly trade within this channel to get to 225 by the week of the 17th. Also, this traded in this range of 200ish to 225ish for most of the back half of 2021. So I would think it might want to trade in this area once again. 3 weeks is more than enough time for this trade to unfold.
Position management strategies when the stock goes lower
If the stock goes lower I'll let the combo expire worthless since I'm set up for max loss.
Position management strategies when the stock goes sideways
Again, set up for max loss so if it just stays here, i'll let it expire worthless and move on to the next trade.
Position management strategies when the stock goes higher
This is the outcome I prefer. If this goes straight through 225 and stays above 225 come the 17th, I'll close out the entire combo. That's why I would prefer this pushes up to the higher channel and stays above 225 until the 17th.
Position management strategy at expiration
Come February 17th, if this is trading below 225, I'll let my 225 strike expire and hold on to my 220 strike until the 24th. The week of the 24th I'll monitor this and close out the 220 strike once it gets to my 225 target.
Detailed Definition of setup and what market conditions are desirable
Ok, so on January the 13th, BA made a new swing high and it's been trading above the 50-day SMA...really since about November 2nd. So as far as trend analysis goes, BA looks like it has more momentum to the upside in the coming months.
Detailed Definition of the trigger (entry point) used to enter positions
You can say this also has an ascending triangle pattern but I saw this more as a longer than 5 day base with lower or equal volume. I had set an alert for 212.15 using yesterday's high as my trigger. I also wanted to wait until earnings to see the price action. Seems to me as this has a higher probability of it going higher.
Detailed Definition used to determine Stops (abandon or adjust)
No stops will be used. I'm set up for max loss risking under 2% of my portfolio.
Detailed Definition of the methods used to determine targets
Let's take a look at the 4 hour chart. Since about November 10th 2022, it's been poking it's head above it until the price action brought it into the upwards channel I drew. So if it trades in this area until the 17th of this month.. then it should come close to my 225 target. But it may even want to jump up to the other channel above it and push to 230, 235, 240 maybe? That's why I went with a diagonal strategy just incase it does take off more.
How strike prices and expiration dates are selected
If we look at the hour chart I think it may want to slowly trade within this channel to get to 225 by the week of the 17th. Also, this traded in this range of 200ish to 225ish for most of the back half of 2021. So I would think it might want to trade in this area once again. 3 weeks is more than enough time for this trade to unfold.
Position management strategies when the stock goes lower
If the stock goes lower I'll let the combo expire worthless since I'm set up for max loss.
Position management strategies when the stock goes sideways
Again, set up for max loss so if it just stays here, i'll let it expire worthless and move on to the next trade.
Position management strategies when the stock goes higher
This is the outcome I prefer. If this goes straight through 225 and stays above 225 come the 17th, I'll close out the entire combo. That's why I would prefer this pushes up to the higher channel and stays above 225 until the 17th.
Position management strategy at expiration
Come February 17th, if this is trading below 225, I'll let my 225 strike expire and hold on to my 220 strike until the 24th. The week of the 24th I'll monitor this and close out the 220 strike once it gets to my 225 target.
Trade active
Note
Letting ym 225 strike expire worthless and hanging on to my 220 until next week.Note
closing this out worthless.Trade closed manually
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