Regional Bank AnalysisThe regional banks didn't bounce and I got stopped out by the blue 50 Week MA. The downward targets are the black 200 Week MA and the pink line or the dashed pink lines where there is a gap you could get a bounce off off.
KRE trade ideas
KRE is BrokenWe had a nice short squeeze past couple days but don't be fooled. Both long term and Short term trends are lower here. Yesterdays, Shooting Star isn't a bullish signal at all. Until Bonds stabilize this sector dead money for longs.
KRE I personally think today's bounce is a short squeezeKRE might bounce here but we did have above average volume today. I wouldn't short here unless we start breaking yesterday's low. XLF didn't see the hire volume. Mixed read here for sure. My opinion, we are on verge of much greater down side.
KRE - Regional BanksTrying to gain some exposure here to banks.
Sold -1 Sep21 $60/66 strangle for $1.67.
Breakevens are at $58.33 & $67.67. I'll look to manage at 50% or deal with any troubles as they come.
Financial TroubleAre financials rolling over? The financial sector ETF XLF, and regional bank ETF KRE are moving back down to their 12 month lows. The cause is likely lower interest rate hike expectations and government yields. Caution ahead for September's weak season.
SPDR S&P Regional Banking ETF (KRE)With considerable bearish divergence on the weekly chart and a fragile daily chart, investors should be wary of a break below the trend line of early 2015 at 58.70. Clearing this area triggers a deep correction towards 54.45 and 51.30. Furthermore, chances of a new primary down trend will grow significantly with such a decline.
Exit-long and/or trading short once 58.70 gives way.
Near term trend: neutral
Long term trend: positive
Outlook: trend reversal or deep correction, negative < 58.70
Strategy: exit-long or trading-short < 58.70
Support: 58.70 / 54.45 / 51.30-
Resistance: 61.35 / 63.75 / 65.05+
Outlook cancelled/neutralized above 61.35
Total assets (apr 2018): USD 4.8 bln
Expense ratio: 0.35%
Dividend yield (indicated): 1.37%
AMEX:KRE
THE WEEK AHEAD: (WHAT THERE IS OF IT) - KRE, GDXJ, EWZ, XOP, VIXWith the shortened holiday week, I'm not expecting much out of the market in terms of volatility, so don't anticipate on putting on anything unless we get some exogenous event pop in the VIX.
However, there are a few that might be worth working possible setups in:
KRE (regional banks), with an implied volatility rank of 60 and an implied volatility of 22.
GDXJ (junior gold miners), uber low rank, but still decent background of 27.
EWZ (Brazil), 39/33.
XOP (oil and gas), 36/33.
I'll post trade ideas in those separately if anything looks potentially fruitful in those.
With VIX trundling along here at sub-12 levels, broad market looks subdued from a volatility standpoint, something that's likely to remain in place as the Senate end of tax reform is can kicked to after the Thanksgiving holiday recess ... .
58% probability trade on KRE (Strangle)Neutral trade on KRE to try and take advantage of what I think it would be two sided action between buyers and sellers. With a Implied Volatility Rank of 33, is still decent to sell a Strangle (53/57).
We make money as long as the price stays between 58.77 and 51.23 in the next 49 days, so we have a buffer of around 7% up or down. This gives us a probability of profit of 58% at expiration, and 77% if we manage early (which is always the plan).
The trade:
Sell AUG18 53 PUT
Sell AUG18 57 CALL
Sold it for $1.75 per contract
KRE LongIn 2017-04-17 KRE had a bullish engulfing candle in support 51.5, unfortunately the next day didn´t had a confirmation. Now we see a gap breaking resistance 52.80. We can wait for a pullback to 52.85 to enter long.
KL: 52.85
SL: 41.45
TP1: 55.70
TP2: 57.2
Iron Condor on KREEntered an Iron Condor in KRE (Regional Bank ETF) on June 26th to try to strangle the price between 50.00 and 56.00 for 71 cents in credit. Break even in the trade is below 49.29 and on the high side above 56.71. Two days after the trade the Fed came out passing all banks that were involved in stress tests giving them a green light to add to dividends and start buy backs. The news gaped KRE up very close to the sold call side and has fallen since into a more comfortable range. Plenty of time for this Option to play out and I will be looking to take 50% ($0.355) of the Premium as soon as possible. Original assumption was neutral, now neutral with a co-mingling of bearishness.
No risk to the upside 80% on KRE (Jade Lizard)In the last 90 days we had a 14% down move and got rejected at the 200 EMA. We might still have more room to go to the downside, but I am betting that we are still correcting and some buyers may start to come in.
With an implied volatility rank of 34 and 50 days to expiration, I sold a Jade lizard to eliminate the risk to the upside and still have room to the downside until my break even. We collected $1.12 per contract and have 81% probability of profit, our break even is at the $47.90 level.
The trade:
50DTE
Sell the 52 Call
Buy the 53 Call
Sell the 49 Put
Prob of profit 81%
Credit Received $1.12 per contract
KRE set at a sweet fib zone areaRegional Banks have potential for a nice pop at this level. Sure looking like banks about to catch a decent bid.
Neutral trade on KRE (25 delta Strangle)KRE is a regional bank ETF, after a strong impulsive bull run, it looks like KRE is starting a correction. With a IV rank of 34 is at least decent volatility to try a neutral trade. I sold the 50/56 Strangle (25 delta) and collected $1.33 per contract.
With 64% probability of profit at expiration we need the price to stay between $57.34 and $48.67 which is a little over the expected move of 39 days.
