MDT has a fresh down move that was supported at $72.30. The area of support encompasses previous price action the weekly 200sma. Currently, prices have made the first leg of a 2 leg retracement with a 2nd leg in the $77-$78 price level.
The concern with this trade is the bounce off 200sma and previous support may drive prices beyond the $79.50 level of bull/bear battle. In addition, the downside is limited to the previous support.
However, there is still a solid area for a continuation move down and price action if medical continues to weaken as a sector.
Buy Jul17 Puts @ $4.1 and $3.6.
Good Hunting!
The concern with this trade is the bounce off 200sma and previous support may drive prices beyond the $79.50 level of bull/bear battle. In addition, the downside is limited to the previous support.
However, there is still a solid area for a continuation move down and price action if medical continues to weaken as a sector.
Buy Jul17 Puts @ $4.1 and $3.6.
Good Hunting!
Comment:
Updating prices based on the current delta and option price. Our new option price range is Jun17 @ $3.6 and $3.05. I noted I had a mistype in the initial trade idea. There are no July options for MDT. Looking for an initial sell and first profit target in the $74 area of previous support/resistance.
Trade closed: stop reached:
Prices trekked up higher, with increasing RSI strength prior to earnings. The 2nd leg up was a strong spike and channel on the daily chart and continued higher through the channel. Earnings were positive and prices spike to $80.98. Prices may be vacuumed to the daily 200sma. I wanted to close and reevaluate the price action after earnings.
Comment:
I had entered at $77 price level @ $3.6. Exited today @ $1.72.