Actvision - Bullish on the minor/intermediate time frame
ATVI: Why I went Long on Calls
* Company has been beat up since a month ago after creating new ATH's at 81.xx
* Basis line on the BB has been breached; 50EMA has been breached; now is currently being supported by an ascending trend line that has propped the stock up on 3 separate weekly occasions (Dec, early April and late April)
* This ascending TL also shares confluence with the 200DMA - the most powerful support
* This is a reversal play and I only play these under extreme conditions in which the price is tapping outside of the lower daily Bollinger bands (7/30 and 8/3) and RSI is reaching below 30
* Price has been rounding out in the past week which was important for me before entering a position as I'd like to see the market's reaction to the conservative guidance issued by the company's most recent ER
With this said, I believe this is a great setup that offers all of the elements that I require before entering a position.
* The risk is defined - my setup is no longer valid if I receive a D2 close below the 200DMA which is roughly about 69.35
* This entry is after the fact of extreme conditions that I'd like to see before trading reversals
* Profit target is a relief back to the .618 fib level which is still below the 50EMA as I do not expect the stock to travel past that in the time frame I am seeking to close this trade out (3-6 weeks)
* I will exit 75% of my calls if momentum looks to be in my favor and price pierces the 50EMA but I will certainly lock in profits at the 74.xx level (.618 fib)
I opened 70C's for 10/21 on Friday, Aug 10, when the underlying share price was 70.72
* Company has been beat up since a month ago after creating new ATH's at 81.xx
* Basis line on the BB has been breached; 50EMA has been breached; now is currently being supported by an ascending trend line that has propped the stock up on 3 separate weekly occasions (Dec, early April and late April)
* This ascending TL also shares confluence with the 200DMA - the most powerful support
* This is a reversal play and I only play these under extreme conditions in which the price is tapping outside of the lower daily Bollinger bands (7/30 and 8/3) and RSI is reaching below 30
* Price has been rounding out in the past week which was important for me before entering a position as I'd like to see the market's reaction to the conservative guidance issued by the company's most recent ER
With this said, I believe this is a great setup that offers all of the elements that I require before entering a position.
* The risk is defined - my setup is no longer valid if I receive a D2 close below the 200DMA which is roughly about 69.35
* This entry is after the fact of extreme conditions that I'd like to see before trading reversals
* Profit target is a relief back to the .618 fib level which is still below the 50EMA as I do not expect the stock to travel past that in the time frame I am seeking to close this trade out (3-6 weeks)
* I will exit 75% of my calls if momentum looks to be in my favor and price pierces the 50EMA but I will certainly lock in profits at the 74.xx level (.618 fib)
I opened 70C's for 10/21 on Friday, Aug 10, when the underlying share price was 70.72