DIS 9 DEC 22 91/ 16 DEC 22 96 Diagonal
BEAR RALLY SET UP:
DIS made a new swing low 11/09 and since then it has made its way back to the 50day with lower or equal volume making this a potential bear rally. The entire market has been in a bear rally, so based on the patterns forming, this should make it's way lower to fill the gaps below.
I used the doji candle on the 28th as my reversal candle at the 50day. And today it trigger because it traded below the previous days candle. Momentum indicators suggests more downside.
I'm set up for max loss on this trade so if this decides to head higher, I'll be ok and move on to the next trade.
I determined 91 would be a safe middle zone target based on the downward channel I drew. And if the market decides to bring this lower....to lets say 84 or 83, that would touch the lower trend line and could bounce back up to 91 to hit the apex of the trade on the 9th.
DIAGONAL SPREAD STRATEGY:
If this falls below my 91 target before Dec 9th, I'll wanna see if this goes down and touches 83 or 84. Lets say it gets there by Monday the 5th. It may want to rebound back to 91. If it does that and gets to 91 by lets say the 8th, I'll close out the entire combo. If this just stays below 91 by the 9th, I'll close out the entire combo as well.
If this goes sideways until about the 8th or the 9th (that would be around the upper trend line which could happen) I'll still have the Dec 16 96 strike. I'll have to watch it the week of expiration to see if I'll wanna close this out a couple days before the 16th.
If this goes higher I'm set up for max loss, so I'll just move on to another trade.
Ideally I wanna see this at 91 or lower by the 8th because I prefer to close the entire combo and move on to another trade.
DIS made a new swing low 11/09 and since then it has made its way back to the 50day with lower or equal volume making this a potential bear rally. The entire market has been in a bear rally, so based on the patterns forming, this should make it's way lower to fill the gaps below.
I used the doji candle on the 28th as my reversal candle at the 50day. And today it trigger because it traded below the previous days candle. Momentum indicators suggests more downside.
I'm set up for max loss on this trade so if this decides to head higher, I'll be ok and move on to the next trade.
I determined 91 would be a safe middle zone target based on the downward channel I drew. And if the market decides to bring this lower....to lets say 84 or 83, that would touch the lower trend line and could bounce back up to 91 to hit the apex of the trade on the 9th.
DIAGONAL SPREAD STRATEGY:
If this falls below my 91 target before Dec 9th, I'll wanna see if this goes down and touches 83 or 84. Lets say it gets there by Monday the 5th. It may want to rebound back to 91. If it does that and gets to 91 by lets say the 8th, I'll close out the entire combo. If this just stays below 91 by the 9th, I'll close out the entire combo as well.
If this goes sideways until about the 8th or the 9th (that would be around the upper trend line which could happen) I'll still have the Dec 16 96 strike. I'll have to watch it the week of expiration to see if I'll wanna close this out a couple days before the 16th.
If this goes higher I'm set up for max loss, so I'll just move on to another trade.
Ideally I wanna see this at 91 or lower by the 8th because I prefer to close the entire combo and move on to another trade.
Trade active
Comment:
Ok, so I doubt my 91 target will get there by Friday. I'll let the 91 strike expire and see if my 96 strike can come in clutch next week.
Comment:
Well after yesterday's action, we're much closer to our target.
Comment:
If this gets to 91 today, I'll close the entire combo out and take profits.
Comment:
If this hangs out in the 91 area by the end of today and I'll hang on to this overnight and close it out tomorrow.
Comment:
Ok so we're at 90. Let's see how much I can squeeze out of this...
Comment:
This might want to go touch 87. That would be my exit point.
Comment:
We opened at 90.02ish. This has an ATR of about 3.45. We could visit 86.57 sometime today.
Trade closed manually:
Im out.