When to initiate calls?
- A good place to start seems to whenever the short term resistance is broken (when is confirmed). For example, on 7/1, we gapped up and broke the resistance at $407, which was established by the downward cluster. On 7/24, we gapped up again, break apart the downward cluster with resistance at $433.2.
When to sell to close the calls?
- Perhaps a harder questions, especially if you hold longer term options. People tend to hold it longer than necessarily, thinking that eventually it will go up again.
- I like to use as the guide. Consolidation appears to be signaled by > 10% drop on . This appears to be reliable.
Also keep in mind that there is a negative divergence on . Caution advised going forward.