QuantitativeExhaustion

Tight Bollinger Bands, Ready for a POP!

NASDAQ:ASEI   None
1915 views
19
American Science and Engineering (ASEI) is currently in a trading range for the past six week. Notice that volatility is contracting as the Bollinger Bands narrow. In particular, ASEI traded between 65.00 and 66.00 for the past 10 days, which is a very tight range for this volatile stock. ASEI only has a little more than 8 million shares outstanding. Watch these levels along for the next directional signal. If bands tighten up even further, I would expect a very big POP!


Fundamentals/ Financial Calendar

- ASEI Earnings Announcements Monday, February 4
- ASEI is also in the U.S. Defense/Homeland Security stock sector. Which means ASEI will be greatly effected by the debt ceiling and auto spending cuts.


Option Strategy

-very low open interest so limit option buying

Straddle February 66.00 or 65.00 Strikes

or

For more bang for you buck, an option strangle

60.00 / 55.00 (more risk) March Puts (when March options become avail. next week if this trade is still in a tight range)
and
70.00 / 75.00 (more risk) March Calls

Comments

When the Bands get tight on this one, put in a strangle option play. 3/3
+3 Reply
Interested in TradingView offering Option Quotes and Option Calendars?

Please vote https://getsatisfaction.com/tradingview/topics/real_time_option_quote_option_chain_display
+3 Reply
This one is back in the bands. What do you think now?
+2 Reply
Hi Abe

I would wait. If ASEI does pop price action wouldn't be as great as the last volatile move.
+3 Reply
Nailed it!
Reply
rEALLY Like this example. Good for a strangle as you mentioned
Reply