We recently shared posts on the nature of Bollinger Bands, Bollinger Band Snaps, and OOPS Patterns.
TSLA
looks to be setting up for a possible move lower based on those technical indicators.
On both July 2nd and July 6th, we have seen gaps to the upside, OOPS Patterns. Both days, the open of the bar was higher than the previous day's high. We have yet to retrace lower to close that gap. All of the price activity for the past two days have traded completely above the previous day's high.
Also on July 2nd and July 6th, all trading activity has occurred above the 2 standard deviation Bollinger Band, a Bollinger Band Snap. Price does not generally trade above the Bollinger Bands for long, indicating a possible price pull back to inside the Bollinger Bands.
These two indicators combined, add to the weight of a possible pullback on TSLA.
You can choose to enter short now based on the Bollinger Band Snap or you can choose to place a sell stop order at the July 2nd high to enter based on the OOPS Pattern rules. If you are entering with an options trade, it's encouraged to allow plenty of time until expiration to reduce the rate of time value decay on the position and also allow time for TSLA to move in favor of your position.
TSLA
looks to be setting up for a possible move lower based on those technical indicators. On both July 2nd and July 6th, we have seen gaps to the upside, OOPS Patterns. Both days, the open of the bar was higher than the previous day's high. We have yet to retrace lower to close that gap. All of the price activity for the past two days have traded completely above the previous day's high.
Also on July 2nd and July 6th, all trading activity has occurred above the 2 standard deviation Bollinger Band, a Bollinger Band Snap. Price does not generally trade above the Bollinger Bands for long, indicating a possible price pull back to inside the Bollinger Bands.
These two indicators combined, add to the weight of a possible pullback on TSLA.
You can choose to enter short now based on the Bollinger Band Snap or you can choose to place a sell stop order at the July 2nd high to enter based on the OOPS Pattern rules. If you are entering with an options trade, it's encouraged to allow plenty of time until expiration to reduce the rate of time value decay on the position and also allow time for TSLA to move in favor of your position.
Trade closed manually:
TSLA created another OOPS pattern to the upside, today's open was higher than yesterday's high. Once we retraced to 1377.79, yesterday's high, that triggered an entry based on the OOPS pattern rules. Price has currently fallen to 1336.71, 41.08 points lower from the entry! Nice follow through on the OOPS pattern entry!!!
If instead you entered yesterday based on the Bollinger Band Snap, that was still a great entry! TSLA was trading around 1360. Price has moved lower today about 23 points. On a .50 delta that's about $11.50 of profit per share on 1 put options contract!
Even though the TSLA position is closed, TSLA is still trading above the upper Bollinger Bands. Also, today's price action has the conditions available to close as a Bearish Divergent Bar (High that higher than the prior bar's high and closes in the lower half of the bar). Possibly indicating another opportunity to go short.
I would rather take a quick profit and look for a re-entry opportunity than continue to hold the position and hope for an additional profit.
*A good way to lose money is to wait for a bigger profit.*
If instead you entered yesterday based on the Bollinger Band Snap, that was still a great entry! TSLA was trading around 1360. Price has moved lower today about 23 points. On a .50 delta that's about $11.50 of profit per share on 1 put options contract!
Even though the TSLA position is closed, TSLA is still trading above the upper Bollinger Bands. Also, today's price action has the conditions available to close as a Bearish Divergent Bar (High that higher than the prior bar's high and closes in the lower half of the bar). Possibly indicating another opportunity to go short.
I would rather take a quick profit and look for a re-entry opportunity than continue to hold the position and hope for an additional profit.
*A good way to lose money is to wait for a bigger profit.*
