Daniel.B
Short

No love from the street, Short $UAL

NYSE:UAL   UNITED CONTL HLDGS INC
119 3 4
I'm entering short UAL             due to the lack of "love" on earnings day. Which saw price climb to resistance at the $60.00 area, only to be swiftly sold off by sellers entering the market once again. The next day saw intra-day trading attempt another test of resistance, only to once again fail. Volume supports the movement, in other words sell side volume is greater than bid volume .

I've marked down on the chart the areas where price has been rejected by the overall descending trend line . Also marked is the counter trend line price action has been following for the month of July. If you go up to the weekly chart you will see a Weekly pinbar rejection of the horizontal / descending resistance.
snapshot

The Position:
  • Long AUG15 50 Puts

The Trade:
  • Exiting at a loss if we get a daily close above $61.00 (Marked by red horizontal trend line )
  • Exiting in profit if price makes its way down to the $50.00 area
  • Roughly 1:4.5 R/R Options Trade

Enjoy your weekend, see you all on Monday! Cheers =)

Update: Short Entered Long AUG15 50STK Puts, Good Luck
Thats a top quality pick, will probably add to portfolio.

Thanks
+1 Reply
Daniel.B Tom_Killick
Thanks Tom appreciate the comment! =D
Reply
Another good example of a range that you can trade. Of course it's easy to spot in hindsight after its happened, the key is identifying a "potential" range and limiting your risk, and entering a disciplined trade.
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