Risky Play For American AirlinesI think we saw a recent spike from American airlines as buyers are finding interest as price hit the top of previous major structure (green arrows) an s&r play.
Notice the spike of the candle where I have a red arrow drawn. To me this looks like an exhaustion candle as buyers got slapped back down. I some what agree with playing the previous structure as an s&r play, but for me it's too much of a risk.
I would need more time to see trend start to develop for a position on american airlines, as we do sit under Resistance.
Premarket is doing good, but I'm not looking at this from an intraday perspective. I say let it develop.
AAL
OPENING: AAL AUGUST 21ST 10 SHORT PUT ... for a 1.02 credit.
Metrics:
Max Profit: $102/contract
Max Loss: $898/contract (assuming stock goes to zero)
Break Even/Cost Basis: 8.98/share
ROC% at Max as a Function of Notional: 11.4%
Notes: High implied at 171%. Looking to wheel this if it doesn't stay above 10 (i.e., acquire shares, cover).