XME is the metal and miners ETF. See reference info here .
It is Not Yet bullish, nor rallying, But appears to need to close above 27.50 for the week for it to properly attempt a technical bullish rally...
... for a .94 credit.
Notes: Selling a delta neutral short strangle in the first expiry in which the at-the-money short straddle is paying greater than 10% of the underlying. Given the smallness of the instrument, will do additive adjustments if necessary to delta under hedge.
Weekly Chart :
The XME is in a Down Trend for almost 2 years.
Two important Technical keys:
1. The Down Trendline
2. The Support are of 24.25-25.43
Daily Chart :
The price getting squeezed between the trendline and the support area -
Some residual IV here from recent earnings of holdings in the ETF.
-1 Sep21 35/37 strangle for $1.72 cr.
Risk: 2x cr received or continue to roll put
Profit: 50% cr rec or if IV drops with too much time left to hold risk.
XME should see pretty strong upward bias in the next 40-60 days and should make it to the 40-45 region. I will be taking position on any pullback which may materialize in the next few days.
As additional proof
1. We bottomed at a good fib support, and then made a nice bottoming formation of bottoming exactly at the next support level (as in "Automatic supports"...