My previous price target of $631 has been reached, and price bounced a bit more than I thought it might. Which is fine, as that’s where 200 and 50 day moving averages sit, hence market gets excited thinking it found strong support. I believe it’s a temporary support. It will be broken, and I am still expecting $573 price level to be reached. Stock could go lower, to about $540ish, but $573 is a minimum price target.
Once $540-$573 is tested, I am expecting another bounce to about $620-$640ish. If price does go all the way down to $540, I’ll enter long swing trade, which will be risky and short in nature with exit target of $620 (even though stock might bounce back to $640ish).
That $620-$640ish price level (exact price can be refined once we get there) will be great opportunity for me to grab some out-of-money few months out put options, as we will see sub $500 price shortly after.
The reason I think put option play will yield better returns on the next drop instead of now, because on the current ride to $540-$573 price will be fighting multiple moving averages, that act as support. Volatility might not pick up as much and it will take longer time. As opposed to next ride down, which I expect to be quicker and volatile.
This will be fun to watch as it plays out; I guess I am boring, calling this fun.
Once $540-$573 is tested, I am expecting another bounce to about $620-$640ish. If price does go all the way down to $540, I’ll enter long swing trade, which will be risky and short in nature with exit target of $620 (even though stock might bounce back to $640ish).
That $620-$640ish price level (exact price can be refined once we get there) will be great opportunity for me to grab some out-of-money few months out put options, as we will see sub $500 price shortly after.
The reason I think put option play will yield better returns on the next drop instead of now, because on the current ride to $540-$573 price will be fighting multiple moving averages, that act as support. Volatility might not pick up as much and it will take longer time. As opposed to next ride down, which I expect to be quicker and volatile.
This will be fun to watch as it plays out; I guess I am boring, calling this fun.
