Watchlist: Ascending Triangles
Here's a few ascending triangles forming to keep in view. Do wait for confirmation of breakout, i.e a break above the horizontal trendline before entering. Depending on when the breakout occurs, I will be looking at current month or next month option. As always, I'm looking for ITM options, with time value component not costing > 30% of option premium.
Eg. 50 strike call cost $2.0
Stock trading at $51.5
Intrinsic value = 51.5-50 =$1.5
Time value =option price - intrinsic value = $2-$1.5 =$0.5
=> time value is 25% of option price (0.5/2.0)
WMT and CENX have already broken out of ascending triangle recently. Wait for pullback for entry
Eg. 50 strike call cost $2.0
Stock trading at $51.5
Intrinsic value = 51.5-50 =$1.5
Time value =option price - intrinsic value = $2-$1.5 =$0.5
=> time value is 25% of option price (0.5/2.0)
WMT and CENX have already broken out of ascending triangle recently. Wait for pullback for entry
posted by Simply Options Trader at 11:41 AM PERMALINK
8 Comments:
Hi,
i had pretty good results trading ascending triangle and wedgest before. What I find is that a breakout with large volume usually will be a successful one. So need to look out for volume.
So, how do you scan for such stocks? BTW, I signed up for stockfetcher and i love it!
Hi omdm,
You are right. High volume breakout are higher probability setups than not.
Glad you love SF!I'm using the free beta version now, even better! Are you using the subscribed version? I'm using the "patterns" under "more screen" to scan for ascending triangles. But I do alter the criteria for volume and stock price though
Wonderful charts! Thanks for sharing.
AJ.
I am using the paid version, the cheaper one. I use it to scan for some candlestick patterns with a little customization. I am planning to share them on my blog soon.... and probably including the stockfetcher code... hope it will interest you.
OMDM
That is cool! I will definitely drop by every now and then.Look forward to your sharing.
p/s: Btw, with the paid version, I'm pretty sure you can scan for patterns like ascending triangles.
Hi,
What a great blog you have here! I have started adding option trades on MY blog and thought you might be interested. Maybe. Maybe not. Anyway, keep up the great work!
Mike
http://stockmonster.blogspot.com/
Thanks Mike! Glad to see more options bloggers out there. I will check out your blog.
hi Pete,
No prob, thanks for the add. And I have also announced to my readers about your open house. Hope you'll have lotsa visitors!
Post a Comment
<< Home