Pending One Triggers Next Order:
Trigger: Buy MA Jun 2 2023 390 Calls @ 0.11
Next: Sell MA Jun 2 2023 390 Calls @ 0.23
Reason for entry: From May 10 – 15, MA was stuck inside the range created on May 10th ($377.65 – $386.76). It broke out and slightly closed above the range on May 17th, followed by a bullish candle on the 18th… only to be taken out the next day by a strong bearish candle on the 19th, bringing price back into the trading range created on on May 10th.
This trading range was discovered by my Double Inside Bar study, and from my backtesting, I have noticed that when double inside bars are created on the 1D timeframe, that area tends to be a significant area of interest. When double inside bars are formed, that area becomes either an area of support or resistance, depending on how price action leaves that area.
When price breaks out of this double inside bar trading range, and holds for at least 2 or 3 days, price will tend to retest this area as either support or resistance.
STRATEGY:
Scan for Double Inside Bar formations
Add Stock to my watchlist
Wait for price to retrace back near or into trading range
And look for a price action trigger (i.e. change in color in the direction of breakout)
For this trade, I am bullish targeting the gap fill which is inside this double inside bar trading range. It is a short term bias so I will be scalping this trade, looking to double my premium and getting out.
Once price breaks back inside the range, I will look to go short when I get a price action trigger such as “red takes out green.”
Because I am playing weekly options, my risk will be the premium that I pay. I’ve entered a limit order to buy MA 390 Calls at $0.11, although it closed at $0.19 on May 26th. With only 4 days left till expiration, I am anticipating that Theta will reduce the premium, and am hoping to get filled $0.11.
