I’ll keep today’s trading idea quick … in case anyone is nursing a Super Bowl hangover.
I found a great candlestick setup indicating a trend change …
And the idea is backed by our own Power Income guru (and Tampa resident) Bill Griffo.
The play is in SPDR Gold Trust (Ticker: GLD) …
I see a hammer candlestick with confirmation set up in the GLD chart. Check it out below.
A Little About Hammers
Remember, a hammer is formed at the bottom of a down trend and signals the possibility of a change in trend.
A hammer has a long lower shadow, trading lower during the interval … but comes back (buyers enter and prevail) with a small upper body (closing above the opening price) and little or no upper shadow.
We also received confirmation of GLD trading higher by Friday’s candlestick gapping and opening higher than Thursday’s hammer candle.
Looking at the Feb19 calls, I like buying the 170 calls with an implied volatility of 14.32 and selling the 175 calls with a higher implied vol of 15.68.
That is buying the Feb19 170/175 call spread paying $1.35. I would take my losses if this spread trades down to $.85.
I also still like my Mar19 SLV 23.5/25 call spread which is up 48%. I will sell it at $1.00.
Enjoy your day!
Thanks for Reading … See You Next Tuesday!