Swing calls - High volume on 20May 125 strike
> Earnings on BABA are 25 May
> Over 15k call volume at 125 strike, 20May expiry
> Stochastic %K buy alert (yellow oval)
> RSI needs to move back over 50 w/n 2 days
> Downtrend line from 5Apr not yet broken over
While there is a gap below, the circle shows a bullish island reversal. I am willing to buy swing calls now and exit if stock falls below 101, 100. Price can move back up to white zone before earnings (110-120). Daily 20sma is upward for now and since stochastic %K is at a bottom after producing a buy alert, this is a low-risk place to buy swing calls.
The weekly chart shows possibility for a reversal. A long bullish engulfing candle was followed by higher price and three weeks of consolidation near the highs. I am looking for this week to make a higher close.
On 30min chart, you can see three waves down in price action and in %D stochastic after 5 Apr. There is bullish divergence in RSI and stochastic. To confirm and make charts more bullish, price first has to hold over 104.
I bought 22Apr 110 calls to close this week.
I will buy 20May 120 calls to sell before earnings.
> Over 15k call volume at 125 strike, 20May expiry
> Stochastic %K buy alert (yellow oval)
> RSI needs to move back over 50 w/n 2 days
> Downtrend line from 5Apr not yet broken over
While there is a gap below, the circle shows a bullish island reversal. I am willing to buy swing calls now and exit if stock falls below 101, 100. Price can move back up to white zone before earnings (110-120). Daily 20sma is upward for now and since stochastic %K is at a bottom after producing a buy alert, this is a low-risk place to buy swing calls.
The weekly chart shows possibility for a reversal. A long bullish engulfing candle was followed by higher price and three weeks of consolidation near the highs. I am looking for this week to make a higher close.
On 30min chart, you can see three waves down in price action and in %D stochastic after 5 Apr. There is bullish divergence in RSI and stochastic. To confirm and make charts more bullish, price first has to hold over 104.
I bought 22Apr 110 calls to close this week.
I will buy 20May 120 calls to sell before earnings.
Trade closed manually
I did not have enough confirmation to buy 20May options so instead I added a weekly 104 call. I sold both positions when price was over 103.60 based on 5 and 30min charts. Price did break over the downtrend line on 30min chart, but there was MA resistance overhead. My main reason for turning this into a day trade is that I saw over 2,000 shares at 104.00 on the sell side (level 2 quotes). Sure enough, price made a quick push to 103.80 and started selling down thereafter.Near the end of the day I opened a new swing call. BABA was holding up well compared to other stocks and I still like the trade idea.
Note
BABA stayed over 101 and looks to be opening near that 30min downtrend line. Opening hour should indicate whether to buy/hold calls or to let this trade idea go for now.Note
bad price action for calls - sold for loss.
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