$QQQ swing calls - Green Heikin Ashi with Bullish Divergence
Updated
In the larger context, I see indications of a market rally next week. I do not have one reason but rather it is how I piece together the puzzle pieces of weekly/daily charts, systemic liquidity changes, and more.
Yesterday's long green candle created a Heikin Ashi doji and today turns into the first green candle even though price has sold down since open. Assuming this candle stays green today - Heikin Ashi green - I like the probability of price moving higher on Monday. The daily 20sma is ~274.80, though I think QQQ will easily fill the gap over 278.
There is bullish divergence on RSI daily and weekly RSI looks like it will close over 35 (or 34). This would also create bullish divergence on the weekly. Further, directional selling volume is exremely elevated and price should rise higher for at least a few days (though I think longer).
Yesterday's long green candle created a Heikin Ashi doji and today turns into the first green candle even though price has sold down since open. Assuming this candle stays green today - Heikin Ashi green - I like the probability of price moving higher on Monday. The daily 20sma is ~274.80, though I think QQQ will easily fill the gap over 278.
There is bullish divergence on RSI daily and weekly RSI looks like it will close over 35 (or 34). This would also create bullish divergence on the weekly. Further, directional selling volume is exremely elevated and price should rise higher for at least a few days (though I think longer).
Trade closed manually
On Friday I bought 
QQQ swing call 10/19 268C 1@ 2.12By Friday close this contract was valued at 1.23. I did not set a stop loss for this trade because I believed the afternoon selling was controlled option-related activity.
***Sold this contract during the 9:40am candle (5m) for $4.40
Since this contract has already lost time value over the weekend, I do not want to hold into the afternoon, or through a pullback before further price increase. IV is generally higher near Monday open so I wanted to take advantage of the initial price move.
The value of buying fewer contracts is that, when you have high confidence in your trade design, you can allow your position value to fluctuate during the time you intend to hold your trade. You must know your holding time - when you design a trade, consider how long you will wait for price to make your desired move. Key here is that you have high confidence in your setup - without that your doubts and emotions will take over and you will mismanage open positions.
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