Trade view /
26 May 2015 at 22:56 GMT
Despite its overall uptrend and structurally improving fundamentals, shares of US home improvement retailer Home Depot failed to move further to the upside as investors looked to book profits.
While the short-term resistance of $114.60 was confirmed on May 19, we are still looking to test the low levels of $107. With declining MACD and STO, we can take a more aggressive approach here and set up a long put strategy.
Source: Saxo Bank. Create your own charts with Saxo Trader; click here to learn more
Management and risk description
Assuming 1% trade risk on $100,000 portfolio, traders can buy up to $1000 worth of contracts.
Buy: 1 July 15 120 Put for $9.80
Maximum gain – unlimited
Maximum loss – $9.80 or $980
Entry: enter today at a limit of $9.80
Stop: set a stop of 50% of premium paid or $4.90
Target: price target of $107 or ROI of 50%
Time horizon: short
— Edited by Gayle Bryant