Medium term
/
Buy
Trade view / 16 January 2017 at 13:33 GMT

Technical indicators suggest shorting Eurostoxx50 – #SaxoStrats

Global Head of Listed & OTC Derivatives Sales / Saxo Bank
Denmark
Price target: 3,201.00
Market price: 3,296.52

image
 
Background

So far this year, the Eurostoxx 50 has made two lower highs – on January 9 and 13. 
Stochastics, RSI and MACD are all giving us a selling signal.

We can sell the Eurostoxx50 using EU50.I the Index CFD to play to retracement to 3,197.13 (38.2% of retracement of 2,974.38/3,334.81)

EU50.I
 Source: SaxoTraderGO

Parameters

Entry: Sell 5 EU50.I at 3,296.52 or market.

Stop orders: Buy OCO 5 EU50.I at 3,335 Stop Loss and 5 EU50.I at 3201 Stop Profit.
For peace of mind when you trade based on daily bar chart always place "One Cancel the Other" stop orders (OCO). Therefore, you control your maximum loss and you can capture your maximum profit even if you are not in front of your trading screen.

Target: 3.197,13 (38.2% of retracement of the last bullish wave 2,974.38/3,334.81)

NB: We place the stop loss just above the daily high of January 3 (3,334.81) at 3335.00.
       We place the stop profit just above the target (3,197.13) at 3201.


Gross maximum profit: (3,296.52 - 3201) X 5 time the index = 477.60 euros.
Gross maximum loss: (3,335- 3296.52) X 5 time the index = 192.40 euros.

Overnight funding cost for 5 index = 1.37 euros.

Net Profit = Gross Profit - total overnight funding cost
Net Loss = Gross Loss - total overnight funding cost


Time horizon: 2 weeks.

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more
3y
Georgio Stoev Georgio Stoev
Hey Pat, can you run us through the same strategy using options on Stoxx50 OESX?
3y
Patrice Henault Patrice Henault
Sure ,
Using same fibo retracement you would do long Feb 3300/3200 Put Spread you would pay 33 Euros per options for a max profit of 100 point minus 33 =67 Euros or 670 Euros per options
Your ROI at expiry would be 67/33 X 100 = 203.03%
Your max loss would be limited to 33 Euros or 330 Euros per options
3y
Mekong Mekong
We can't do combination orders on OESX?
3y
Patrice Henault Patrice Henault
Hi Mekong,
we can do combination orders on US Stock Options, ETF Options and cash index options for the moment.
We are working on beeing able to do the same on European markets.
nevertheless a call spread is just 2 legs so we are building them leg per leg. We first buy the At the Money Put because he has the highest delta then we sell the Out of the money Put because he has less delta
3y
Mekong Mekong
Thanks. ..
3y
Morris Morris
Its just to show where Wave analysis meets Fibonacci and are supported by RSI and Stochastics the outcome or results can only be Bon Apetit. Tnx
3y
Patrice Henault Patrice Henault
we have been stop out at 3335 on our short EU50.I

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail