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

Technical indicators suggest shorting Eurostoxx50 – #SaxoStrats

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


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)

 Source: SaxoTraderGO


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
Georgio Stoev Georgio Stoev
Hey Pat, can you run us through the same strategy using options on Stoxx50 OESX?
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
Mekong Mekong
We can't do combination orders on OESX?
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
Mekong Mekong
Thanks. ..
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
Patrice Henault Patrice Henault
we have been stop out at 3335 on our short EU50.I


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