I have a trade setup I’m stalking in Salesforce (CRM, $51.54, off $0.02).
The Fibonacci price cluster of support comes in at the $50.52 – $51.14 area. So far price is holding above this key zone. I’m also seeing a couple of time cycles that are due right here right now that would also support a possible upside reversal in this stock.
So what are we waiting for??? I’m waiting for a trigger. I want to see a price pattern reversal that tells me it’s worth placing a bet against this key zone. If we do see a buy trigger, the potential target on the upside comes in at $60.38 and the risk is defined either below the low end of the price cluster (below 50.52), or below the low made prior to the buy trigger fires off. For more information on “triggers”, please refer to:
A strategy? How about a time-diagonal spread! Buy the Jan (regular Jan, 1/18/14 expiration) 52.50 strike call for $1.90 and sell a Jan (Extended Weekly, expiring 1/3/14) 57 strike call for $0.37. Selling the shorter-dated out of the money call reduces the debit by ~20%, and leaves us long a call outright for the first two full weeks of January.