It seems that both KSS and GS have set up for a potential short term trade on Monday, as long as they both make a new high after the first hour of trading.
GS is a little expensive, and I will probably virtual trade it. The stock is trading at 209.98 and has crossed its 200dma, and could make a six month high of 230. The GS OCT 200 Call has an Ask of 14.00, with a potential stop loss at 11.00 (-21%). The potential sell stop is 31.00, or a gain of 121%.
++++ update ++++
I ended up virtually trading the GS OCT 210 Call at 9.40, with a stop loss at 7.50 and a target of 21. Unfortunately I got taken out of the trade by a long spike at the bottom of the candle the next day. That is a good lesson not to chase the option because of movement in the first hour!
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KSS is more reasonably priced, with the stock trading very near to the 60 strike price at 60.27. It has crossed the 50 dma and heading towards the next resistance level of the 200dma at 69.20. The KSS OCT 60 Call is asking 2.60, with a stop loss at 2.40 (potential -7.6% loss). The sell stop is 9.50, or a 265% gain!. If the first hour goes well, I will trade on this one.
++++ update ++++
NB - As Sally pointed out in her comment, I miscalculated the Stop Loss on KSS -- It should be 1.60 (or a 38% loss potential). Its too steep! - so please pass on this trade if you have not done so already. Thanks Sally!
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2 comments:
Hey! Nice start to your blog. I also have KSS on my wait-list, but how did you get Stop Loss = 2.40 ? My calculations, if not wrong, used SL = $1 below 50dma = $59.71 - $1 = $58.71. So, SL on option = 1.60 and that gives a 33% risk. I am not that brave. Sally
Sally - quite right. I must have slipped on the options calculator. The Stop Loss should be 1.60 making a 38% loss. Best to pass!
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