Today we are applying a Bear Put on AGL Energy Limited (AGL) which has out of a pennant pattern today.
Analysis:
AMP is currently trading at $1.84.
AMP is trading in a long-term downtrend. Recently it came back to the downtrend line and a key level of resistance at roughly $1.90. It had a notch down today, attempting to break the short-term uptrend line. You can see the stochastic (red and blue lines at the bottom) are at the top of the range and crossing over. This indicates the stock is overbought in the short term and the cross over indicates a change in direction. The dark blue line is the 100 Day Moving Average which also can act as a resistance line. These indicators give the impression AMP is likely to head lower.
We could look to trade a Bear Put spread which will help us take advantage of not only bearish movement, but also sidewards movement. AMP tends to go sidewards before continuing lower, so with the Bear Put spread we can take advantage of that and have the flexibility to wait for the move.
