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Today we are looking at applying a Bull Call on ASX.

Analysis:

ASX is currently trading at $74.51.

As the chart below describes, the ASX has been trading in an ascending channel since its lows in March. Recently, it came back from reaching the top of the channel. Today has it bouncing from both a key support at roughly $73.30 and the uptrend line.

There is plenty of room back towards the recent peak, and to take advantage of the expected move higher we could look at a Bull Call spread. Today didn’t give the best entry signal, and we could possibly wait for the stochastic to turn and show a more positive sign. Regardless, the Bull Call spread would be able to profit from a move to the recent peak, but also profit from time decay and therefore sideward movement. Considering it is quite a shallow and juvenile trend, this seems wise rather than trading a purely directional position.

If you would like to learn how and when to use this strategy, and other strategies like it, then please contact us here at TradersCircle on 03 8080 5788. Alternately, you can download a free eBook off our website which runs through advanced strategies.