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Analysis:

BOQ is currently trading at $7.15

BOQ has been trading in a downtrend but as the chart displays looks to potentially be changing trend. The downtrend line has broken, and we are starting to see higher peaks and troughs.

Today has it breaking the short-term resistance and recent peak to hopefully continue the uptrend.

To trade this, we would need to be mindful of the slow grind higher. It is hard to suggest a strong directional trade. However, we could look at a Bull Call Spread which not only profits from bullish movement but can also profit from sideward movement or time decay.

Here is the setup:

  • Max Risk: $3,250
  • Max Reward $1,750

The payoff matrix below shows pure profit and loss with $7.15 being the current share price. If we see a move higher over the next few weeks back to the next resistance near $7.50, we can look to profit roughly 30 to 40%. Otherwise, if we see a break of the key support at roughly $6.90 we can limit losses to a similar amount. It’s a good idea before entering these types of leveraged positions to know when you are getting out for both a profit and stop loss.

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.