Today we are looking at applying a Bull Call on Commonwealth Bank of Australia (CBA).
Analysis:
CBA is currently trading at $101.60
CBA is trading in a longer-term uptrend. Recently, it pulled back from its highs and tracked sideward to meet the uptrend line. It then bounced but wasn’t able to move through the key resistance at roughly $100.5. Yesterday it pushed through the resistance and today has it holding that resistance as support. CBA reports on the 11th, and can often run into its report.
You could trade a Bull Call spread where profit is made with a rally back towards the $104 level. If the $100 is broken, consider stop lossing out of the trade. You can also set it up where time decay is in your favour, so you can profit from a slow drift higher or even sideward movement. With an August expiry you will feel the effects of time decay more than if you did September. Consider closing before the report on the 11th.
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 access some free resources off our website which runs through advanced strategies.