Today we are applying a Bull Call spread on CSL Limited (CSL)
Analysis:
CSL is currently trading at $212.21.
CSL has been trading in a long term and medium term uptrend. Today it came back to the medium uptrend line, and bounced off of it providing bullish entry signals. There is plenty of room to resistance, and the bounce today has good volume.
CSL for a long time now has been a market darling, but recently felt the effects of the whole market selling off. Coming back to trend provides an opportunity to trade bullish with the trend. The Australian Dollar has fallen quite a lot recently which is often a good thing for CSL and may help it continue higher from here.
CSL has a tendency to drift though, so we could experience a good period of little movement and side-wards tracking. A Bull Call spread benefits from time decay though, which protects us from side-wards movement. It also provides the flexibility to wait for the trend to continue and the share price to eventually rise.
