Today we are looking at applying a Bull Call on Macquarie Group Ltd (MQG)
Analysis:
MQG is currently trading at $152.92.
MQG has been trading in a solid uptrend since the pandemic crash last year in March. Recently it pulled back from its highs, creating another higher peak and counter trend line. It stalled at a key support at roughly $148, which is also where the uptrend line and 100 day MA comes in. In addition, the stochastics are also pointing up and coming out from the oversold area. Finally, there is plenty of room to the next key resistance at the recent highs of roughly $162.
Today we suggested to our clients to trade a Bull Call spread on MQG. We suggested a Bull Call spread because with the way we set the strikes we can profit from both bullish movement and time decay. Though we don’t expect MQG to track sideward for too long given the bullish signals, we hedged for time considering how often MQG can drift, whilst still profiting well from a bullish move. Indeed, we expect to start taking profits at around $157. Alternately, you could hold the position with the expectation of an eventual move back to $162 resistance and go for greater profits. Even if it takes time to get there, time is profitable for the position at these levels or higher.
We like this strategy because it provides far great flexibility than simply purchasing stock or buying a Call option.
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 which runs through advanced strategies.