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Today we are looking at applying a Bull Call Spread on Santos Ltd (STO)

Analysis:

STO is currently trading at $7.16.

As the chart below shows, STO has been trading in an uptrend since its lows in October last year. The push up is largely thanks to a strong run in oil prices as economies and industries reopen. Recently, it tracked sideward as the market digested its earnings report, and came to hit the uptrend line. Today, STO bounced from the uptrend line and a level of support, breaking the pennant triangle pattern.

In this situation, we can look to implement a Bull Call spread where we not only profit from a move higher, but also profit slowly from time decay. This means if STO stalls at the current resistance or continues to track sideward along the uptrend line, the trade will continue to profit and the amount of bullish movement needed will be less.

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.