Today we are considering applying a Bull Call Spread on Treasury Wine Estates Ltd
Analysis:
TWE is currently trading at $16.61
TWE has fallen roughly 15% since early December from its highs of roughly $19. The fall seemed rather over the top, and recently petered out before stalling at both the local support and the longer-term uptrend line. It certainly seems oversold in the short term with technical indicators pointing towards a change in direction. The strong bullish today shows keen buying power coming back into the stock, with a break of the short-term downtrend line.
There is plenty of room to move back towards its highs. With a strong technical entry signal today and the good fundamentals of the company we should see it higher in the short to medium term.
We would look to trade a Bull Call spread where we can profit from both bullish and sidewards movement. This means we can make money from the rise, but have the flexibility to wait for the move.
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.