Today we are looking at applying a Bull Call Spread on Woodside Petroleum Limited (WPL)
Analysis:
WPL is currently trading at $25.18
As the chart below shows, WPL has been trading in an uptrend since its lows at the start of November last year. Recently it came back with the market pull back to return to both the uptrend line, and a key level of support at roughly $23.60. Today shows bullish entry signals with the break of the pennant pattern. The stochastic also highlight the stock is oversold in the short term.
A Bull Call spread will profit from a bullish move, but it will also profit from sidewards movement as well. Therefore, we can enter the trade today, and not worry too much about timing as we have the flexibility to wait for the move. Because our position is leveraged, we can good profits with a move back towards resistance at roughly $27.50.
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.