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Today we are looking at applying a Bull Put Spread on Oil Search Ltd

Analysis:

OSH is currently trading at $3.78

OSH has been trading in a sideward pattern since roughly mid-November last year. The bottom of the range is at roughly $3.60 to $3.70. Recently, OSH returned to the support and the last few days has shown that it wants to hold it. Additionally, the short term indicates point to it being oversold.

Oil has rallied strongly since the covid crash, with it surpassing its levels pre-crash. The oil sectors have been performing well in U.S markets and so OSH has plenty of catching up to do. Couple with the bounce from the support, we expect OSH to either rise from here or at least track sideward.

To trade this we can look at a Bull Put, where we place all the risk below the $3.60 support. This allows the support to defend the trade. Provided the share price remains above that level come expiry (perhaps July or August) then maximum profit is made. If OSH does rally back to the recent peak at roughly $4.30 then we can look to take profits early. Ultimately this means if we see sideward or bullish movement, profit is made.

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 some free resources off our website which run through advanced strategies.