Originally and before both the June FOMC rate decision and
Brexit I was holding a bullish bias for PLCN
and I was in hope for a exit out of the Call side of a Strangle from/if a follow
through move (with legs) above the 1385s
resistance. PCLN did breach above 1385 on Thursday the day before Brexit but
unfortunately the move occurred on very low volume and was also very short-lived,
which then forced me to hold through the Brexit vote.
Then on Monday (June 27th) PCLN had continual bearish follow through from Friday so I started
to look at potential supports to exit out of the Put side for a profitable Strangle
rather than the Call side. The first key support I saw was at the bottom of a
low volume area (LVA) at 1161s/60s.
Thankfully the 1161s/60s
target was reached which allowed me to exit the Strangle with a decent (not
huge) profit after an almost full 250 point reversal.
Now I am taking note to the fact that although PCLN is currently trading a little more
than 100 points above Monday’s low PCLN
in not in the same type rally mode as the overall market, and is also losing energy
at about the middle of a 100 point range between 1303 & 1203. This has me eyeing another (new)
Strangle entry if PCLN now trades sideways for the rest of the week between 1285 & 1240. If so I plan to engage today/tomorrow with a September or
October expiration.
Once/if engaged in the new Strangle I will then be looking
for either a move above 1303s
once/if first breaching above 1291
or a move below 1203s once/if first below
1228s.
Ethan Premock Futures & Options Strategist at Hamzei
Analytics, LLC