Welcome back everyone. 1
This is 7th of May in the previous lecture. 2
We have analyzed the chart of apple incorporation. 3
The stock is moving in this channel on daily chart. 4
See this was the upper line of the channel. 5
So near the upper line of this channel near this blue line there was a shooting star candle and 6
the shooting star candle near a resistance level is the signal to go short. 7
So the next candle was the red candle. 8
That's why my view was bearish about the stock. 9
and I was bearish about the move up to this black line. 10
up to this Fibonacci cluster so prices are trading very near to this black line on daily chart. 11
There was also a negative divergence in the stock. 12
See here RSI is going in downward direction but these two peaks were going in upward direction and 13
near this blue line. 14
There was a shooting star candle so it was a bearish signal 15
and also on hourly chart we were getting a negative divergence. 16
That's why my view was bearish about the stock. 17
So I bought the put option of Apple incorporation because I was bearish about the move and currently prices 18
are trading near this black line and near this Fibonacci cluster 19
I bought the put option of Apple incorporation of strike 210. 20
and if we see the current price of 210 put option of Apple incorporation 21
see the expiration date is 31st of May and 200 strike is trading at nine point twenty dollar. 22
So when we bought this put option it was trading at four point ten dollar and now it is trading at nine 23
point twenty dollar. 24
So it is more than 100 percent profit in just four days. 25
If we draw the trend line for this down move see this is the trend line on hourly chart. 26
This is the trend line for the move 27
and currently if we draw the parallel channel 28
currently prices are very near to this support line. 29
Therefore I'm expecting a bounce in the prices and I'm closing my trade here. 30
So in this trade our buying price was four point ten dollars. 31
and now we will sell the put option. 32
So we will see the bid price. 33
It is trading at nine point zero five dollar. 34
So in this trade our profit is five point zero five dollar per share and the lot size is hundred. 35
So our net profit is five hundred five dollar and this is the profit in just five days more than hundred 36
percent return 37
So it's not necessary that we should buy the put option only in downtrend. 38
We can also buy the put option when prices are trading near the upper resistance line of the channel 39
if prices are moving in a channel and there was a shooting star candle that was the reversal candle on 40
daily chart and we were getting negative divergence on daily chart and on hourly chart you were getting a 41
negative divergence on both the charts. 42
That's why my view was bearish about the move and I bought the put option of Apple incorporation because 43
I was expecting a down move in the prices.