Post-Mortem July 3 XOM call. (Roy - input appreciated)
My reasoning behind this trade:
- Daily chart - long term uptrend, with recent pullback. I expect it to continue moving up over the medium and long-term.
- Iraq situation has been boosting energy stocks
- On the 15 minute chart - Good pullback yesterday, but didn't expect it to last long.
- 3 minute chart: looked like it was going to reverse about 10am when it hit the 101.70 support line. Reasonable chance to bounce to 102-103 in a day or so.
Chose July 3 ex to give myself wiggle room if I'm wrong. I prefer about one month out for that reason. Most of my major losses have been trying to trade weeklies.
103 strike is one strike out of the money, with Delta of .32. I prefer trading stocks with deltas over .50 because I can salvage more value if I have to bail. In this case, .32 OK because I am expecting it to regain the 102-103 range, hopefully by tomorrow.
Ended slightly up today. Fairly good probability I will get out of this one alive.
Other clues:
- I am primarily a candlestick trader, but not a great one yet. Also trade with 13 and 4 SMA crosses.
- I tend to enter trades impulsively, thinking that it's going to run/plunge immediately. Generally wrong. That's what happened with AMZN. Next Port-Mortem.
