IWM ETF Trade Setup
We are adjusting the December
expiration month Bear Call spread and rolling it out to end of the month (December Quarterly)
IWM closed at $77.31 on Tuesday (three days until the regular December expiration date)
IWM is priced ABOVE its current 14-day EMA (see IWM chart down below)
IWM is trading ABOVE its 20-day Bollinger Band SMA (see IWM chart)
IWM is ABOVE its 50-day simple moving average (see IWM chart)
IWM is also priced ABOVE its 200-day simple moving average (see IWM chart)
Relative Strength Indicator (RSI) is extremely bullish (See IWM chart)
Moving Average Convergence/Divergence (MACD) is bullish (See IWM chart)
IWM Bear Call Spread
The November 28th Couch Potato recommended a December expiration month call spread
We are immediately closing out this spread to adjust to higher strike prices (see tables below)
We are doing a trade adjustment to roll the initial December call spread to the end of the month (December Quarterly). Also note the increase in the number of contracts â€“ this will help minimize the loss. The trade adjustment should reduce the loss to approx. break-even (see table below)
IWM Risk Analysis
The IWM index is overbought and the charts indicate that it may be at a resistance level. However this may be a pause before stocks push higher at year-end. If small caps take off again the adjusted $79 strike might be at risk.
As mentioned above we need adjust the initial IWM bear call credit spread.
Couch Potato Trader Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices (though many often do) or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable trader might receive utilizing these strategies. If you don't get close to these results, guess what. It isn't the fault of the strategies.