Using RSI to enter a trade starring F5 Networks

I have posted a few different charts today on $FFIV and thought I would show a Simple Approach using RSI. Here is a Daily chart showing 2 buy areas and 1 short area using just RSI to time an entry:

FFIV_RSI_buyYou will notice that price seems quite interested in the Horizontal Support line under $82.5 so timing the entry here takes some caution despite this O/S (oversold) RSI reading of 27. Here is what I would suggest:

  • Wait one more day, see how Monday looks
  • If price holds the $87 level then go Long the stock
  • Buy the April 87.5 Put for $3 & let it ride
  • If you want to reduce the cost you can consider buying the Apr 85/80 Put Spread for $1.30 and selling the Apr 95 Call for $.65 — this gives you some downside protection to 80.65 and caps the gain at 94.35 above

2 thoughts on “Using RSI to enter a trade starring F5 Networks

  1. Update: Here is my trade: BtO Mar 28w 82.5 Put & StO Apr 82.5 Put for a $1 credit.

  2. Pingback: Best Of The StockTwits Network 3-24-13 | The bclund BlogThe bclund Blog

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