A breakout in Melco

One of the more traditional trade setups is the Breakout play – where price approaches a key Resistance line and breaks up through it. The setup involves watching the key level and looking for volume as it breaks out. A cooperating market is helpful, lol.

One such setup I am looking to play in $MPEL. Here is the Daily chart:

MPEL_BThe small Topping Tail that formed in the breakout attempt yesterday, April 24, was not confirmed today. What is also worth noting is the MACD cross up that is in progress (noted in Blue box).

My trade is to sell the May 22 Put at $.30 — I will use the proceeds to either buy a Call Spread or this gives me a low entry cost of 21.70 if Put the stock at expiration (if a breakout back-test occurs for example).

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