One of the stocks that I have stalking this week is $TXRH and it looks ready for a new breakout. What I have been monitoring is the elevated RSI (wanted to see it work off some) and I also wanted to see how the MACD would resolve (has become embedded here, does it bounce or cross down).
A look at the Daily chart:
- You go long the stock
- You buy a near-the-money Put to protect against any downside move
- One reason this may be tough here is that you only have the 22.50 & 25 strikes to work with.
Other trade ideas:
- A June 22.5/25 Risk Reversal
- Long the June 25 Call ($.30)
- Short the June 22.5 Put ($.25)
- This trade can be done for a $.05 debit at the moment
- Note: the June 20 Call has very large Open Interest so this makes me more bullish
- Buy the June 25 Call for a $.30 debit