Stock, Option and Futures Trading
Watching BTU for calls
Going into next week we are watching BTU for calls. BTU is sitting at support and we have potentially completed the correction which means the impulsive wave will kick back in. On a swing trade basis we have had a daily green bar so we would already be long looking for 1st target at $65.00 and the second target is $83.00.
The stop is $52.20 so you can see the risk to reward is 3 to 1 even to the first target. On the weekly chart BTU could have a bigger correction but even if that does happen there should be a nice trade up to the $65.00 target.
The best entry would be $55.00 Monday to enter the July 60 calls for .55 cents. Notice how if we can get .55 cents on the calls our MAX risk is .55 cents NOT the $2.50 on the shares. Out of the money calls are a great way to take a position without having to commit as much capital to the trade.
Our last major wave buy on BTU was $45.00 with a move up to $74.00 which was 29 points. From the $55 level to the $83 target is 28 so that is a 1 to 1 move.