I predict that the IXIC will close at $23,380, which is at the Fibonacci 38.2 level. Concurrently, there is a phenomena where lower highs is being observed, coupled with the downward trending trendline resistance as per image 1. This trendline has been tested twice but I personally felt , it may breakout at the coming resistance since GDP data is strong. Market consensus felt that strong GDP data results is low to zero possibility of a rate cut but next year is the year of a Mid Term Election year where President Trump needs a good report card to retain his popularity and paves way for the next Republican president elect. So, I felt President Trump will at his capacity try to bring about a positive stock market situation which is the most immediate and direct illustration of his administration performance.
I have a trade idea of initiating a Diagonal Spread on $Dell Technologies (DELL.US)$ which is a laggard still in the current market condition, with a relatively lower risks. My Long Call will be timed at 5 months and beyond at slight ITM strike price of $125. whereas my short call will be placed at about 2 weeks expiry, at $135, which is about 20 Delta/ 1 S-D. The risk to reward profile as shown in PIC 3 is favourable. With a near term support of $120, if the stock price falls to that level, the active loss is just slightly about $200 which is manageable, and with multiple rollings alongside a positive momentum, the upside potential is way more than its downside risks, which made this a good candidate.
I have a trade idea of initiating a Diagonal Spread on $Dell Technologies (DELL.US)$ which is a laggard still in the current market condition, with a relatively lower risks. My Long Call will be timed at 5 months and beyond at slight ITM strike price of $125. whereas my short call will be placed at about 2 weeks expiry, at $135, which is about 20 Delta/ 1 S-D. The risk to reward profile as shown in PIC 3 is favourable. With a near term support of $120, if the stock price falls to that level, the active loss is just slightly about $200 which is manageable, and with multiple rollings alongside a positive momentum, the upside potential is way more than its downside risks, which made this a good candidate.