TheOptionPlayer.com executed an Energy Select ETF (NYSE: XLE) short-term (35-day) strategy. Confirmation information is displayed below. Login with a Premium Subscription to view data/imgages
Why we recommend it:
The difference between funds paid out and received is a $.92 per share debit maximum for this trade. The profit should exceed $2.00 per share (approx. 220%) if the Energy Select ETF reaches our $76 target prior to the option contract expiration date. See Guidelines page at www.theoptionplayer.com/ for explanation on how trade is set up.
• As evidenced in the chart below, the Energy Select ETF (NYSE: XLE) crashed a few days ago along with other commodities.
• The energy sector is extremely oversold. The XLE ETF has not been this oversold since February right before the price rallied.
• The current negative inventory levels might boost natural gas prices in the near term.
• The Energy Select ETF bounced off its 200-day SMA which is a firm support level and indicates there is probably minimal risk of the price falling much further.
• The chart also confirms in April the last time the XLE ETF fell to the current level it recovered soon after.
• The published trade selected strike prices to minimize the amount of funds at risk.
52-Week High: $79.42
52-Week Low: $61.80