TheOptionPlayer.com sets up a Nasdaq Index ETF (NasdaqGM: QQQ) short-term (31-day) option trade (based on Tuesday’s closing quoted bid/ask prices)
Investors could simultaneously:
The difference between funds received and paid out is an approx. 13% profit if Nasdaq Index ETF shares close below $174 on Friday June 15th, but immediately execute a trade adjustment if it appears the price is moving higher. If the price gaps higher at the start of trading we might revise the strike prices. See Guidelines page at www.theoptionplayer.com/ for explanation on how trade is set up.
Why we recommend it:
• As confirmed in the chart below the Nasdaq Index ETF (NasdaqGM: QQQ) was rejected at a firm resistance level after the price reached the top of its current trading range this week.
• The QQQ ETF rallied about 4.50% over the past two weeks along with a broader stock market lift. This has brought many of the big name tech stocks to the upper end of their trading range and set up for a mean reversion.
• The chart confirms upward momentum starting to dissipate and might be signaling price pull back.
• Also the Nasdaq Index ETF is overbought to the level where the price typically pulls back.
• If the current technical signals play out as indicated, there is a high probability the Nasdaq Index ETF will be below the target price at June 15th expiration.
52-Week High: $175.21
52-Week Low: $135.80