{"id":13688,"date":"2023-07-20T14:12:18","date_gmt":"2023-07-20T18:12:18","guid":{"rendered":"http:\/\/www.mainstbeatswallst.com\/?page_id=13688"},"modified":"2023-07-20T14:12:18","modified_gmt":"2023-07-20T18:12:18","slug":"candlestick-trade-with-cloudflare-net","status":"publish","type":"page","link":"https:\/\/www.mainstbeatswallst.com\/?page_id=13688","title":{"rendered":"Candlestick Trade With Cloudflare (NET)"},"content":{"rendered":"

I would like to welcome a few new readers. For the new readers, posting once in a while is something new. Before that I was posting everyday, sometimes multiple times a day. That’s when I was trading and posting my trades as I made them. I might get back to that sometime soon but for now I’m still not comfortable with the way the market is moving and I don’t want anyone mimicking my trades. I hope to get back to normal because I love Main Street beats Wall Street<\/strong> but I’m very worried with the political landscape and world events, and we know it’s news that moves the markets.<\/p>\n

I exited a trade today involving Cloudflare (NET). I entered this trade on Monday the 17th. It was a small trade and could be considered a Grasshopper trade, however, NET is a higher priced stock, and I didn’t do a Covered Call.<\/p>\n

While looking for a trade I noticed something on the candlestick chart. On Monday, NET was on the move along with all the cloud stocks. The stock opened at $66.67 and closed at $71.18, up $4.51. Toward the end of the day I made a very dangerous trade, but I was very confident it would be successful. While looking at the chart it looked like the stock was hitting resistance and would reverse from a recent upswing. This hypothesis was based on past performance, which is what technical analysis is all about.<\/p>\n

I wanted to sell an option on the stock but I didn’t want to own the stock since I felt it was going to reverse. I decided to trade like my past days and make a trade with my favorite strategy, Naked Calls. With the stock in the $71.20 area I sold a 1 contract Call to expire this Friday, the 21st. For my long time readers, I know a 1 contract trade is not my normal trade but this is the way I’ve been trading in this market. This really isn’t a Grasshopper trade because Grasshoppers shouldn’t be making naked trades.<\/p>\n

Let’s take a look at the candlestick chart I was looking at:\"\"<\/a><\/p>\n

This chart covers the stock from the first of the year. The red horizontal line shows the resistance level. I inserted 3 red arrows showing where the stock went up to the resistance level and reversed. The green arrow points at a long green candlestick. This is Monday, \u00a0July 17th the day I entered the trade. The last long red candlestick is today which is where I exited the trade. The candlestick after the long green candlestick of the 17th is Tuesday, this is a doji candlestick which is a reversing signal. I was already in the trade and this candlestick made me very happy. The next day (Wednesday) the stock went up for a while but the candlestick ended as a Shooting Star<\/strong> candlestick. This indicates a downtrend after an uptrend. Today the stock has a long red candlestick and as I write the stock is down $4.80. My option expires tomorrow and if the stock stayed down below $72 I would keep the entire premium of $1.95. The way the market has been moving you never know what the stock will do tomorrow. With the premium at 20\u00a2 I decided to do a Buy to Close, spend the $20, and exit this trade. I had a profit of $170 with no investment.<\/p>\n

7\/17\/23 \u2013 Sell to Open 1 NET 7\/21\/23 $72.00 C @ $1.90 (+$190)<\/strong><\/p>\n

7\/20\/21 \u2013 Buy to Close 1 NET 7\/21 23 $72.00 C @ 20\u00a2 (-$20) <\/strong><\/p>\n

\u00a0Profit +$170<\/strong><\/h4>\n

The odds are I could have held until tomorrow and kept the entire premium but I did the smart thing and took the profit. If I didn’t and the stock shot up tomorrow above the $72 Strike Price I would have to buy the stock and deliver it at a loss. When trading Naked Calls you better be disciplined and take profit because Naked Call options can end up biting you.<\/p>\n

I took this $170 profit and bought 16 shares of MPW, my high dividend stock. I now own 1677 shares of MPW collecting a 10.5% dividend.<\/p>\n

I have more to write about my dividend stocks which I’ll try to get out in the next day.<\/p>\n

If you have any questions about my Naked Call option with NET send me an email.<\/p>\n

 <\/p>\n

Successful trading,<\/p>\n

Steve<\/p>\n

The Options Coach<\/p>\n","protected":false},"excerpt":{"rendered":"

I would like to welcome a few new readers. For the new readers, posting once in a while is something new. Before that I was posting everyday, sometimes multiple times a day. That’s when I was trading and posting my trades as I made them. I might get back to that sometime soon but for […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-13688","page","type-page","status-publish","hentry"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/P75MP0-3yM","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/13688","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13688"}],"version-history":[{"count":1,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/13688\/revisions"}],"predecessor-version":[{"id":13690,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/13688\/revisions\/13690"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13688"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}