[Options] Putting Education to Work

Sean McLaughlin
July 13, 2023

[10/5: updated stop to 8.50]

I’m traveling throughout Southeast Asia — to eight different countries — with my All Star Charts analyst Steve Strazza, giving presentations at local Chartered Market Technicians (CMT) Association events, meeting local traders, enjoying native cuisines, and just marveling about the similarities we traders from different corners of the world all share.

So for the rest of the month of July, I’m going to cut the preamble and get right to the action for you guys.

As such, here’s the setup for the trade I’ll be putting on today:

From the recent Flow Report:

TAL completed a reversal pattern late this year as price broke out from a big base. However, the stock has slipped back below our risk level.

Meanwhile, it remains within a bullish momentum regime, suggesting buyers are steadily absorbing supply.

If and when the bulls reclaim the 6.75 level, we’re taking another swing at TAL with an initial target of 11.90 and a secondary objective of 17.50.

Here's the Play:

I like buying $TAL October 7 calls for around .85 cents.  This is the price they closed at on Wednesday. However, I'll be willing to pay as much as $1.00 for them. Beyond that it feels like a chase.

As long as $TAL remains above $6.00 per share, I'll continue to hold these calls. Any close below this level and the trade is probably dead. If there is any premium left at that point, I'll exit the trade.

In the meantime, I'll look to sell half of my position if/when $TAL gets above $10 per share to lock in some profits. And then I'll hold the rest into October.

If you have any questions on this trade, please send them here.

~ @OptionsSean

P.S. We do trades like this regularly. If you'd like to leverage Best-in-Class technical analysis into smarter directional options trades, try out All Star Options Risk Free! Or give us a call to learn more: 323-421-7991.

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