On Friday’s Options Action, the crew analyzed the performance of the retail sector. The retail sector has underperformed over the past 2 months and just completed a head & shoulders formation. Costco, while outperforming the retail sector, has recently bounced lower off a major resistance level. Expecting Costco to move lower, Michael Khouw suggests selling a Jan 230/240 Call Vertical for a $4.10 Credit. As of Friday’s close, these call options were trading at a $3.44 Credit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: COSTWealth Strength IndexAAPL is Extremely Up and trending Up Options Action Video