An incorrect draft version was posted in error on Private Trader and has been removed. This is the correct version.
The analog semiconductor company Avago Technologies Ltd. (AVGO), headquartered in San Jose, California and Singapore, moved above its 20-day price channel on Tuesday, producing a bull signal. Bull signals on AVGO have historically high odds of success, making it a candidate for a bull play.
[AVGO in Wikipedia]
I shall use the OCT series of options, which trades for the last time 37 days hence, on Oct. 16. I presently hold a position in AVGO expiring Sept. 19 (analyzed here on Aug. 26) and shall treat the two positions separately.
AVGO has completed four bull signals in the past year, all of them successful, with an average gain of 9.9% over 59 days.
Click on chart to enlarge.
|AVGO at 10:50 a.m. New York time, 90 days 2-hour bars|
|Week||SD1 68.2%||SD2 95%||Chart||Earns|
sold for a credit and expiring Oct. 16.
Probability of expiring out-of-the-money
The premium is $1.35, which is 27% of the width of the position’s wing.The stock at the time of purchase was priced at $127.97.
The risk/reward ratio is 2.6:1.
The price at entry was $7.97 within the zone of profit, or 1.6 times the average true range.
Decision for My Account
I've entered a position on AVGO as described above.
-- Tim Bovee, Portland, Oregon, Sept. 9, 2015
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