Wednesday, Jan 12th
This week’s blog post starts with Wednesday because I wasn’t able to do much the first half of the week. My daughter was home from preschool Monday and Tuesday because of a COVID shutdown, so I didn’t trade much before today. I’ve limped into this little snaggle-toothed position in $TSLA.
The position comprises three call butterfly structures:
1. one unit 21 JAN 1050-1100-1150 straight fly
2. two units 21 JAN 1120-1130-1140 2-3-1 bullish unbalanced fly
3. one unit 18 FEB 1120-1220-1320 straight fly
Today, $TSLA showed some nice strength relative to the choppy market and closed right on its 1109 weekly HB. After last week’s gap up and liquidation, it looks to me like $TSLA wants another crack at 1200, and maybe its 1243.49 ATH.
As long as the market stays firm into the second half of January, I expect $TSLA to at least consolidate above 1100. If that happens, my current position will play out nicely.
On the other hand, if $TSLA rejects the weekly HB and retraces lower, I’ll need to adjust. That adjustment will include both adding one or more short positions and closing at least part of this bullish position. I haven’t been able to DH any of my current flies, so they’re still carrying all of their original risk. I won’t leave that risk in the market if $TSLA starts pulling back.