Buy Alert: July 17, 2015
Buy Alert: July 17, 2015
Option Strategy:
Buy SPDR GOLD TRUST $GLD September 18, 2015 $107.00 puts for $2.30 or better.
Commodity Outlook: Gold
Something very interesting is happening in gold right now…
After days of stagnation at important multi-year technical support near $1,150 per ounce, bears are taking the yellow metal sharply lower in today’s session.
The fact gold couldn’t even start to muster a rally during the recent Greek debt debacle tells me bullish investors are scarce. And now that the metal is falling to new lows, the door is likely open for much lower prices over the next few months.
Here’s some more detail, and how we’ll play a technical breakdown in gold…
Resource Trade: SPDR Gold Trust $GLD
As you know, $GLD is the top ETF for trading gold. If the price of gold falls, so does $GLD.
Given the massive technical support line that gold is breaking below today, we could see the yellow metal plunge to $1,000 area in coming months.
That means $GLD could fall to the $100 a share area in the not-so-distant future.
So here’s what we’ll do…
Buy the $GLD September 18, 2015 $107.00 puts for $2.30 or better.
The current bid/ask spread for this contract is $2.02/$2.10.
Do not pay more than $2.30!
Our official entry price for performance tracking is $2.10. Your price may be higher or lower.
Exit Strategy:
Remember, we want $GLD to trade lower. Our first profit target is $104.00 while our second target is at $100.00.
Our risk control line is at $111.00. If $GLD trades above that level, conservative investors should consider closing this trade to preserve capital.
Category: Commodity Trading
