Long XLV Swing Trade
I recently made the decision to purchase the ETF XLV (Health Care Select Sector SPDR Fund) due to a combination of technical and market factors. One key factor that influenced my decision was the fact that the ETF was in an uptrend, having recently reached a 34-week high. Additionally, the recent pullback to a support area and the fact that it was trading above its 200-day moving average also added to my confidence in the position.
My plan for this ETF purchase is a short-term swing position, with a timeline that can range anywhere from 2 days to 3 weeks, depending on when I receive my exit signal. To limit my risk in this position, I chose to use an option strategy by purchasing a call option, which has at least 40 days until expiration.
By using a call option, I am able to potentially profit from an increase in the price of the ETF while limiting my risk to the premium I paid for the option. This allows me to participate in the potential upside of the ETF while being protected from a potential decline in price.
In conclusion, my decision to purchase the ETF XLV was based on a combination of technical and market analysis, and I have taken steps to limit my risk by using an option strategy. I believe that this short-term swing position has the potential for significant returns, and I will be closely monitoring the position for any exit signals.
Below is the chart. The Green arrow denotes my entry.
Update: On February 1st I received an exit signal on this position in XLV and sold the call I had purchased for a gain of 80.00 per contract. This was a 21% gain in one two days. Below is the chart on exit.
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