DailyPlay – Opening Trade (GLD) – February 27, 2023

GLD Bullish Opening Trade Signal

View GLD Trade

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish

Details: Buy to Open 9 Contracts Mar 17th $168.50/$176.50 Call Vertical Spreads @ $2.15 Debit per contract.

Total Risk: This trade has a max risk of $1,935 (9 Contracts x $215).

Counter Trend Signal: This is an ETF is currently bearish and is expected to bounce higher from a level of support.

1M/6M Trends:  Bearish/Neutral

Technical Score: 6/10

OptionsPlay Score: 91

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

Please note that these prices are based on Friday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

Investment Rationale

Gold has been selling off as the dollar (DXY) bounced from the 102 to 100.5 level that I called for a dollar rally to start. Now the gold futures posted a daily Setup -9 count this past Friday, and the SPDR Gold Trust ETF (GLD) is a hair from its TDST Line support and, basically right on its prior breakout level (the horizontal dashed purple colored line), now let’s look for a quick rally in gold from here.

GLD – Daily

As such, let’s look to buy the March 17^th GLD $168.5/$176.5 call spread (the higher strike is right where the top of the daily cloud is for most of March). On Friday, this spread went out at $2.15 mid, and represents about a 27% cost of the strike differential – a number I can easily live with for an ATM spread.