ABC Patterns in Options

December 6, 2010 · Posted in ABC Bullish, Head and Shoulder, Options · Comments Off on ABC Patterns in Options 

ABC Patterns with Options

ABC Patterns are integral part of many other patterns like Double Tops, Double Bottoms and Head and Shoulders. When I see Inv. Head and Shoulder patterns and its breakouts I plot ABC Patterns and trade using Options. Here is an example of CVS (Caremark Corp.) Daily Chart. This chart shows a clear Inverse Head and Shoulder pattern. Plotting ABC Bullish Setup, it covers from Sept. 2010 to Dec. 2010, trading above EL Level. On Friday Dec. 3rd, it traded above the Neckline to signal a breakout. The distance from the Neckline to the Head is about $6, so the projection from the Breakout level is also $6, targeting around $38. I plotted CVS Feb. $35 Calls in the subgraph. This chart also shows a potential double bottom pattern confirming the validity of Inv. Head and Shoulders in the underlying stock chart. The Feb. 2011 CVS 35 call is trading at $0.50c. Expected target is around $1.10-$1.40.

Options Charts using ABC Pattern

January 15, 2010 · Posted in ABC Bullish, Options · Comments Off on Options Charts using ABC Pattern 

Jan. 14, 2010

Here is an example of how ABC Patterns can be viewed on Options Charts. Baxter International (BAX) was showing an interesting ABC Bullish pattern as the price emerged from a low of $45 to $62 forming an ABC Bullish Pattern. From late October, the pattern was setting up to rise with Entry Level of $54.85. At the entry level, the target was 100AB at $67. Time wise, 100AB was marked for at 65 calls is Feb. 17th, 2010.

The BAX Feb. 65 Calls were priced between 10c to 15c. Current BAX BM also has an ABC Bullish pattern with Price targets of 100 AB at 0.60c, and 1.62AB at 0.90c. Current BAX BM price is at 0.50c.BAX_Options_Jan1410

ABC Bullish