Sally Beauty Holdings, Inc. gapped down big today towards my target. It's close enough for me to take advantage of the big sharp drop and close my position at a nice 28% profit. I bought the put diagonal for $2.58 and just sold it for $3.30.
HERE IS THE ORIGINAL TRADE CALL:
Sally Beauty Holdings, Inc. (SBH) has an ugly rally formation here. After a long rally from around $22, it has pushed up in a large 3 wave move that is finishing off with ending diagonal. This stock is ready to fall off a cliff. Although I expect a sharp move, the most viable option strategy on this stock is a long put diagonal. This is fine with me anyway because this stock can float and chop higher for a few more days or even a week or two before it declines. Here is my trade:
Buy to Open SBH May 20/Jun 17 30/35 Put Diagonal @ $258
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PLEASE NOTE: THIS IS AN ELLIOTT WAVE BLOG EXPRESSING AN OPINION AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. TRADE AT YOUR OWN RISK.
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