Bearish – CL $68.02 – Staples
The S&P 500 (SPY) has started to consolidate into the new year as geopolitical tensions in the Middle East rise. Notably, the VIX declined on Friday to 14, suggesting that traders aren’t too concerned about market volatility. Despite strong momentum and relative strength, we continue to see risks of a pullback towards $302.50.
CL Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang, Chief Strategist of OptionsPlay suggested that Colgate could underperform moving forward. CL was rejected at its 200D SMA last week and printed a new low on a relative basis, provides a good short entry. Tony Zhang, expecting CL to trade lower, suggests buying a Feb 70/52.6 Put Vertical @ $2.86 Debit. As of Friday’s close, these puts were trading at $2.90 Debit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: CL OptionsAction Trade
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