On Friday’s Options Action, the crew analyzed the performance of the industrial sector. Industrial stocks have continued to make lower highs over the past 4 months and recently just reached a declining trendline. Industrials have been underperforming the market since the election, suggesting further weakness in the sector. Coupled with a possible head & shoulders formation, points to a continuation lower. Expecting XLI to trade lower off the declining trendline, Michael Khouw suggests selling a Jun 15 76/77 Call Vertical for a $0.30 Credit.
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: XLI Options Action