AMZN Trade on Dec 1, 2020 11:03 from tradelikelarry: Tradervue User Stock Trades.

Trade Planning:

• Daily Chart: Uptrend, Consolidation below all time high.
• TTM Squeeze: Daily
• Earnings Date: 1/28
• IV: 36%
• Potential Profit: $420
• Potential Loss: $1080

Reason For Entry:

• Playing the Daily chart, Put Credit Spread. AMZN is in a pattern of consolidation below its ATH. We are entering the trade at the cluster of moving averages (21 EMA and 50 MA). Our profit level is in line with a historical support level. We are betting that price action maintains above our profit level ($3065) by expiration next week.

Reason For Exit:

• Following our entry, price action continued to consolidate and maintained above our profit level on expiration. We let the PCS expire worthless and collected max profit on the trade.

Recap:

• This was a put credit spread play as price action was consolidating below its ATH. The entry was at a specific area (moving average cluster) as price action overcame that cluster during its consolidation phase. We were betting that price action maintained above our profit level ($3065) by the expiration date. In this case the expiration was 14 trading days away. Following our entry, price action continued to consolidate and maintained above our profit level on expiration. The PCS expired worthless and we collected 100% of the premium (+$420). This is a great example showing that you can profit with credit spreads even if price action continues to consolidate. The reason is that time (Theta)is working for us with these spreads and it showed here with our AMZN play.