August 5, 2019 - MDT Alert (EW)

While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to the six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three-day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.

As I look around at the carnage today in the market, I am trying to find a few of the remaining stocks that have not already made substantial moves to the downside.

One stock that seems to fit this criteria is Edwards Life Sciences Corp. (EW).

There are a few technical setups I like for EW to follow through a bit more on the downside.

The first is that fact that it just sold off the upper band.

And the second is that there is an open gap to the downside.

My suggestion today is this:

Buy to Open September $210 Put at $8.00

Sell to Open September $200 Put at $4.30

The nest debit will be $3.70 per spread, with a maximum return of $6.30 per spread.

Based on the nominal portfolio, I suggest you limit the trade to a 3 lot of about 1% of the portfolio.

Based on the nominal portfolio, I suggest you limit this trade to 5 spreads or a risk of about 1% of the portfolio.

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