$WLL Call Sweep Alerted on 1/9/17
Another great trade for our swing trade and options traders. After watching the options scanner all morning, we got an alert for a large call sweep on $WLL (Whiting Petroleum Corporation), to the tune of 10,000 contracts. Now, as I discussed in previous call sweep blog posts and in previous WarriorPRO mentor sessions with students, call sweeps by themselves are not instantly actionable. There is a level of due diligence, as with any trade, that one must undertake prior to simply executing an alert for such a thing. The date of this alert, January 9, WLL was pulling back to the 20 EMA support line, as seen below on the chart (purple line).
We love pull back entries as options traders for a couple reasons. The first is because generally speaking, the implied volatility will be lower, setting us up nicely for a debit trade. The second big reason we like these trades is because the stop is obvious. Support is clearly defined on the chart and so, if the trade fails, we will know right away. In the case of this $WLL call sweep, we can see on the daily chart that the pattern is strong. A move higher, followed by higher lows, a pull back to support and another move back up. We played this one perfectly. The best part is, we bought it at support and sold it at resistance. We don’t even care if it breaks out over 13.00! We already locked up 30%. Check out the video recap below.
$WLL Call Sweep Video Recap: