Swing Trade Idea (CCI) – August 6, 2024
Our bearish trade for Tuesday, August 6th is Crown Castle Inc (CCI). CCI is part of the Real Estate Sector, which performed at 6.14% over the last month. CCI overperformed relative to its sector over the same period at 15.31% despite a sharp pullback yesterday.
CCI lost around 4% of its gains yesterday, confirming its overbought state and a likely continued pullback towards support at $103. The double top at $115 adds confirmation to our bearish thesis. We are therefore playing a bearish Credit Spread that collects 39% Premium/Width, which is an excellent risk/reward ratio.
As a close, if CCI were to trade above $115 for multiple days, this would invalidate our analysis and we will consider cutting losses on the trade. We will also consider cutting losses on this options trade if the value of the vertical spread moves above $7.80.
