Swing Trade Idea (ITW) – November 25, 2022
Our bearish trade for Thursday, November 24th is Illinois Tool Works Inc. (ITW). ITW is part of the Industrial Sector, which has performed at 10.79% over the last month, with ITW overperforming relative to its sector at 11% over the same period.
ITW rallied into a key resistance area of $230 and is now showing signs of exhaustion. As this is a counter-trend trade, we believe that ITW can retrace towards the first support level at $215, providing a good risk/reward bearish entry.
As a close, if ITW were to trade above $230 for multiple days, this would invalidate our analysis and we would suggest cutting losses on the trade. We also want to consider cutting losses on this options trade if the value of the vertical spread moves above $7.56.
