For active traders, there exists opportunity to profit from a correction nearing in the U.S stock market. One trade with a potential triple are the XLI April 21 puts 37 strike with a buy up to price of $1.00 and a $3.00 target (which suggests a move down to the 34 area). The overbought XLI is squeezing together in an acsending triangle while MACD is negative.
The trading approach for the put trade is to stop losses at 50%, and take half profits at a 100% gain. As mentioned previously, several signs point to an imminent correction, perhaps 5-8%, in the overall market, including a sell signal in the NYSE summation index and a recent trip for the Dow Jones Transport Average Bullish Percent Index below its simple 20 day moving average. In the averages, today’s close at the lows was a marked change in character for the market since the start of the year.