Identifying bull call spreads can be assisted through technical analysis. Technical analysis allows identification of expected price movement through indentifying trends through momentum indicators and trend lines. Indicators which are used when identifying trade opportunities to enter a bull call spread are:
- Share Price Uptrend
- Oversold – MACD and Stochastic
- Momentum indicators
- Break out formations
Fundamental analysis can determine if a trade is viable or not. There are a number of fundamental factors that influence the option prices of a stock. When identifying a bull call spread you have a bullish outlook on the share. Therefore you are looking for a positive announcement either for the share, sector or share market in general.
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