Well, our first rule of thumb for any Credit spread is we want one of two things happening. First, ideally we want the stock to be trending AWAY from the credit spread, which back when the Triad Traders met, would be a Bull Put. As of today though, the credit spread to enter would be a Bear Call since we have seemingly reached the resistance level of our horizontal (neutral) channel. The second thing we would like to see is a neutral trend in the stock, showing that it has little to no real overall movement. As you can see from the chart, PG has been rangebound for months...that's good for this type of trade!As Keith pointed out in his comment, an Iron Condor on PG looks like a solid bet based on the flat, rangebound trading levels over the past few months. Certainly a 65/70 Bear Call and 60/55 Bull Put spread look to be somewhat safe based on the support and resistance levels. One caveat though, earnings are fast approaching so it may be dicey getting into any trade at this point.
For argument's sake, let's "leg-in" to an Iron Condor. Right now, since the stock is at channel resistance, I'd first play a Bear Call Spread at 65/70. As of today (after hours), the September 65/70 spread would net me a $1.00 credit ($1.10/$0.10), or a 1:4 Reward/Risk ratio...typically lousy of an Iron Condor. I would then wait for the stock to move back to support before entering the Bull Put spread to close the IC. My hopes would be that the stock ended up somewhere between $60.01 and $64.99 (preferably not THAT close) on OED in September.
Of course, you would need to set up your Stop-Loss points, and/or decide to close the short side of one of the spreads if the stock began to move against you.
Happy Trading!
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