OLED : This stock is EXTREMLY volatile. If and when the stock moves in the direction of your hypothesis, you will have great percentage gains. Over the course of the week, the call to put ration was expanding. As of Thursday, November 22, 2013, the call to put ratio was 6:1. That is a major bullish indicator. I jumped at the opportunity at 100 contracts, and at 125% it paid off. I already have a sell order for Monday. TAKE THE MONEY AND R-U-N!
To the upside potential there is much more room for growth. But for the immediate trade, the pullback from $18.50 I see the major support line at $14.50-$14.45. A 21.66% gain from the short play. That also would be the mark where I would buy in for long term plays. Because the $35.00 strike represents an approximate 13%
discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. With that said the difference of buying a put vs. selling a call isn’t the great. $.15 difference isn’t that far apart. With WOR hitting highs, I would sell the Dec $40 call @ $1.10. For safety I would look at the March $35 call @ $3.70. This would also be a good price to go long in this stock, if the trend reverses to move upward. $45 Calls have open interest at 3,498 contracts. January $45 contracts have 6,648 in open interest. The options pit clearly see upside potential. Coming off its May highs of $56 there is room to grow. There is the double bottom off of $38.65 where it is now at $39.71. This would be the perfect area to buy the stock. But if the estimates are correct and it is overvalued, you would want to buy the Dec $40 put at $0.95 or the January $40 put at $1.40. But the option play would be profitable if the stock does not break the $40 mark for the 5th time. If the ceiling holds, then I believe the stock will find its way to its E(Rv) price. The $35 calls have plenty of interest. This stock will easily hit $35 within a month of two. It has developed a rising channel from $32.51 - $30.91. A rising channel is a channel that has a rising or appreciating bottom or rising floor. Which means in the trading range the bottom end of the trend is rising. The stock will eventually come to the channel head or “point” and either breakout and usually explosively by a few points or it will breakdown an d fail. Which then the stock will contract to its major support which is at $31.00. And since the stock is not too far away from that by beginning this channel it would be worth the risk $.60- $.70 worth a risk from the lows. Buy the Dec $35 calls at $.10 and there will be plenty of room to grow. This cheap price will allow for massive accumulation, and the power of leverage with options. Because there are no options for this investment I would advise caution. I see a good buying opportunity at $26. The $.57 difference is not that much, but it falls into the “chasing the car” scenario. I would recommend wait for a pull back, or a profit taking situation to jump in. Virtue and fortune favors the patient. I like this opportunity. Looking at a max chart gives this
particular stock a good perspective. There is resistance at $46 as the new ceiling, and $39.90 as a bas support. At $42.66 the $3 difference will allow you to see the future momentum. In the grand scheme waiting to $46 will allow you to measure safety and shoot for $58.72. Giving $3 to test the theory is good opportunity risk to get $12 in profit. But if the stock were to break down I would begin shorting at $44 and the base support line would be $33 mark. So an upside potential of 29.28% and a short potential of 25.76%. Either direction will be VERY profitable. A fellow trader across the pond sent me this. Apparently our associates in London, are concerned about the potential danger of the United States will once again start the beginning of the end of the bull rally. My reply..."you're just noticing this!?!"Although the EUR continues to bounce off the ST bullish trendline, the bears
keep selling off the pair impulsively suggesting who's in control as one hour of selling takes out the last 15+hrs of buying pressure. The pair is approaching a bearish sell zone that could set up a low risk, high reward opportunity. I'll look to sell into this zone, with TP1 being the low of the blue trendline, while TP2 would be a return back to the swing lows around 1.3303 CSIQ - Taking major losses in CSIQ, off setting the loss with a spread with the $33 calls, and tomorrow I'll trade around the stock to off set the loss. I expect to reduce the loss to about 15% from almost 30%. Thankfully I did not have too many contracts invested.
Have you ever played a flight simulator game? Imagine: you are about to stall and the British accented on-board computer starts to alert you: "Warning...Warning...Warning...Stall or pull up". I hear that voice right now. Volume on the market is sluggish. This morning at 4:30am, Chinese CNBC said that economists were worried about lack of volume in the markets; and it is not just the equity markets, but also Bond, Foreign Currency, and Commodities. The mom and pop businesses of the world are still tight.
Here in my small world of the Metro NYC area, 5 families that we are close to have immediate house hold members who just lost their jobs this month. The number one top salesmen for a fortune 500 computer company, one major analyst, one computer programmer, one double doctorate in economics, and in my own family a Vice President at a pharmaceutical conglomerate. The numbers on unemployment are in my opinion fraud, because the intangible factors that go into choosing a gallon of gas or a gallon of milk are not factored in the way they should be. An article this week by Jess Jiang and Jacob Goldstein on NPR radio goes in depth on the real unemployment numbers. This new study was released from the Labor Department Friday, November 8, 2013: http://www.bls.gov/news.release/empsit.nr0.htm Which basically says: we are not as bad as we were, except if you are African American, Oriental Background, or Women in the workforce. So Caucasian males are doing a little better then previously in 2009-2011. Also, the other statistics used are skewed in the labor department's report - especially for recent graduates ages 20-25. In short, lack of volume, lack of liquidity, and biased reports should be indication and reason enough to take caution and to start making adjustments to your portfolio or at least seek council from your financial advisor(s). Santarus Inc. (SNTS) : Short the stock @ $31.50 till $21.88. The run it has had is incredible, but the stock has yet to experience a good retraction. It has already experience once in late July, but then exploded. I have sold the $30 Call @ $2.00. I see a good repurchase point at the $18 mark. I plan to purchase the Jan $20 Calls @ $12.00. Obviously the premiums will change but I see other see the pattern I see because of the interest numbers. Canadian Solar Inc (CSIQ) : The momentum in the clean energy sector was greatly underestimated and them was over emphasized. There hasn’t seemed to be a good balance of price sustainability for solar stocks and market share growth from the major companies. FSLR and CLIFF have all be good stocks to hold and then short against. CSIQ seems to be losing momentum at the $30 mark and I would like to take a few shares out against it. $30 seems to be a good Resistance line to short to $22 which seems to be the support #2 after $26. Selling the $30 Calls @ $2.55 would be a better option than buying the $30 put @$4.50, not to mention the lack of open interest. The Jan $22 call @ $6.70 would be a good reentry position. The open interest indicates the same sentiment at 2,667 contracts. Gentium SpA (GENT) : I love stocks with major runs. Small time investors get overly excited and become careless. When they see great profits, they seem to not pay attention until it’s too late. When they realize they missed their excited that same great stock that ran up becomes a fire sale. Especially if it is not a sound company with stable investments. I see no options for this stock put that still will not stop me from shorting it. I own the $45.27 shorts. I always like to get in on “odd numbers” or this technique as I was taught is called “odd entrances”. The Pivots I see are the $40, 39, 36, and my target $28. The $28 mark was held longer than others, which indicates that it will be a test mark. And since there are no contracts the stock will have to rely on the pivots and the traders who believe the smoke signals, tea leaves, and self-fulfilling prophesies. Bitauto Holdngs Limited (BITA) : From September 2013 BITA has had a 42.69% gain. The visible support lines $24, 20, 16, 14, 12. The significant run seems to be not able to break $26. It has touched the line four times already from October 23. Selling the Dec 30 calls @ $.095 or the $25 Call @ $2.15 would be a cheap way of offsetting the cost of the Dec Put @ $7.10. The problem with the put contract is the volume. There are only 10 contracts in the open interest pit. Selling the call will probably would be the more probable transaction to get filled. Lockheed Martin Corporation (LMT): USA Inc. Will always be around, because we have to kill people. Simple as that. As long as Lockheed makes the most incredible machines, the government will always have a check book. Daddy may cut the allowance, but like the nerds of the world they will buy the video game. What does that mean; we love our toys. Y-F-22 raptor, F-37 striker, the new toys that go boom, are always going to be on Uncle Sam’s Christmas list. $138 is expensive, and the run I believe is insider transaction, so I own in my portfolio: I sold the Jan $140 call @ $1.65 and plan to buy the March $80 Calls @$25. Alexander’s Inc (ALX): support line at
$299.49, an upward momentum trend on the 200 day, 100 day. Long term probability with this stock would be a retraction to the support and a bullish trend. |