Archive for the ‘Potential Setups’ category

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Stock Market Update.

March 8th, 2010

Today was a slow day, as expected. No major news and sideways price action.

In fact some of the stocks I mentioned last week have pulled back a little, and have reached target levels:

ZMH – start accumulating at 59.30-59.70. Stop at 58.20. Target 65.00. 1/5 Risk/Reward.

RINO – has pulled back more than 4%, but has already managed to get into positive territory. Expecting a 50% rise by May.

CHK – buy now at 25.00-25.50. It is a save pick unless it trades below 24.00.

ADY – been burned in this one, but I believe it deserves a second chance. Right now it is stuck between 22 and 21. My strategy would be to buy 1/2 at the current level with the stop below 21. Add to the position when we breakout above 22. Looking for a gap close at 24.

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All the resistance has been violated, looking for a test of 1150.

March 5th, 2010

All resistance has been broken, the market is continuing higher and my puts have lost half of their value overnight. In other wirds, business as usual.

As I have stated before, today is a break or make day – it will determine the direction for the coming months. And this direction is pointing higher. Maybe we will get some retracement going into next week (I hope we will) but I am not shorting, but just waiting for the long setups.

Here are some potential plays:

CHK – buy 25-26. target 35 by april opex
CALM – buy at 32-33, target 40-42 by april opex
ZMH – buy at 58-60, target 52-week highs.
AIG – buy 27-28, target 33 next week
RINO – pullback to 22. buy. target 27

Use 3% stop loss.

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2007 and 2010 comparison.

March 4th, 2010

Compare the following two charts from the past and the future. It will be interesting to see whether History repeats itself or not.

The chart from December 2007.

The recent price action.

Tomorrow the Nonfarm Numbers will be announced. I have no idea, whether we will sell off, or gap up higher (I would liek to see gap down and then gap close and beyond). Though I am betting we will close lower this time next week.

Bailed out of my GS puts for a loss, switched to longs, closed those for a small profit. Bough AAPL puts for a gamble.

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Shorted GS – Target 135 by April.

March 1st, 2010

Today I got the confirmation, that the market has stalled at current levels. The chances that we are going higher from here are limited. Strong resistance at 1113-1115 area (possible double top in the making).

From here we might trade sideways for awhile in a tight range of 30 pts. or go lower to my target of 1030. Only time will tell, which will happen, but one thing is for sure, longs is not the place to be at te moment.

I have desided to try my luck with GS. The stock has been under a severe pressure lately, there is ton of resistance above 160$, and should the next drop in the stock market occur, it will be one of the biggest losers.

Again, I am playing this with options. Bought some 150 April Puts @ 3.70. Looking for 135 by April Option Expiration. Stop is above 161$.

This trade is tricky, though, as we can fast to 150-148 are then reverse to break 160 resistance, so I will be monitoring this trade closely.

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Got the confirmation today. We are going UP.

February 25th, 2010

Today I have got the confirmation, I was talking about – the pullback is over for the time being, and the next stop for SPX is 1113 – 1120.

it also looks like EUR/USD has also reached the bottom for awhile. The pullbacks are keeping being bough back, MACD shows divergence.

As for the stocks, we’ve got an ugly opening today, but managed to make it all back. Also, a lot of stocks have closed the day with big gains, erasing the losses for the previous days. One of those stocks is POT.

This is a nice buy here a 110-111, with the stop below 105 and a next weeks target at 122. Short term target is ~116. You may also want trade through ATM Call options, as they offer a better R/R for a trade.

I personally have bough March Calls@110 at 5.05. Stop below today’s low. Looking for 122 next week, though it all depends on tomorrow’s price action. If SPX is not able to break above 1113 I am out of my position.

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The correction is likely other. Still need more confirmation.

February 23rd, 2010

The weeks has started with a pullback, which is a positive sign in my opinion, as this will help to fuel further rise in the days to come. Currently SPX is sitting at 1090-1095 area, which is a pretty solid support. If the level holds I am looking for 1110-1115 as first target and 1130 as the second target.

In case we don’t hold the support at 1090, this might be a sign of more downside to come near term. Targets on the downside are 1030-1010.

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Buy Gold. Target 1155-1060

February 18th, 2010

Looking for Gold to hit 1155-1060 in a couple of week’s time. Buy here at 1105, stop below 1095. Nice 1/5 Risk/Reward trade.

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List of Stocks to trade.

February 18th, 2010

Here are some interesting possibilities, with 20-30% upside potencial in the Basic Materials Industry:

CDII – buy at 1.55, stop below 1.45. Will be looking for a 100% return in a couple of months.

TIE – this is a real gem, check out the chart below. Looking for >50% return in a couple of months. Buy at 10-11. Stop below 10.40.

ATI – it represents the same chart pattern as TIE, though expected returns are not that exciting. Thus I would suggest buying some 45@March Call Options in this one. Target ~50$ by March Expiration.

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Exited Google Options. List of Stocks to trade

February 17th, 2010

Exited Google Options for a nice profit yesterday, made back what I have lost in KAZ and then some. Will be looking to buy some Feb@540 options at the pullback (if there is one) at the open today. The catalyst for the pullback might be the gap below and a resistance are at 1105 in SPX

Here is the whole list of long setups for the coming week:

Less risky.

WOOF, ABVT, SHLD, ATI, ADY, GOOG

More Risky
ACAD, AMD, APL, BKM, C, BPCG, CBI, CCOI, DPTR, HOG, INSP, JADE, CNA, JAH, HME, MSO

All the setups are almost the same, the idea is to buy a pullback in the rising stock.

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Back to options trading. Trader Tony LOVES Google!

February 11th, 2010

Well, I guess, trading small cap stocks isn’t just for me. It is not just because of the big hit I took on KAZ (I have lost -13% in that trade). I guess the mane reason is the lack of liquidity and the need to be patient. And by patient. I mean – really patient.

For most of the people that would be the best way to invest in the markets – you research fundamentals, you dig for information, you compare long-term charts and competition, and then you make the move. You invest in several companies with the idea to hold this positions, at least 4-6 months.

For me, as a trader, this route doesn’t work – my capital is my working tool, and I cannot afford stash it away for half of the year.

So, now I am back to trading options, which are great tools to achieve higher return with well managed risk.

The chart below indicates, that the pullback we witnessed for the past 2 weeks may well be over, and some kind of rebound is going to happen soon. And by buying 3  Google Calls@Feb for 1.98$ I am betting that it has already started.

My stop is below 525$. My Targets are 550 and 570 (gap close)

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