Wednesday, September 19, 2007

Nice Plays and New Ideas!

From my last post I shorted TIE & OGE at their 50SMA's. I covered for a couple hundred dollar profits on both stocks, no substantial movements downward, but a pullback nonetheless.

Since, BIDU has broken out on strong volume and taken off for the skies! As of right now the stock is looking ripe for a pullback, and that's exactly where I'll be buying Call Options when this occurs. The previous resistance of $220 will certainly hold as support if the stock will even dare trade that low. Here is the chart I last posted, compared to where it is now, and my recommendation was to watch for a high volume breakout or a bounce against resistance downward, although the former was achieved.

Also my favorite pick that I've been stalking for a SHORT is NutriSystems (NTRI). The stock just couldn't muster up enough buying power to push past it's 50SMA and try to fill an earnings GAP Down from a few months before, perfect to short with relatively low risk, with a great reward profile. Take a Look!

I was a buyer of the OCT $55 Put Options as well as the $45 strike for a more aggressive play. Today the stock was down huge, to the tune of 12%, with the options spiking up 150% and 95% respectively. My Virtual Trade transactions consisted of:

September 13, 2007:
Buy 50 NTRI OCTOBER $55 Puts for $2.65 per contract (.NSIVK)
Buy 50 NTRI OCTOBER $45 Puts for $0.85 per contract (.NSIVI)

Sell 25 NTRI OCT $55 Puts for $4.70 - Profit $5,125
Sell 10 NTRI OCT $55 Puts for $5.80 - Profit $3,150
Total Realized Profit: $8,275.00
P.S. Holding remainder 15 contracts currently priced at $6.15 (unrealized - $5,175.00)

Sell 25 NTRI OCT $45 Puts for $1.50 - Profit $1,625
Sell 10 NTRI OCT $45 Puts for $1.70 - Profit $850
Sell 10 NTRI OCT $45 Puts for $1.50 - Profit $650
Total Realized Profit: $3,125.00
P.S. Holding remainder 5 contracts currently priced at $1.55
(unrealized - $350.00)

I've been trading virtually a lot lately to test strategies and gain confidence in the ideas that I'm solidifying with my research. I use Virtual Stock Exchange, Virtual Stock Exchange to buy and short stocks in individual portfolios and also CBOE Virtual Trading Tool.The CBOE has a brand new trading tool which is ABSOLUTELY AMAZING! It's powered by ThinkorSwim and also, Tim Knight's former website in which he developed and then sold.

Wednesday, September 05, 2007

Shorts, and Possible Breakouts

I'm shorting Titanium Metals (TIE) on the basis of it tagging it's 50SMA (simple moving average). The stock itself has been weak, relatively dampened volume, and it crept up right to it's 50SMA to the penny. My observations are that it will decline from here on weakness. I'm buying the September $30 Put Options for $0.35 cents per contract. (BIDU), one of the tech power-house stocks that is up there with Google, Apple, and Research in Motion (RIMM). This stock has been on a roll lately ramping up nice percentage gains and today it popped right up and tested it's resistance level of $219.25. It briefly touched $219.90 before coming back down to earth, but the volume was above normal which is a good sign of buyers in the market and it could quite possibly break-out to new levels. This is one I would definitely be watching for a false breakout, and/or test of resistance, or a full fledged breakout to new highs since the tech sector has been on fire.

I'm also shorting OGE Energy Corp.(OGE) as it tagged it's 50SMA and has been very weak as of late. The volume was sub-par which tells me this run won't last, the buyers aren't there, and it's going to fall, TIMBER!! I'm shorting the stock outright vs. buying PUT Options. The Open Interest for the September $30 Put Option is "11 contracts", wow talk about lack of liquidity.