Tuesday, August 5, 2008
Darwin's PFE
I was having a decent day until 10 minutes ago. Fellow trader, Darwin, tee'd this up for me on a GOLD platter last week. F'me! I seriously considered starting with 500 Aug 17.5 Calls since the stock was at $18.60 and there was no premium on the calls. There was an easy stop level at $18.50...$0.10 risk! I passed as the market was trading down in general and I didn't want to carry much over the weekend. Anyways, it was obvious to someone else as nearly 370k...yes, 370k Aug 17.5 Calls traded today. Nice job, D! I'll be kicking myself the rest of the week as there is more upside to this one...
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5 comments:
C'mon...beginners luck!Serve one up to me then on a GOLD platter! Ha! I guess you didn't like INTU either>>>ok now I'm going too far. everything x-commods was up today. Hope we see follow thru tomorrow. I am looking at a few gold stocks as the group is once again out of favor but the equities lead the metal so I think we see them gain traction before the metal confirms reversal (regardless of what oil continues to do). I could change my tune tomorrow however. Keep up the picks...and remember, your serve.
OE, I've spent the better part of the evening scanning a few things with a focus on GOLD....yes I know, it's in the throws of an avalanche...but therein lies the opportunity. I've traded gold for the past six years using the 65 week MA as my key indicator to go long or short. During every correction in the last six year bull market for gold, the 65 week MA served as support. So the best time to buy gold (the metal)is when it comes back to this support line.Whenever gold rallied too far above the avg, gold either dropped back down or consolidated while the line played catch up. It looks like we're in one of those consolidating periods now for the metal. Gold probably needs to drop to around $850 for a gold purchase....now the gold stocks, since they generally lead the metal, might be ready sooner than later.Gold stocks don't typically bottom until they break BELOW the 65 week MA support line (plot on the HUI).Guess what? the support line was broken this past Friday and I believe today we saw the final "washout". Since 2004, there has only been 3 breaks of the 65 week line and each time it has lead to a "V" type upward move. If there were a serving on a GOLD platter forthcoming (much like what we saw with the financials couple weeks back) this is it IMHO. Do your own DD of course...this may take another few days to set up, but if history repeats, it's a golden opportunity in the making.
Man, tough crowd. My serve?! I'm serving them up on the blog every night. INTU and PFE are great but I prefer the monster move in SHLD. There was even plenty of time to hop on the train this morning. The next squeeze will be in CALM...I'm stalking it for a re-entry tomorrow. Regarding gold, what stocks would you trade? I just pulled up GG and that freefall put a hole at the bottom of my screen.
SHLD was a definate monster. looked at that last night but didn't think it had that much gas...you seem to know this one and LEH well and it shows. I'll follow your lead on CALM...what strike(s) r u looking at? what price objective? think of gold stocks like what some of the financials and airlines looked like a few weeks back...I don't think the charts are going to matter, but my two favorites have always been ABX & NEM (the strongest in the group). These two are probably somewhere near the bottom of your screen as well. Thx for your hard work and sharing your input.
I'll keep ABX and NEM on the radar. However, I think that if gold bounces, so will energy/commodities and I'll catch a bigger move trading those stocks. Regarding CALM, I'll probably go with the Aug 35's and pyramid with the Aug 40's. The close above 40 is bullish but it needs more volume.
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