Market Curiosity: Exploring Markets And Systems

January 10, 2011

Long DECK +13%

Filed under: +06 to +25%, Long Calls, Mistakes — Tags: — Jeff Fitzmyers @ 1:30 pm

Buy: Mar 80 calls for $646 each.
Stop loss: Close below the recent lows near 77.

+ Tested yesterday’s low and then rose above the 5 EMA and the down trend line.
+ In the past 5 weeks there have been 5 accumulation days and only 1 distribution days.
– Weekly CCI is declining, but since this is a momo, the price breaking above the 5 EMA and trend line is more significant. And the weekly CCI is a lagged indicator.
+ Short interest is about 13%, enough to get a provide upward price pressure if they cover.
– The weekly RSI is > than 70. So if there is a sharp reversal, get out.
+ Volume today was good enough.
+ Overall DECK recently rose from about 50 to about 85. That’s rather tame by momo standards. It has more upside if it wants.

The options were actually entered by accident. I am learning to set alerts that will trigger options and messed it up. So options were bought at the market. Opps! Things were looking okay so I decided to keep them. Most of the time if I make a mistake I just “get out” very soon.

UPDATE: Jan 14th: Sold position since it was acting sluggish.
– This is the 3rd up day with good volume and the price has not made much progress.
– Did not really close strong.
– Short interest is 13%.
– Price could easily correct and then we would sit through a drawdown or worse if the market itself corrects.

Jan 22: Good thing the position was closed! Options now -57%.

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