Market Curiosity: Exploring Markets And Systems

January 19, 2011

Bought Feb puts on AZO -71%

Filed under: -50 to -74%, Long Puts — Tags: — Jeff Fitzmyers @ 9:31 pm

Bought Feb 240 puts for $2.75.
Exit if price closes above 34 EMA.

I have no idea if this is the start of a trend down in general.

Of the 23 times $SPX has gone at least 30 days w/o a 1% drop, coming off a 52-week high, it was higher 3 days later 74% of the time. — Tweeted Jason Goepfert of today.

But I do expect the very over bought stocks to roll over a bit at some point. FFIV is down 22% after the close. I keep attempting to catch some of these but have so far not. Let’s try again:

Book value / share -18. Huh??
– Both insiders and institutions have been selling.
– Was an IBD Top Stock and now isn’t.
– 6 distribution days in the past 4 weeks.
+/- Sitting on the long term uptrend line. If price drops below that it should go to the 170 EMA which is about 230. So I picked a put half way to that possible target.
– The weekly RSI is > 70 which can mean a reversion to the 170 EMA.
– The monthly RSI > 70 which can mean a reversion to the lower weekly Bollinger Band at about 210.
– The 34 EMA is trending down. Another chance to short is if price goes up and kisses the EMA from below.

Jan 28: Price closed about the 34 EMA so got out at $0.81 -71%

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