TIME TO BUY BACK TQNT OPTIONS

I am seeing TQNT hit an area of a potential buy back.  Hence, I am looking at buying back the options that were sold a few weeks ago.  I originally sold the contracts for an April, 2011 expiration at $12.00.  These were for $3.00/share or $300 per contract since an option contract has 100 shares in it.

I have set a limit order to buy back the options at $1.00/share which would be a 66% gain. 

CLOSED OUT A WBD OPTION TODAY

I purchased WBD at @ $24.34 on 11/10/2010 and have watched it rise to $32.65 as of today.  Of course I have sold options across this whole time frame.  As of today, I have gained 33.77% on WBD.  A call option that I sold in early Jan. has now become profitable and my indicator is telling me to buy it back as of Friday.  So here is the transaction:

01/06/2011 Sell to Open 3.0000 WBD 04/16/2011 30.00 CALL WIMM BILL DANN FOOD $30 EXPIRES 04/16/11
Details $4.47 per share (That is $1,338.71 back into my account after commisions)



02/28/2011 Buy to Close 3.0000 WBD 04/16/2011 30.00 CALL WIMM BILL DANN FOOD $30 EXP 04/16/11
Details $2.75 per shares (That is an expense of  -$836.22)

So if I sold a contract for $1,338.71, then bought back the contract for $836.22 giving me a profit of $302.49.  That was for two months of waiting and a percentage return on my option of 38.5%. 

When played right options can be very fruitful in adding more money to a trading account to buy more shares of stock at the right time.

A LOT OF CHANGES TODAY

HEAT advanced through my stop loss today and so it it's out of the portfolio.  Added 3 new stocks in the past couple of days:  WBD, GFA, and added more ATPG.  

Charts to follow.

BUYING POINT FOR WBD

BEST TIME TO ADD TO APWR POSITION, UPDATED 11.10.10

APWR is in a re-buy area.  Basically this is a dollar cost average buy.  Bought more shares today at $7.30. 

11.10.10  Need to insure this trade as there is a profit. 

BUYING ATPG TODAY, UPDATED 11.12.10

Click on this picture to enlarge it. 

This trade has continued to trade higher, but I see it is time to "insure" the trade.

GLAD THIS MARKET IS IN A CONFIRMED UPTREND.

So the stocks are moving into an oversold area and the SPY continues to rise.  (Is this a pump by the US Treasury to keep the market up prior to elections then dump the market once the Repubs take over? The fall could then  be blamed on the Repubs.  That's what volume is telling me as trading volume is dropping during this rise.  Or, is this a market of no sellers because the big boys such as Goldman Sachs are holding onto their shares only to buy more once the Repubs are elected?  Damn good questions)  

I am noting that it is time to consider buying back your "insurance" plans that you should have sold a while ago.  In fact, I bought back my "insurance" plan on APWR today.  Sold it at $1.20 per share and bought back at $0.85 per share.  

I am also stalking JCG and HEAT as opportunities to buy back the "insurance."  I have set buy limit orders to close out my insurance plan.

MARKET STILL EDGY BUT I AM EXPECTING A SMALL PULLBACK

The market continues to be in an uptrend and it seems as if it will not retrace at all.  I just have to keep watching the chart and not listen to my emotions.  My emotions say go short, but I need to watch the chart and watch it go up.  I am watching the trading volume dropping off when the SPY rises which denotes a potential retracement soon.  

I have attached another pic again of the portfolio.  Notice that GIII was removed from the portfolio after a nice 30% return.  SPXU was added so look at the pic for the explanation.  (click on the pic to enlarge it)  I have "insured" all of my positions based upon my rules to do so.  This "insurance" will allow me to protect some of my profits.  

Market is still overbought. Dow barely holding 11,000.

The portfolio is still doing well, but TQNT took a hit today by going down 7%.  It still leaves a 31% profit.  It may be time to "insure" this one or to just take profits and run.  

HEAT was on fire today rising 12% in huge trading volume.  There was no news that made this stock move, but I won't complain.  Search this blog to go see my original entry relating to HEAT to see why I bought it and it may give you an idea for a future trade.  

Based upon the market being in overbought territory, I would be expecting a pull-back in the indices.  Profit taking may be in order or "insuring" your profits would be a better bet for a long-term trader.

NO CHANGES TO REPORT.

Although the market is way overbought, today it rose in good trading volume.  The volume has not been successful in over-riding the recent down volume in sideways movement.  A possible false move.

The account has not really suffered any damage in the past few days. 

AMAZING RESULTS SO FAR ON APWR AND GIII. ENTERED HEAT AT $6.10

I see SXCI as a buying opportunity.  I plan on setting a buy limit at $36.41.  Wanting the stock to rise to $40.41, I'll set my target there.    In order to prevent losing a lot of money, set the stop loss at $34.28. 

This past month has treated the account very well as evident by the pic above. (click on the picture to enlarge it). 

CHECK OUT APWR, HEAT IS IN A BUY AREA AGAIN

So I may have been wrong on the direction of the market a few days ago, but APWR way more than made up for it today.  Also a strong showing in GIII.  This makes all my positions to be in positive territory.  

I am also scanning stocks and if you haven't gotten in on HEAT, this is a perfect opportunity to do so. 

WRONG ABOUT THE MARKET GOING LOWER

Crap.  My level of resistance on the S&P500 didn't hold and we are now in a market where I am seeing stocks making new highs left and right.  This leads me to believe that we are in a market that is going to move higher.  Take for example TQNT which I bought back in may at $6.58 and more at $7.96, is at a 52 week high around $9.00 today.  SLV which is an ETF that tracks the price of silver is at an ALL-TIME HIGH!!!!.  GLD which is the gold ETF continues to push it's all-time high too.  APWR which was bought into a few days ago is slowly making some movement up.  I posted a buy point for GIVN on 7/21/2010 is finally making the move I wanted it to do.  Here is a screen shot of some current holdings. (Click on the pic to enlarge it.)

The one bad side to this whole story was I bought SPXU which is the three times the inverse of the S&P 500.  I expected the market to go down as it met resistance, but it burst through it and the S&P is now making monthly highs.  Got out of that trade early this morning. 

This is why I hate to be a fundamental trader and not a technical trader.  As a technical trader, I need to wait for the pullback and buy into this strength now.  As a fundamental trader, I would be shocked as the fundamentals of the US suck with high unemployment, low GDP, and massive debt. 

NEW SHORT-TERM TRADING TECHNIQUE

I am working on a new system that trades both long and short positions that will only be held for a week or two.  The goal is to get a 10% return on each trade while risking about 8%.  This is arbitrary so don't stick hard and fast to these numbers.

Here is the first trade on this system.  SHORT - DFS.  Click on the chart to see the explanation.

Click on the second chart to see the explanation of this losing trade.

So this one triggered my stop loss as the stock rose to new highs and knocked me out for a 4.9% loss.  That is why stop loss orders are absolutely necessary or do the technique I teach by "buying" insurance.

APWR IS IN A BUYING AREA

I was scanning my charts and noticed this one being set up for a nice run. Part of the problem is that the overall market is in an oversold area and meeting resistance. This would potentially knock this stock back down since stocks follow the overall market 65% of the time. But since this is a long-term trade, I want to take this as an opportunity to buy it. I will then place my insurance policy and have someone else pay for it. 

So the trade was entered at a price of $6.30.  The intent is to let this trade move up to the $7.30 area and begin to enter the "insurance phase."  

SPY HITTING RESISTANCE

Plan on going short near $113 on the SPY. Click on this chart to see why.

HEAT TRADE UPDATED

Scroll down to look at what I did with HEAT on 8/5/10.

HEAT trade updated again on 8/17/10.

GIVN IS A POTENTIAL BUY

I am looking at GIVN again for a long-term trade. I see it being in a buying territory around $16.00. Remember to place a stop loss order and do so below $14.00. Click on this chart to see what I am talking about.

HEAT TRADE: OPENED 7.7.2010 @ $5.50

I saw a great trading opportunity on a stock that I have been following for a long period of time. HEAT has entered a buying zone for me based upon the chart seen here. (click on the chart to see it and read the text associated with it.) I bought 2000 shares at $5.50 and am expecting a higher move. That will also depend upon the overall market too. If the S&P 500 goes down, this will most like follow suit.



Here is now a daily chart. Notice how the weekly chart above and the daily chart to the right here have the stochastic indicator in the oversold (below the 20 line) area. When both are in the same area, that should mean there is a potential for this to move back upwards soon.



UPDATE: 7.20.2010 On a daily chart, HEAT has been behaving as it should be which means upward. This upward movement was stoked by the weekly chart and the daily chart both being in the oversold territory on stochastics.

However, when you look at the weekly chart, you can see that trading volume is slowing down while price trickles higher. What a trader wants to see is volume picking up with volume climbing higher.

Plan on staying in on this trade and as of today, it is still 13% in profit.


UPDATE: 8/5/2010
So far HEAT has garnered a 20% gain for me and I see a short-term top in place so I am going to sell an August $5 covered call at $1.65.


8/17/2010
Here is the chart and why I saw the short-term top on the stock. As noted above, I sold an in-the-money August $5.00 call for $1.65. Today, I bought the contract back to close the position for $0.90. That is equivalent to $0.75 per share. This will knock my cost basis down to $4.75.

SPXU PROFITABLE TRADE

So here is a trade that followed the trading plan that I have created. I have traded the symbol SPXU that is three times the inverse of the S&P 500. That means that when the S&P 500 moves 1%, the SPXU moves 3% in the opposite direction.

I was looking at the charts on the S&P 500 and expected it to make a downturn. So, if the S&P 500 was going to go down, the SPXU was going to go up three fold. (click on the chart to see the S&P 500 daily chart).


The chart of the SPXU is next. Since the market was probably going to go down, the SPXU was going to go up three-fold. On June 22, 2010, I entered a trade at $31.65 by buying SPXU. The amazing part is that nine trading days later, the trade was exited at $38.77 for a 24.5% profit. I'll take that any day.

This is just one of the three different ways that a stock or ETF can be traded. In a second way, you can use options to keep a trade for a longer period of time, or you can always use options as insurance in the third way of trading. Don't be afraid of the word options. Options are just a way of insuring major losses in stock trading. It can be a learned behavior.