Wednesday, March 3, 2010

Added to Short MON

Trade: Long MON April 2010 $75 Puts - 2 more contracts at $3.85 each, overall cost basis per contract now $4.82 (total position 4 contracts)...MON was trading at $73.45 high reached 73.93...this is well within 1% of retest high.

Set-up:  25-Feb-10 set up on Daily chart on both 20D Accel bands and 30D $R.
Confirmation on both Accel band and %R on 2/26/10.

Conditions: Efficiency Ratio, Stochastics, MACD, and ADX/DMI are all very bearish.

Re-Entry: %R retest on 3-MAR-10...High of day is $74.55

Exit strategy: if 74.55 is violated.

Target for profit taking: if MON closes at or below 66.11 take 50% of position off.
This is 78.6% Fib extension from 1/6 peak to 2/5 low to 2/22 peak. Also 52 week low resistance level.

Stop loss: close above $73.30 (set-up bar's high).

Time Frame: Prepared for 1 month+  holding period.

Where found: IBD Stocks on the move Sunday 2/28/10.

Current P/L: -$470


This was very difficult as MON is now within the accel bands and this is the second up day in a row. The company got approval in Europe for selling 4 types of GM seeds. It seems to have bounced off the 50% fib extension...Regardless I put the trade on based on %R retest rules.

Stochastics, Efficiency Ratio have also retested now.  ADX remains above 40.