Sunday, March 21, 2010

DIN long

Date entry: 12-FEB-10

Trade: Long DIN Jun 2010 $25 Calls - 2 contracts at $5.50 each, added to position on 18-FEB-10 2 more contracts at $5.30 each

Profits taken: 4-MAR-10 2 contracts sold for $8.60 each, 16-MAR-10, sold 1 more for $11.10...keeping last one on until %R sell signal is reached.

Set-up: 11 -FEB-10 %R and accel band firing at same time. Added to position on %R retest...retest occured outside of bands. DIN didn't close inside bands during retest. DIN is in a strong group.

Conditions: Efficiency Ratio, Stochastics, ADX/DMI are all very bullish..

Exit strategy: %R sell signal

Time Frame: Prepared holding months.

Where found: Stocks on the move

Best trade of the year for me hands down so far. I got in on this ealry in the February rally. I noticed that the restaurants as a group were moving and many had reported stellar earnings. DIN had yet a few weeks to report earnings. It also had a long base forming and the breakout put it above the accel bands and above a trendline of resistance on a longer term scale.

Either case, it retested, but never closed inside the accel band, I added to the position at that point. I have since gotten more than a double and am riding the last contract until a %R sell signal is in place. this has been outside the accel bands for over 1 month and a half at the time I am writing this.

Daily Chart below.