Wednesday, September 15, 2010

Trade: Long OPEN...winner

15-SEP-10: true trader mentality I decided it was time to get rid of OPEN and take my profits...Sold the contracts today for $9.00 a piece...a profit of $250 per contract....accross all the accounts (9 contracts) that's a profit of $2250..that's more than my wife makes in a month so I am happy with that...I think that's probably a new goal of make enough on one trade to cover my wife's salary.

This wasn't a homerun but it was a good double... but I have very little faith in this rally at this stage and traders take their profits when they can...OPEN may very well keep running but I am at peace with that. I am trying to think more like a trader and less like an investor...there are multiple opportunities just like OPEN that happen everyday...So I will get on board those and get off board just as quickly.

Decided to enter into a long today despite the market being near the top of its recent range. Some stocks are simply not giving up the goose or (as in OPEN's case) looking like giving up the goose then finding support at key levels and demonstrating retests.

OPEN has been on my side radar for a while because it consistently appears on IBD's Stocks on the Move. While I have missed the ride until this point, today's gap and subsequent sell-off offered a nice opportunity for entry on a very short term basis today.

Today OPEN popped out of the bollinger bands and followed through by confirming in the 2nd hour of trading. Then the fade began and that took us until about 2PM. The hourly chart was showing a %R retest and the 15 minute chart was showing a DMI kiss in the making along with a CCI retest.

I checked this out with more scrutiny because I noticed that the options in the 50-60 strike range had high open interest and the bid/asks were decently tight...also the chart of the option itself was showing a retest on %R as well...

I then watched the action in the underlying itself as it neared the bottom of the day's action...the bid/ask spread was very wide and no business was transacting...within a few minutes they came together and the stock put in a fat green bar on the 15 minute chart.

I pulled the trigger at that point on the October $55 calls for $6.50 each...

A decent target is around $8.80 which is where these options traded earlier today prior to pulling back.



15 minute:


October $55 Call 1hr chart:

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