Trades: Long ABT loser... and Short CTXS

21-OCT-10:
OK so ABT did not work out as a winner. Despite some technical breakdowns, I hadn't hit my risk tolerance level in this so I wanted to see the earnings reaction.

The day of earnings announcement it opened down really big and so I held. This turned out to be the right thing to do because it was an overreaction to a decent report. In any case, this is one position where I didn't have autostops on and I actually have ceased to have those in place since I am on top of things most of the time anyway.

Then again my account access also prevented me from panicking on this position. Never transfer brokers with open positions on and not having the usernames and passwords to all the accounts you manages...that's the lesson of the day.

Anyway, I couldn't get into most the accounts to even get rid of this if I wanted to. I spent most of the day recovering passwords and having a shared office is really starting to fuck things up with me...as I can't just pick up the phone and yell at TD Ameritrade when this type of shit hits the fan.

In any case I got rid of the ABT in most of the accounts (still holding in the taxable as this is the one that is being transfered at this juncture).

Sold 16 contracts today for about $1.00. Sold 12 yesterday for 0.90.
$2,200 loss...SHIZEN

And I still haven't got rid of the ones in the taxable account.

13-OCT-10:
So as part of my scans and needing a short I decided to work on CTXS as a short today. And ABT retested early this morning from yesterday's breakout...so I decided that was a good long to put on.

Unfortunately, I was a bit overzealous on both these plays. I chased ABT and was early on CTXS.

Across all accounts I have the following:

CTXS
8 contracts of Nov $65 Puts for $9 each.

This is twice the normal position size but it is the only short I have on vs the other longs...and I am quite confident in CTXS going down down down...In the daily chart there is a gap back in July post earnings that should get filled on this fresh new downtrend. I see it going to $49 but I don't know if that happens tomorrow or the next day (or at all really).

These are 70 delta, plenty of time for that to go higher. I also chose these due to the high open interest.

ABT
38 contracts of Nov $52.50 Calls for $1.75 each...

I chased these a bit as I tried to get filled at 1.60 then at 1.65 and it kept going...until of course a little pull back happened...but nonetheless I see ABT going to $55ish and we should get a good 60% gain on these calls if that happens.
These are a 60 delta but we have lots of time so I decided it was worth the risk. I also chose these due to the high open interest.

Charts:
CTXS

Daily:

HR:

ABT
Daily:

HR:

Trade: Long TSL...loser

8-OCT-10:
A fat finger and a little help from the market reduced the overall loss on this trade. I was placing limit orders in to sell at $4 thinking the morning gap would sustain itself into a rally where I can make a decent buck on this...well it triggered a market order at $3.60...In any case I got out of some at $2.70 and some others at $2.80...

Overall total loss was $750...this doesn't sound so bad except when you think that I at one time was looking at $2250 in profits....

This was a shitty trade in only the fact that I did not get out when the going was good...

I keep saying that I learn this lesson, but it is clear that I have not yet learned this lesson.

Getting out of a good trade is an extremely difficult thing to do I have to unlearn the "let your profits run" shit that is in my head.

That discipline is something I will be employing moving forward by simply taking the profit at 30%....if you think about it most of my positions wind up being about $6000 in size (accross all the accounts)...a 30% profit is $1800...that is well within my realm of happiness...If I can keep my losses to 15% this puts me at a nice 2 for 1 risk/reward scenario on every trade...I can make that better by taking 10% losses...but volatility would create many more loosers for me with such a tight loss point.

In any case, regardless of the situation (except when its Headley and Lang calling the shots)...I will be taking 30% profits on my trades.

I must do this. I simply MUST DO THIS.

30-SEP-10:
Yesterday TSL took another step towards the sun and broke out pretty heftily. It then proceeded to fade into the close. The last hour presented a %R retest. Now on the hourly this can cut both ways. You can get lucky and %R retest holds, or you can watch as CCI painfully gets retested...or DMI or whatever.

MCP was one of those situations. I got in on CCI retest thinking I was high and mighty and boom got pasted.

Anyway enough MCP. TSL is a better trade already...in good TSL fashion it promptly gaped up this morning and has been hovering at these heights since.

The retest on %R has held ($28.84), this actually happened outside the hourly bands...a good trait for any retest. Today it retested again towards the 13 hour EMA...That green line just keep supporting or dissing stocks I love it.

Across all accounts I have 18 contracts of the October $26 calls for $3.20 each.

Let's hope this works out better than MCP..I can make up for MCP with a $2 appreciation in this one...that's like cheesecake for TSL.

Charts:
4hr

1hr

A few recent trades

OK. So Bob Lang got us out of ADBE for a decent 40% win just before they released earnings and took a nose dive...Thanks Bob.

So far in the Month of September every single trade Bob Lang has posted as part of the Grand Slam service has been a winner however slight or large....He hasn't posted many new trades and currently we are holding some HAL, QLGC, and NVDA calls.

Headley's Sniper service hasn't been as lucky with a few loser like SNDK but overall these services have pumped the accounts decently.

Just 2 days ago I fired off a trade on some MCP calls based on a retest...well the retest kept going. It caused some serious pain as it broke through some major technical stops (CCI 0 test was about the only thing that held on the hourly)...on the daily thought it was a bend don't break scenario....well my money management stops had also been triggered and I was in meetings all day so I took a loss bigger than my normal loss...this was hard because that bottom level held and of course it has been rallying ever since.

So big loss was taken and there isn't much to say about it except it was a tough trade, I almost toughed it out and at the very least I didn't panic at the bottom.

I put my order in for a higher price waiting for a rebound in the selling...bought them at $5.50 sold'em for $3...this sucks...but that's the way it is. I had to exit based on my rules...

In this case I should have put some trade triggers in but that would still result in a sizable loss....anyway the accounts all suffered about 2.5% losses on this one...or grand total of $2250 loss.

Trades: Short EEP and PCG...both losers

30 SEP-10:
OK enough laziness..I need to update this blog not just for y'all but for myself.

I gotta say that since I turned over most of the trading to the good people at Big Trends...I have gotten lazier about this blog...

Anyway EEP was a looser. my stop was triggered on September 20th for $2.00 per contract. This was an $0.80 per contract loss. Fairly painful. But EEP kept going higher and higher...so I was right to put that trade trigger in during my travels.

Both of these had tripped technical stop points well before I got out of them. In EEP's case I got out soon after the technical stop was

PCG I just got out of today for $4.60 each. For a minor loss of 0.90 per contract (fewer contracts than EEP that's what makes it minor). Across all accounts this was a $630 loss. Easy to bear.

Now I held PCG because when it broke the technical stops on the intraday charts...it never closed the gap on the daily chart, and it never confirmed closing over the 13 day EMA...Also there was a big dividend coming so I knew that once that came through we would have a drop...so patience led me to hold on until the loss was really miniscule.

Charts:
EEP Daily

PCG Daily

14-SEP-10:
I have been trolling for shorts in case the 1130 area holds on the SPX as the top of the range (again). Also being net long is a bit nerve racking, especially as we are headed into resistance and we are a bit overbought.

Anyway EEP and PCG both fit the bill, both had heavy volume downside moves recently, and today both were retesting on %R at the hourly level.

I picked up October $55 puts in EEP for $2.80 each.

I picked up October $50 puts in PCG for $5.50 each.

Both had decent open interest and good bid/ask spreads...not super duper great...but good enough to trade for sure.

Charts:

EEP
4hr:

Hourly:

PCG
4hr:

Hourly:

Trade: Long ARST...loser

7-SEP-10:
I actually exited this position on Friday. After beating earnings ARST didn't go anywhere and got taken down a bit. In any case, my stop was taken out right at the beginning of the day and I had to leave the position. $200 loss.

1hr chart:

2-SEP-10:
I put on a really small position (1 contract Sep $32.5 call for $6.10) in ARST yesterday afternoon...This was based on the recent spike in ARST which came on massive volume. Also all hourly signals fired that fabled day.

ARST reports today after the close which they will divulge details of them putting themselves on the auction block. I am not happy with the open interest in the options at this strike but the delta etc lead me to choose this one.

Anyway it was near the CCI retest low when I picked it up and it is holding that low...

Let's see what happens:

Daily:

1hr:

Update Trade: BKC Long Calls...loser

3-SEP-10:
I wanted to put down my thoughts on this one more time. You may or may not have looked at this chart since I left this trade (but I will post it after this update anyway).

Remember, I entered this trade for various reasons, but the primary reason was that there had been a massive spike in options volume in the October $20 strike that continued over a few days as the underlying got faded. It had matched technical indicators on the hourly chart.

My main mistake on this was probably my choice of trade. The technicals deteriorated rather quickly and i followed my discipline and exited for a small loss. This was prudent for the next few days...and discipline is discipline.

However, what I should have done is go right along with the whale that was picking up these options in the first place. I shoudl have simply defined my risk differently. Instead of getting a higher delta position and stopping myself out if it reached my risk comfort level. I should have simply picked up the out of the money strike calls and put up money I was willing to loose and then just forget about it.

So instead of buying 10 contracts in the 90 delta strike for $1.15...I could have 1. waited for CCI retest, 2. gone with the October $20 strikes paid about 0.60 each contract and bought only 3 or 4 contracts as a "lottery ticket." Simply said..if this whale is right...then I get to ride with him. If he is wrong...then I loose what I would have lost anyway...

I for one will start looking for these types of scenarios a little more closely...the setup here was fairly clear...very high volume in the underlying accompanied by very high volume in the out of the money options.

Anyway here is a chart to enable me to make a shitload of money the next time I see a similar situation...or at the very least...loose the same amount of money.

There are few things more painful than watching a great call fullfill its prophecy WITHOUT being on board and imagining the money you would have made if you were...this is an incredible lesson in matching strategy to the situation and matching risk to reward...but just matching the risk is important enough..

Every trade should begin with the same statement "I am willing to loose X on this trade" I have various ways of making this loss occur and you should always find the way that matches the risk and maximizes the reward at the same time as leaving you in the trade....stay with the trade in this case was more important than the technical breakdown in the stock....because the whales were telegraphing the potential of a takeover...and they were giving you the basic price...If the whale was willing to spend a shitload of money on a strike that was way out of the money...even if it came close to $20 he would profit handsomely.

Anyway its a wonder that the SEC doesn't investigate these types of shenanigans...this was blatantly obvious that someone knew something about this LBO. 

Painful Chart:

27-AUG-10:
This morning BKC violated a retest on CCI. I exited for 0.95 per contract or a loss of 20 cents...$200...I am being very aggressive on defense here on a long that will probably work out...but the market is not really happy looking right now and longs are really hard to justify being in. BKC has a long term down trend in place and fighting that is tough to do.

Anyway I should have waited a little longer to get into this in the first place. Instead of %R retest...I should have waited for a CCI retest. One flaw on this was that DMI difference never went above 30 so that move on Tuesday wasn't confirmed on DMI Diff...so that may have been the thing that should have kept me away. I let the news about the high options volume cloud my judgment on this one...that whale buying calls in October has a longer term time horizon and a lot more money than me...so he wins...

17.25 was support now it is resistance so that's that...had i waited until this morning to enter I would probably still be in this trade and that is a lesson I will probably end up learning with this one...patience and waiting for that CCI retest is the lesson here...when trading the hourly that's what I needed to do.

Chart:

26-AUG-10:
As per last night's post, I noticed that BKC had triggered a buy signal on the hourly...I didn't really look at the news until this morning...from flyonthewall:

Burger King is recently up 44c to $17.33 . BKC October 20 calls have traded 234 times on contract volume of 20,620 contracts, above its open interest of 15,300 contracts. October calls are trading at 50c above its theoretical value of 18c according to Track Data , suggesting traders paying expensive prices on the expectations of an upside move.

Indeed, and the action continues this morning...this time in the September $20 strikes.

Anyway...I waited for a %R retest and got in to the October $17.5 for $1.15 each 10 contracts...Let's see what this whale wants to do with this company.

I am busy with work...post charts later.

Trade: NFLX Long Calls...Loser

24-AUG-10:
Update Looser trade and it was a big one sold for $8 for a loss of $1040. I didn't follow the signal that was saying to exit yesterday and this cost me about $600.

Stupid stupid. Bad Bad. In any case, while I almost made up for it with GOOG, this is unacceptable and I simply should not have traded this given the system was giving only daily signal and the hourly was very range bound.

Lesson learned and this is the first time in a long time that I didn't have the discipline to cut a loss properly.

21-AUG-10:
I was looking at NFLX on Thursday as it had retested on Wednesday and rebounded nicely on Thursday.

Then Friday Headley came across with an alert not to trade but some picks for the coming week (they included long BIDU and Short RIMM). Anyway that gave me the confidence to pull the trigger (silly as that sounds).

Picked up a couple of Sep $120 Calls for $13.20 each (2 contracts). Only in the taxable account. I had chased this a little bit but that's OK. Price's target is $140 on NFLX.

I am thinking that I should have picked these up across all the accounts but I didn't...oh well.

Anyway let's hope for the best here.

Charts:

Daily:

4hr:

UPDATE: Trade: Short FIS Sep $28 Puts - Loser

18-AUG-10:
Got filled on the others at $1.50...of course it is going down now.

17-AUG-10:

Another loser here. Unfortunately, my stop got taken out on the 4hr chart and I had to exit this trade. The problem was that I was unable to get my $1.50 offer and wasn't able to exit entirely from the trade in all the accounts. Currently, the taxable and my sister's IRA are still holding this issue, the other accounts I unloaded for $1.42 or $1.43.

I had purchased some of these in these accounts yesterday using a retest as an opportunity...So the Cost Basis was $1.78 on these still, not a good loss to take 36 cents per contract and I was holding quite a few.

Trade triggers were fired as the Bid hit 1.45...my offer was $1.50 and it didn't even come close to getting filled at that price...I was battling for bids at the $1.42...got a partial fill on my sister's account at $1.43....good for TD...bad for me...gotta get the rest filled tomorrow...probably into a shitty tape.

In fairness, this did violate %R on the 4hr chart by a penny but this violation occured outside the bands...and most other indicators were still in sell terroir...So I held thinking this wasn't a good enough reason to sell and my risk hadn't been even close to being reached.

Anyway...charts:

Daily:

4hr:

12-AUG-10:
Despite being at some level of support, I feel that somethings have technical damage sufficient enough to trade to the downside. This is true in all markets...there are stocks that are rallying today (e.g. BVF). There are also of course things that deteriorate.

FIS seems to be one of those stocks at this point in time. I am much more apt to trade these higher volume names now with respect to trading options. In this case the September $28 puts are attractive from both a delta, price and liquidity perspective.

Cost basis is $1.80.

Charts:
Daily:

4hr:

UPDATE Trade: ARMH long via Calls - Loser

UPDATE: 3-AUG-10 thanks to a gap down yesterday, ARMH triggered my sell order. I got lucky with an intraday rebound that hit my target exit price. I got filled at 2.70, 2.75, and 2.80 depending on the account.
Loss ranged from $177, $378, $440 depending on the account. Stops are stops. Luckily this gap got semi-filled and allowed my order to fill..otherwise the losses would have been bigger.

Nonetheless, the only warning sign this gave was a %R violation...but that violation occured outside the Accel bands, since I need 2 signals to fire, I didn't panic over that. Also yesterday's gap was based on a Market Perform initiation by William Blair. 13 day EMA was held at the end of the day.

Charts:

Daily:

4hr:

28-JUL-10: So a nice leader of the IBD 100 retested outside the bands yesterday and I decided that it was worthy going long ARMH.

Went with Oct $12.50 calls at a cost of $3.29 (yeah I somehow got filled at that price with a limit of $3.30)...all my options trades of late have been as close to 90 delta as possible so that my ATR position sizing formula works to some extent even with options...so I dont get stopped out prior to the actual stop on the stock like UL...(PS I re-entered UL in the taxable account today since it retested...the retest was inside the bands but it demonstrated support at the 13 EMA)

In any case charts follow.

Daily

4hr

UPDATE Trade: RDY short via puts - loser

UPDATE 31-JUL-10: Got stopped out with the trade triggers. This was largely due to the wide bid ask spread on these puts. My triggers are based on the bid...I wish I could enter them based on the mid (please look into this TD). Regardless, you trade illiquid products and this is what you invite.

Sold 5 contracts for $5.80 each, loss of $350. Tough, but not that bad...

%R is still intact.

Charts...

Daily:

4HR:

26-JUL-10:RDY retested on Friday and I decided to pull the trigger on some puts...these weren't very liquid yet I got decent fill prices.

23-JUL-10: On the taxable account picked up 5 of the Sep $35 puts for $6.70, in the IRA and my sister's IRA I picked up 3 of these for $6.50 each.

Current stop is $28.95

Psychologically this wasn't very easy since the SPX was breaking 1100 and further confirming the rally...so being short isn't fun during a rally. However, RDY had reported crappy earnings the day before and it sold off pretty hard on that news...so Friday's action was a classic short covering retest...plus it was a fresh breakout below the bands and confirming on %R at the same time...so this retest gave me confidence to trade it.

Charts:

Daily:

4hr:

UPDATE: UL long via calls

UPDATE 31-JUL-10: Exited at the $6.20 price. For a loss of 70 cents per contract. Had 8 contracts...loss of $560

UPDATE 29-JUL-10: Yesterday I went long some more calls based on %R retest of UL. So I had another $6.90 per contract on the line. Today UL got massacred and these contracts are at a mid of $5.95. The share positions I had got exited at the defined loss ($140 and $254) due to trade triggers. However, the calls are really in pain now. I tried but failed to exit today at a decent price. Tomorrow I have to unload these.

Charts:
Daily

4hr

UPDATE 19-JUL-10: Trade triggers fired today and caused automatic exit in the options positions...for a loss of $192 in taxable account (I somehow get filled at $6.46 with a limit of $6.20...kudos TDAmeritrade..you won't see these words printed here often).
Other accounts suffered the $6.20 fill.

So losses ranged from $150 (my Roth) to $300 (my IRA)...Strange my sister's IRA had the same trade trigger and it didn't fire...wonder why...but I am glad it didn't...let her account at least have fun with this trade.

UL closed today with a %R back at 83.44 and above the accel bands.

Equity trades are still on...so more updates to come....

Lesson here was too a tight stop and I think with some options I should put the bid and limit price further apart...
so here I should have said when the bid is $6...sell at limit $6.20...what I need to do is look at the options chart and figure out its own ATR...THAT'S AN ARCHIMEDES MOMENT...I'm gonna go run around town naked now.
16-JUL-10:
Outside the band retest noticed intraday.

Again, used ATR to determine position size here...this is new for me and I am hopeful it works.

Calculator came up with

8 contracts of the November $22.50 call...Entry price is $6.70

Stop is set at $6.20

This is tight and it is due to the low ATR on UL...

So here is hoping this takes off like a rocketship.

Market was tough today big drop, 2 yr treasury yield hit an all time low...yes all time low...As a contrarian I consider this bullish for stocks bearish for bonds...but everyone says how bonds are under-owned and the bull in bond land is far from over...anyway not good for stocks for sure.

BVF did great thanks to an upgrade...so the folios were all performing decent.

Daily

4hr

Trade: CIB long via calls...loser

I didn't get a chance to update my trades yesterday. But I have a few losers in the accounts now...

One was just entered today and it was rapidly a looser. CIB. Went long at the open based on the %R retest. I want to blame this mainly on entry and lack of stops put in place. However, no matter what the price I would have been stopped out today based on Headley's methods. Also, I wasn't at the computer today so that wasn't wise. Plus I had hoped to get in at the open instead of doing what I prefer and waiting a little bit to let the open dust settle a bit and finding decent prices prior to getting into a trade.

I haven't started putting trade triggers on all my orders to automatically stop my out. After today that is going to change.

Anyway enough of this self flogging. The money speaks for itself. Bad job Jorge. It is that simple really bad job.

CIB - Oct $50 Calls cost basis...$10.70...sold at $8.90...loss of $1.80 per contract and I had 3 of them...so $540 down the shitter.

Of course tomorrow it will add insult to injury and go higher, since it held the 13 day EMA...I am certain of this. 

Charts:

Daily

4hr

ITUB: UPDATE...loser

UPDATE: Stopped out 16-JUL-10 at 20.46 for total loss of $430.50 which was the defined risk I had placed prior to this trade. Trade trigger worked great and I am happy with the execution of the trade...of course this was a breakout and I rather play retests...this is yet another example of why I like doing that...breakouts get faded, retests are nice low risk entry points post breakout fade...

So after my eureka moment. I decided to test the waters using a breakout and using ATR based position sizing.

Based on an ATR (20 period) of $0.70 and my calculated risk tolerance of $430. I determined I could get 615 shares.

Entry point was $21.16

Stop is placed at $20.46

I will use the 2 for 1 method of profit taking here...I will halve the position at $21.86 and leave the current stop in place. This effectively gives me a free trade if I am right....if I get profitable, then I will keep riding this until the exit on %R is apparent (OR should I wait for my trusty 13 day EMA idea to pan out?)...nah I will stick with %R

The setup on ITUB was a breakout on %R and Accel bands confirming close in time. My buddy Shilpi gave me this one so I have him to thank either way.

Charts

Daily:

4hr:

Need to exit another one: CRI

UPDATE:
Exited for $8.30 per contract...this resulted in a minor loss of 10 cents per contract...However, here is where I messed this up. I didn't employ money management ideals in this trade. I was still well within my total risk tolerance. The 13 day EMA was breached however not confirmed, however this is not my primary indicator %R is and that was violated...so I did the right thing based on the indicator...but I hadn't reached my tolerated risk level on this trade (this means I got in at a great price). The 13 period EMA is really starting to become my favorite indicator...Over many of my trades I notice that if I use the 13 EMA as a stop with a confirmation bar requirement I could have saved myself some money...in this case I would still be in this trade...as I would need a 2nd close above the high of the bar that closed over the 13 EMA on the daily...

Such is life.

So CRI was a retest that i enjoyed seeing paper profits of about $250 disappear on. That always sucks but as Tim Hilliard says, "you always leave hot dogs in the cooker."

This violated on the 4 hr before violating on the daily but because volume was soft I thought would wait for the daily chart signals. Plus actual capital loss wasn't that bad.

I will exit this Monday morning and update the post with actual numbers. Again on the daily the 13 EMA is not even close, but it has been breached on the 4hr...also on the 4hr the indicators are turning less bearish.

Charts:

Daily

4hr

Update on a trade: HS

Why only yesterday I put HS into the taxable account.

Here is my rational for getting into the trade in the first place:

Short:
Bought 5 HS Aug 21 2010 20.0 Put @ 4.7

I picked this up in my taxable account today. This was something that popped on my scan on Friday. A short retest outside the bands. This is my favorite setup. I did this only in the taxable account because in this account I had missed the CRI trade in this account due to my phsycological crapping out...so I went for the next best thing which is shorting HS. I noticed Friday that this was not the only health care insurer that had this retest phenomenon, AET, UNH, also exhibited this behavior. So the sector is in trouble. However, my psychological issues right now are that we are long in the tooth with the downtrend and I fear these moves are nearer to their end than to the beginning. No matter, I am trading based on the setups.

Stop is 15.55. 

Today it violated the daily chart's %R retest stop of 15.55 by closing today at 15.88. Also it has closed inside the bands...One of my favorite indicators the 13 period EMA was not even close to being violated on the daily...but did in fact get violated on the 4h...So I should exit this position...that's what the indicator's are telling me.

So I will cut out of it tomorrow. However, it is interesting to note that every other indicator is still very bearish on this stock, and just today we had another retest in the Health Insurance sector in WLP.

Today was a very bullish day for stocks, bullish breadth, decent volume, IBD called it a follow through and a new rally...So being short is pretty tough to do...The wavers are saying this was a typical 2nd wave with the big 3rd wave down still to come. Kass also called a bottom.

Anyway the HS charts are below:

Daily

4hr




Bottom Line: Sold 5 contracts for $3.90 this morning (8-JUL-10) as the market in HS ran away from me. Total loss $400 plus vigs.

Long HAS - Update

UPDATE:  Exited HAS at $2.70 per contract - $75 loss. HAS broke tightened stop of $37.76 on hourly chart on a gap down in heavy volume. Recovered a bit as day progressed but still closed under 37.76.

Date entry: 10-MAR-10

Trade: Long HAS April 2010 $35 Puts - 5 contracts at $2.85 each,...

Set-up:  10-Mar-10 set up on Hourly chart on %R retest.

Confirmation on both Accel band and %R on 2-MAR-10 at 10 AM

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

Re-Entry: none

Exit strategy: if 37.48 is violated on hourly chart.

Target for profit taking: when position reaches $500 profit

Stop loss: close below $37.48 (%R Retest bar's low).

Time Frame: Prepared for 2 weeks  holding period.

Where found: Sizzle index

Current P/L: $200

Emotions:

This was very difficult as HAS has been in an uptrend for a few weeks..with no retests on the daily chart and very few retests on the hourly chart. No news. This is in essence a short term trading not necessarily a day trade but very short term. Also these are closer to being at the money rather than very deeper in the money.

Added to WCG Short - Updated

UPDATE: WCG closed at 29.89, Exited position for $1.45/ contract... loss of $1.80 per contract on an average basis...$1080 loss on 6 contracts on IRAs, and , $900 on 5 contracts in Erin Roth.

Trade: Long WCG April 2010 $30 Puts - 3 more contracts at $2.00 each, overall cost basis per contract now $3.25 (total position 6 contracts)...WCG was trading at $29.29 high reached 29.76...this is within 1.6% of retest high.

Set-up:  18-Feb-10 set up on Daily chart on both 20D Accel bands and 30D $R.
Confirmation on both Accel band and %R on 19-FEB-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 $29.76

Exit strategy: if 29.76 is violated.

Target for profit taking: when position reaches 50% profitability.

Stop loss: close above $29.76(%R Retest bar's high).

Time Frame: Prepared for 1 month+  holding period.

Where found: IBD Stocks on the move

Current P/L: -$705

Emotions:

This was very difficult as WCG is now within the accel bands and this is the 3rd up day in a row. The company got an upgrade today and was called an acquisition target by Stifel Niclaus. Regardless I put the trade on based on %R retest rules. The stock gapped up and seemed to fade back down. It could be retesting the high of the setup bar, and the gap should be resistance.

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