Doctor Jack's Stock Medicine

[Jack Haddad]

Daily chart showing possible double top. Be careful. I know you are a daytrader, and you always seem to make the big bucks, but I am posting this for any readers that might not be as smart and quick as you are

Thanks for the feedback.

[Rob]

Bought 2 blocks at 27.61 and wrote 200 July 27.50 calls for 1.40/contract

I like that one, Jack. In fact, I like it so much that I followed suit, only in terms of lots rather than blocks. I bought at 27.48 and wrote the July 27.50 calls at 1.30.

[IIC]

WHAT!!!!???? IIC sitting out as the DOW rallies 100 points????!!!!!

This confirms my Bullish Sentiment!

Well...I'm a busy guy...nothing worse than trying to day trade when you are most likely going to be interrupted and distracted...But maybe later...Doug(IIC)

[New-born baby]

Thanks, Jack!

Thanks for the feedback.

Jack,
I love the way you post your trades. And I like the way you are making profits doing it, too. Great going, and I hope you'll keep it up.

[New-born baby]

Ebay

I like that one, Jack. In fact, I like it so much that I followed suit, only in terms of lots rather than blocks. I bought at 27.48 and wrote the July 27.50 calls at 1.30.

EBAY pnf says $26 minimum for the bottom, and the chart shows no respite in sight. Prepare to roll the options!

I know I've got my nose in someone else's business, but here's a few thoughts anyway. (Rob, please don't shoot!).

1. No bottom shown on the STO, RSI, on monthly, weekly or daily chart.
2. PnF formation says it will fall to at least $26.
3. Sufficient damage has been done to the chart, imo, to suggest it will continue on down past $26 before it catches itself. Where? Probably not before $20, imho.

[Rob]

EBAY pnf says $26 minimum for the bottom, and the chart shows no respite in sight. Prepare to roll the options!

Being that I am a newbie at this hedging by writing covered calls, what would be your recommendation as to how to proceed? The next strike price downward on the July options is 25.00. So if the price drops to a certain level, I should buy to close the contracts I wrote and then sell the 25's?

[New-born baby]

Being that I am a newbie at this hedging by writing covered calls, what would be your recommendation as to how to proceed? The next strike price downward on the July options is 25.00. So if the price drops to a certain level, I should buy to close the contracts I wrote and then sell the 25's?

I mean no offense by this post: it is supposed to be helpful.
Yeah, let's say you accept my TA on my previous post. You think EBAY is going to work its way South, and it will not be called away at $27.50. Here is what I would do RIGHT NOW:

EBAY is currently $26.98 You paid $27.41.
1. You sold the $27.50 calls for $1.30
2. I would SELL the $25 strike at 2.55, which guarantees you a small profit of .14 per if EBAY is above $25 at expiration.
3.I would cover my $27.50 strike at $1.15, and that would give me .15 per share profit.

Net: $.29 per share. Beat losing $5 per share.

I would also kick myself for not buying a bulllish chart, and make a promise that I would never buy a chart that wasn't bullish in the future.

[Rob]

I'm betting that it's near the bottom. If I lose, I lose. The same way anyone would lose by buying a stock that's going up and then reverses.

If I thought it was headed to the 25 level, then I should have shorted it and bought the 27.50 calls as a hedge. But 25 is another 7% lower from here. Sure it could happen, but my best educated guess is that it won't.

[New-born baby]

I'm betting that it's near the bottom. If I lose, I lose. The same way anyone would lose by buying a stock that's going up and then reverses.

If I thought it was headed to the 25 level, then I should have shorted it and bought the 27.50 calls as a hedge. But 25 is another 7% lower from here. Sure it could happen, but my best educated guess is that it won't.

You may be right but. . . well, I called old Jack in prison and asked him what he thought. He said, "I think old EBAY is toast. They wanted to merge with IMCL when I was CEO, but I refused because, simply put, they have nothing to offer." Best wishes with it. I am not trading it at this time.

[Rob]

I don't know who "old Jack" is whom you refer to, but you guys who look at charts and nothing else crack me up. Do you know, for instance, that last quarter eBay's revenues were $1.4 BILLION dollars? 40% higher than the same quarter in '05? Do you know that new listings last quarter grew 33% over Q1 '05 to 575.4 million? Do you know that there are now about 193 million registered users? a 31% increase over Q1 last year? So ... what? Are people going to stop buying stuff on eBay? What's the likelihood of that happening anytime soon?

Hey, I know that the market can be irrational. It is my belief, though, that it's easier to take advantage of the market's irrationality by paying attention to fundamentals of a company that's selling pretty cheap, even if the chart looks bad. EBay is oversold, IMO. In fact, I'm really tempted to cover my July calls that I sold (The bid on 'em right now is 1.05) and just hold the stock.

[New-born baby]

I don't know who "old Jack" is whom you refer to, but you guys who look at charts and nothing else crack me up. Do you know, for instance, that last quarter eBay's revenues were $1.4 BILLION dollars? 40% higher than the same quarter in '05? Do you know that new listings last quarter grew 33% over Q1 '05 to 575.4 million? Do you know that there are now about 193 million registered users? a 31% increase over Q1 last year? So ... what? Are people going to stop buying stuff on eBay? What's the likelihood of that happening anytime soon?

Hey, I know that the market can be irrational. It is my belief, though, that it's easier to take advantage of the market's irrationality by paying attention to fundamentals of a company that's selling pretty cheap, even if the chart looks bad. EBay is oversold, IMO. In fact, I'm really tempted to cover my July calls that I sold (The bid on 'em right now is 1.05) and just hold the stock.

OLD JACK, to whom I was referring, was Martha's friend from IMCL. What was his name again? Jack Hasbro? Or was it Jack Mattel? Man, I can't remember. Anyway, it was supposed to be a joke. And whatever the FA is, I don't know because I never look at it. But Spike says that "charts don't lie." So I always make an effort to follow the chart.

But I do wish you the best with EBAY.

[DSteckler]

EBay is oversold, IMO.

That's what they were saying at $40, $35, $30....

[New-born baby]

That's what they were saying at $40, $35, $30....

. . . $27.50 . . . .

My question to you, Mr. Robert FA: WALMART. Are their sales increased yoy? Then why has their chart formed a ten year descending triangle, (which broke to the South, by the way), and the stock price tumbled? Probably because the industry is mature. Question: is EBAY a mature stock?

[spikefader]

...you guys who look at charts and nothing else crack me up...

One day you may turn into a believer dude, but even if you don't I'll still think you're huge . But do yourself a wee favor and at least absorb all the TA mumbo jumbo stuff while you're trading with your strength of FA. Just quietly, EBAY is a no-brainer short bias that's searching for support, and doin' all things bearish. Trend is friend, chart no lie, TA says wait. Ya got the bearish island candle in April, gap down on volume thereafter, exhaustive gap up in late May and today's candle looks like it'll meander down to 24.50 in the weeks ahead and may be at 18.00 before you know it. Ya got weekly and daily money flow that sucks bilgewater, ya got the bearish parabolic trend on get this: the quarterly, monthly, weekly, daily, hourly, 30-min, 15-min, 10-min, 5-min, 3-min, and 1-min! lol No kidding, all of 'em! Now, don't take much notice of those under 60-mins for swing trading....but the point is the trend is down, with money fleeing. So with that picture, why even bother looking at EBAY's fundies when there are so many great and bullish charts with great FA as well? TAers may crack you up, but what about the FA/TAer's...they gotta be clever don't they If I weren't so strong on TA I'd definately look at merging FA too. But frankly, TA works great and it's a whole lot less work once you know how to read a chart well. Best to ya!

[New-born baby]

One day you may turn into a believer dude, but even if you don't I'll still think you're huge . But do yourself a wee favor and at least absorb all the TA mumbo jumbo stuff while you're trading with your strength of FA. Just quietly, EBAY is a no-brainer short bias that's searching for support, and doin' all things bearish. Trend is friend, chart no lie, TA says wait. Ya got the bearish island candle in April, gap down on volume thereafter, exhaustive gap up in late May and today's candle looks like it'll meander down to 24.50 in the weeks ahead and may be at 18.00 before you know it. Ya got weekly and daily money flow that sucks bilgewater, ya got the bearish parabolic trend on get this: the quarterly, monthly, weekly, daily, hourly, 30-min, 15-min, 10-min, 5-min, 3-min, and 1-min! lol No kidding, all of 'em! Now, don't take much notice of those under 60-mins for swing trading....but the point is the trend is down, with money fleeing. So with that picture, why even bother looking at EBAY's fundies when there are so many great and bullish charts with great FA as well? TAers may crack you up, but what about the FA/TAer's...they gotta be clever don't they If I weren't so strong on TA I'd definately look at merging FA too. But frankly, TA works great and it's a whole lot less work once you know how to read a chart well. Best to ya!

Great post, Spike. And Rob, you are a great guy, so please don't take any offense from anything I post. I am just kiddin' around with you when I talk about Martha, etc. But I really do think you'd be happier if you covered up that EBAY play with some options. I hate to mention . . . but I will. I warned our friend Jiesen about not taking MFLX long at $50. But look at MFLX now. And Jiesen is a great guy, and very sharp FA, too. But FA fails when your information doesn't match the INSIDE information.