Swn
Ninner,
ALLways glad to hear from you. I hope you are prospering in every way.
So you spent $400 to buy the AUG $30 PUT. Okay, so then let's look at SWN:
1. You've got a natural gas company here. NG is looking weak right now due to last year's mild winter, and the resulting oversupply on hand. So we are looking FUNDAMENTALLY at a weak commodity.
2. Looking at the chart, SWN has a pretty bearish look to it. PnF says she headed to the $18 mark, but warns us that SWN may not fall that far with a low pole reversal on 14 JUN 2006.
3. Here's the "weakly" chart: man, $18 looks very possible. Descending triangle breakdown and 10 week just moving under the 50 week avg.
Summary: I like your trade. You bought in the money--always smart, imho--the timing looks very good (last Thursday would have been better for a cheaper option, but still looks good); the commodity is weak--I have read where T. Boone Pickens sees $5 NG coming this winter. I like this trade. Best wishes with it
Originally posted by ninner
ALLways glad to hear from you. I hope you are prospering in every way.
So you spent $400 to buy the AUG $30 PUT. Okay, so then let's look at SWN:
1. You've got a natural gas company here. NG is looking weak right now due to last year's mild winter, and the resulting oversupply on hand. So we are looking FUNDAMENTALLY at a weak commodity.
2. Looking at the chart, SWN has a pretty bearish look to it. PnF says she headed to the $18 mark, but warns us that SWN may not fall that far with a low pole reversal on 14 JUN 2006.
3. Here's the "weakly" chart: man, $18 looks very possible. Descending triangle breakdown and 10 week just moving under the 50 week avg.
Summary: I like your trade. You bought in the money--always smart, imho--the timing looks very good (last Thursday would have been better for a cheaper option, but still looks good); the commodity is weak--I have read where T. Boone Pickens sees $5 NG coming this winter. I like this trade. Best wishes with it


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