Skiracer's stock slopes

[skiracer]

Ski,
Could you post a possible option trade on any underlying stock that you might possibly trade? For instance, is there a trade that you are considering making tomorrow that you'd care to post for our consideration? I'd like to see it.

After your first post, I made an option play. I noticed that the GooG chart was saying lower prices for GooG. At the time, the stock was $290. So I sold two August $310 calls. The GooG chart had a shoulder~head~shoulder on the daily chart, and I anticipated the neckline break. GooG fell just like the chart said. If I held the calls until next Friday, I would have received the full amount. But when GooG rebounded Friday, I decided to trade out of my position. I sold the calls at .75 and covered at .25 for a .50 profit in two days.

Yes, that was a naked call on GooG. You may call the shrink to check my sanity.

NB,
I used to gamble for a living years ago. I would bet it all on anything I thought was a good bet. I don't do that anymore. Work to hard for it now but have alot more now than ever did then.
I don't buy options on a regular basis and when I do it's only a simple call or put to either hedge a position for protection or if I see an out of the money option that I feel is real cheap and is going to be moving towards in the money as the stock goes up. Of course it helps if you really like or own the stock with the calls. Usually with the calls it provides me with a longer term hold in a position while I'm a short term trader. So I can trade the stock either way while I feel it will be trending up over the longer term.
I know plenty of friends, wise guys, who have lost a lot of big money trying to sell calls or puts or the rest of that super imaginative option stuff. You really have to know what you're doing an in all honesty I'm not that well versed in the imagination end of it. Keep it to simple calls or puts otherwise it becomes gambling and you really have to stay on top of it intraday or you'll get wacked very easily.
Understanding volitaility an how to price options is a must to really trade in them. I would advise studying that first to get a handle on it. You can lose just as much, more, and faster with them as you can with stocks. If I see anything I feel is worthwhile I'll post it for you but please be careful.
I'm a little skittish with the long side right now and feel this correction isn't over with yet. I like CMVT and have a position in it from $25.78. I don't know what the option chain looks like right now but I was thinking of a possible longer term option on it and the tech sector in general. I don't know if I would buy that tomorrow but I like the tech sector a little farther out from here. I also like Spikes selection, SNAK, from his post earlier today. It looks very good to me an would buy it at the current closing price today, 5.35, because I like it that much but am being patient and cautious because of the markets an would like to get in at $5.10 if it pullsback tomorrow. I wasn't impressed with the action or the small bounce today. The bigger money was selling this afternoon while the retail guys were thinking it was a trend reversal off of the last 3 days correction. I don't know if there is an option available on SNAK.

[skiracer]

This is exactly how I feel about the market in general right now. Cautious on the long side and except for SNAK and CMVT am looking for shorts and other breakdowns if they setup. Here's what the Swing Trader says:





These are all examples of bearish patterns and the last three are bear flags. That top one below the SPY daily chart, SCQ media index, is not an ascending triangle an although not exactly bearish could fool you into thinking that.

[New-born baby]

Thanks

Ski,
Thanks for the option advice. I'll take it into careful consideration.
As for market direction, yeah, I'm a little skittish just like everyone else. They call it "mild fear." Now Spike says we need to buy into "Wild fear." I'll post whenever that happens.

[Lyehopper]

Ski, No options on SNAK....

Have you seen PETS? you can trade options on PETS

[skiracer]

Lye,
I took a look at PETS and I was surprised at how good it looks on both the daily and weekly. Although on the daily it seems to be indicating a pullback of some sort having recently touched the top channel line. It has been steadily trending up for sometime now and some consolidation is good for the next leg up which it should continue to do.
That last earnings report was terrific and their guidance is forecasting even better sales and a bigger customer base the remainder of this year and the upcoming qtr. I would be patient with this one if you don't already own it and look for an entry at around 10.25/10.40 area.
This is the type of situation I was talking about with options. Pretty basic stuff. The Dec. 12.50 calls are out of the money and kind of cheap. They closed yesterday at $.85 which coupled with the closing price of $10.71 yesterday = $11.56. Their $.96 out of the money, strike price of $12.50, and 3 1/2 months left till expiration. Plenty of room to grow. I like that play an it does seem that the stock will appreciate in value over that period of time. Personally I would make that play on both the stock, short term swing after a pullback, and the option also after the pullback but don't wait to long on the option as time is your enemy with them. I like the option play here better that the stock. Out of the money, $.85 per share or $85 to control 100 shares, great earnings report last time, definitely trending up, great guidance for next qtr. and remaining year. For around $850 + comm. you could control a 1000 shares, 10 contracts, in a very good r/r situation. I'll be watching this one.

[New-born baby]

Pets

SKi,
Nice option call. Now some questions:
$12.50 calls + .85 cost=$13.35 to break even on the stock.
Now the price of the option will increase with the uptrending stock (I don't know what the delta is), but that would increase in price, too.

The question: would you expect to be calling the stock, or are you simply looking for the increase in option price to profit?
Thanks!

And here's a chart so others can see: has been very bullish! Nice formations.

[mystiky]

Would love opinions on SPIR, NGS and CPTV

trying to see when is a good time to short CPTV and NGS - they are running up on the IBD numbers but so overbought here!

And also, SPIR will probably pop alot today, but it has always retraced....

thanks!

[spikefader]

Nice options discussion going. Ski is right on the money imho when he suggests waiting for a pullback to 10.25. That's how I'd play it. It's an agressive play, but the chart is looking for the 5th.

And just for the assistance of newbies, (and I haven't looked to see the options volume with PETS), options market-makers can be very tough and somewhat sneaky and manipulative with low volume stocks. I've had situations where I've had in the money current month puts and stock price has dropped over 10% yet the puts barely moved in my favor. Much depends on the time to expiration, volume of the stock and the options, the type of price action involved (i.e fast drop or spike on light stock volume, or steady heavy vol sell off) how long it stays where you are targeting, and the fear by those selling the options to you. Supply, demand, and fear all play an integral role.

And perhaps by understanding the intricacies of options one can steer clear of the dangers. But study hard people; options are an entirely different animal. Paper trade them for a while, and be realistic about whether your price really would have been filled. In fact, when papertrading them, take the ask price and sell at the bid price, and if after a bunch of options trades you've proven to yourself that you can make money, then you're on to something. And I'd stick with one or two contracts for a while. Things get mighty emotional when you've got a large handful of them and you're stuck holding the bag.

[spikefader]

PETS chart:

[Runner]

Ski, ya still in MAIN?

MAIN been on a tear!!

[skiracer]

MAIN been on a tear!!

Been out of it from when it was about 3.25 I think or somewhere near that range. I don't know what has been going on with it but at this point is would have been a double. I have been watching it and didn't do a thing with it. Great fundamental numbers though.

[Runner]

slop chart of main

[skiracer]

Still stalking SNAK and PETS. I'm rethinking my strategy on SNAK and will enter the trade on the next decent pullback. Doesn't look like it will get back to 5.10 area an if it keeps the momentum of today then this might be the entry point. Certainly didn't exhibit any weakness over the last three or four days in this recent consolidation of the markets. I wouldn't take today's small bounce as enough volume or strength to merit an entry an was probably just traders who were tired of waiting, impatient souls who had to buy it or do something, anything with their money. I don't want to be classified as part of that group.

PETS is getting to where I think it will have consolidated enough to make the play. I thought originally that 10.25 to 10.45 was going to be the bottom but looking back at the daily chart and Spike's take on it I see Spike's bottom of 10 area as a more realistic point. Take a look at the daily. Anyway the options took a hit of -.25, the first day I posted on it after Lye brought it to our attention, from the previous day's close of .85 to close at .60 bid on a drop in the stocks price of .15 cents from 10.71 to 10.56. Today the stock closed at 10.26, a drop of .30 or .15 more than the previous days drop of .15 but the option closed at .55 bid or just a .05 drop on the .30 drop in the stocks price. So the stock dropped more today than the previous day but the option only dropped .05 as compared to .25 the previous day on less of a drop in the stocks price. Do you see what I think I am getting at proportionally. The option dropped less today on a larger drop in the stocks price than it did yesterday on a smaller drop in the stocks price. Just an observation but worthwhile noting. I've still got the fever for the stock and the option but am going to remained composed and patient and wait it out for the lowest entry possible. I still am very confident that this is only a consolidation of recent gains and that the fundamentals of the stock are still great and will merit a price of $15.50 to 16.75 range.
Also look at the volume coming into the stock, the money flow, A/D line, OBV line, and MACD remain well above their 0 lines on the daily. Just waiting for the targetted entry point for the option and the stock. Honestly like the Dec. 12.50 call option moreso than the stock from here but I do believe both will do well from here.



BTW nice stock Lye.

[Runner]

Hey ski, what is your take on PETS weekly chart?

Here is what I see from a intra day perspective

Overlapping support
60 min chart 5ma 10.21
15 min chart 5ma 10.24 15ma 10.22
5 min chart 5 ma 10.26 15ma 10.24
I like the overlapping support in the 10.20-10.26 area.

Overlapping resistance:
60 min 15ma 10.52
15 min 200ma 10.33 ( expect volume increase in this area.)
5 min 200 ma 10.56

Watch the 10.50-10.56 area if price moves near it. I expect increase in volatility near the 200 hr ma.

I also see a fractured set up when looking at my different time frames. I like the 3 lane highway like the one VPHM just put in. This set up is the most forgiving. Simple my STO’s all heading up. On PETS the 5 min is heading down from the 80 band, but never know when looking at different time frames things could change real quickly.

[skiracer]

Runner,
The weekly isn't to much different from the daily but the daily shows a clearer picture an a better breakdown of what's been going on with the stock. That's why I used it instead of the weekly, but I rely more on the weekly for decision making if it's not a quick intraday daytrade. I don't use alot of the smaller minute charts but use the 15 min. almost exclusively for intraday. I do agree with you on the overlaps of the ma's in the 10.20/10.26 area and my own feelings are it's near a bottom for the time being. As far as resistance I see it more in the 10.60 to 10.70 range which is close to what you see, but with the smaller time frames it can change very quickly. Below is my take on the weekly which is very similar to what I see in the daily. I also included a tidbit from MSN Money about the earnings an outlook for the next qtr. Like you I'm more of a TA guy but when the earnings and guidance outlook are this good going out it makes me feel more secure in the play. That's why I think the Dec 12.50 call is a decent play. Everything looks good for continued increases in building client base, sales, an earnings.