BBBY begins to bounce! ODP still hovering but not going against us.

In the airport today on the way to a conference but had to post the good movement in my two picks that happened today.

As you can read below I bet against Office Depot a few weeks ago after the stock jumped on news of a fancy new investor coming in to buy the stock. It seems that people are waiting to see off this guy knows something the rest of us don't.  This stock is a dog.  No number of new investors can change that. This may turn out to be a longer term trade than I initially intended but I'll wait it out. ODP Is on a multi year downward trend with a strong resistance that hasn't been broken in 3 years. long term this stock is going down.

BBBY on the other hand has been recovering from it's big drop a few weeks ago. Option is up 20% today and gaining nicely. Expecting this one to keep climbing for a while. Lots of room to move.

That's all for now.

Thanks for reading!

Straight from the Chart

Please read all disclaimers! This blog is for entertainment only!

Facebook turning an 'about face' coming back strong on heavy volume.

Alright, I still don't have any money to put into this trade but if I did would have already gained some upside from where I called for a $FB rally. The stock is up almost $2 from where I called a turn. There is a good looking chart that is showing a support level beginning to form in all the right places. 

What I think happened here is that on the 12th the stock gaped up and broke a weak resistance level that has now formed the support. Though this is a VERY short period of time to be basing any technical analysis on I think it is good enough to show an upward trend that is likely to hold for a while longer. 

This one is still risky because this chart does NOT have very much data to base many conclusions off of. But I think I was right about the rally a few days ago and I think it will continue to the $26 price point over the next several weeks that I called for originally. 

Off-ice Depot about to be On-Ice if the chart holds. $ODP PUT options holding steady.

$ODP Office Depot is still holding on to its elevated position where it jumped after the fancy new investor came in and inflated the price. It doesn't belong where it is and I'm still expecting the fall but we may have developed a bit of a 'short squeeze' on this one and have to wait it out.

One of the reasons I am so confident that the stock will come down is that over the last 3 years the stock has been stuck in the same channel and not come out. A long slow decline has been persistent with the stock occasionally flirting with cyclical highs only to return to the pattern in which it has been stuck. 

Granted, the jump we've seen off the support level has been pretty wild. But it was not based on anything fundamental to the business. If $ODP were going to break out of a multi-year resistance level it would have to be on some big news that changes the nature of the stock. Some guy coming in a buying 13% of the stock and office depot hitting their numbers for once does not constitute a fundamental change in the declining nature of the business. 

One of the great things about options is that even though the stock has gone up since I bet against it with $4 PUT options the value of the options has barely moved, in fact I'm still at even money on it. One of the reason for this is that I got what is called 'Deep In The Money' put options. Meaning that the strike price was so high above the current stock price that the stock would have to move a ton to get me 'out of the money' or to the point where I couldn't execute on my $4 PUT.  Deep in the money calls and puts tend to lose money and be less volatile overall than 'near the money' options. Plus with options investors are holding on the puts because very few people think this is going to hold. 

It probably would have fallen already if their wasn't some sort of short squeeze going on.

I'll let you know how it goes!

Thanks for reading!

Straight from the Chart 

Disclaimer:

Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.

Office Depot 13% up on fancy new investor. Ha! I'll take some of that on the way back down.

This morning Office Depot popped 13% on the news that a fancy news investor bought 13% of the company and he believes the company can be better than it is. When something like this happens I am looking at the options to see which ones are getting killed. I found a $4 PUT option that lost 31% of its value on the move this morning. Bought 6 contracts to catch it on the way back.

Now, Office Depot may very well be on its way up to a long term gain. But in the short term it is not going to
hold and I'm going to get some of that 31% back in the next few days.

I'll let you know how it goes!

Thanks for reading!

Straight from the Chart 

Disclaimer:

Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.

Staples gets jammed! Sold SPLS PUT option for 12% Gainer! Keep your eye on SPLS. Might pick up some FB!

You don't need much of a move when trading options to make a lot happen. As long as you are on the right side of it a tiny move like on the SPLS chart this morning can net much more dramatic results on the options side. 

After my 15% gain on SPLS CALL options last week I immediately bet on the downside with PUT options to catch the downside of the overreaction to buyout rumors on Friday. When the market opened this morning with only the slightest momentum on the downside I sold for a 12% gain in 3 Days (1 Trading Day). Not too shabby. 

So with all said and done I came out of this SPLS swing with $226 that I didn't have last week. With the tiny dollar amounts that I am trading, remember I only started with $1000, that is 22 % up for the whole portfolio. That is about equal to what the DOW is up so far this year. 

Remember though, if I had bet on the wrong side of this I could have gotten crushed on the downside just as quickly. Options are awesome when you catch the right swings but you have to be careful. 

Now that I have some capital free after cashing out of SPLS I might take another look at Facebook (FB). I think there may be some upside there. The chart looked good last week. 

Thanks for reading!

Straight from the Chart 

Disclaimer:

Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.

Its not easy making green! Even if I make it look that way :) Portfolio up HUGE this month.

Figured it is time for some portfolio performance review to let everyone know how it is going for the Straight from the Chart portfolio.

In a word, great!

Alright, so I know we are in the middle of a huge rally right now and Obama and Bernanke are doing everything they possibly can to prop up this market by pumping TRILLIONS of dollars into it over and over again. So With that being said, I know that this is not a real rally, and I know that just about everything is making money these days. BUT, what I love about the charts below is that they are putting me right up against the Dow Jones and the S&P 500 index benchmarks to show that we are killing it on the Straight from the Chart portfolio. 

First lets look at the 1 month - ME: 26% Dow: 3.3% and S&P 4.3%

RESULT: I win by 21. 7 %

3 Month: Me: 50% Dow 7.4% and S&P: 10.3%

RESULT: I win by 39%

And my personal favorite chart the 1Year Chart. Because this chart shows how I've been doing since I started this whole experiment back in January. I shot up HUGE in my first several months. Then you see the three months I took off because of my internship this summer and the portfolio fell apart quickly and actually went in the NEGATIVE, ending up with less than the $1000 I put in to start. 

But in the one month I have been back at the steering wheel I have already overtaken the index benchmarks and by a BIG margin. 

ME: 36.9% Dow: 19% and S&P: 21.2%

RESULT: I win by 15%

And that is with me taking 3 months off and losing all of my profits over the summer. Not bad. 

That is how its turning out so far.

Thanks for reading!

Straight from the Chart 

Disclaimer:

Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.

BOOM! Big day for SPLS! 15% in 7 DAYS!! Reversing my position to ride back down.

BOOM! 15% in 7 Days!

This is why I love stocks. Where else are you going to get returns like that!?

Let me tell you that one of my favorite things in the world is buyout speculation. I love it! People go crazy and act like the deal is done when in fact all that happened was someone speculated that talks may be in the works and there might be a buyout that happens someday. As soon as that happens 'Bang!' the stock jumps at which point all of the smart money starts taking profits and betting against it in the long run. The people who bought on the hype of the buyout rumors sell out at a loss. 

I just made a play similar to this one on BBY (Best Buy) a few weeks ago and did great on that one as well. Now SPLS is following the same pattern. The stock is already down 2% on its high and will shortly go down to where it came from. 

So I am REVERSING my position. sold out for a 15% gainer in 7 days on the up side and now and flipped to betting on the down side to ride it back down. Bought 7 $12.50 Put options with Jan 2013 execution dates today. This particular option lost 25% of its value TODAY! I'll be happy to take that 25% to the bank when the stock corrects off of rumors. I'm thinking a 2 to 3 week trade here at the most. 

I'll let you know how it turns out!

Thanks for reading!

Straight from the Chart 

Disclaimer:

Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.

Fool me once... ya aint gonna fool me again. Facebook is looking up and ready for a move!

I don't have any charts to show on this one because I'm neck deep in reading for my classes, but FB, yep Facebook, is looking great right now. It is sitting below $21 a share and is ready for a move up to $26 or higher in the next several weeks. I don't think I have any capital to free up for this because it is tied up in SPLS (Staples) and F (Ford) but if I end up liquidating on any of those while facebook is still $23 or below I'm going to jump in to some Facebook options.

I'll let you know how it turns out!

Thanks for reading!

Straight from the Chart 

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.

SPLS becoming a Staple in the portfolio... Call Options to Capture the Upswing!!

In my fortunes and follies of trading options I have learned to look for momentum, and finding momentum off of an unreasonable downturn to return to previous levels is my favorite kind of momentum. I have traded Staples before and have made some money off of the stock. The company has become undervalued and is looking for a good bump up a few dollars in the coming months.

A couple of things I like about the movement of SPLS is that it dropped suddenly on some bad news but it dropped off of positive momentum. After the drop it is quickly gaining steam on several days of upward momentum with growing volume well above the average trading for this stock. I think we are looking at a stock that will return to previous levels at or near $13 dollars in the coming months. 

The chart is simple but paints a good picture of a huge shift downward on bad news (an over reaction to news is not uncommon). But with building faith and good news on the company that is creating a positive outlook.  

I don't anticipate this being a long term trade, a couple of weeks at most, It may give back some of today's gains but having purchased some in-the-money call options I don't expect the option to be as volatile as the stock. What is important is maintaining upward momentum over the next few weeks and the in-the-money calls, especially those a long way out should benefit nicely. 

I'll let you know how it turns out!

Thanks for reading!

Straight from the Chart 

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.

13% in 8 Days!! Monster loss becomes our Gain!!

Monster has been on a huge losing streak the past 2 months. I spotted the channel at an opportune moment when the stock was just cresting on the upper resistance level. Purchased a $55 put option with a Dec 2012 expiration date. The stock was above $60 when I bought and has crawled down to $56 this morning. 

With such a short execution period I decided to take profits on this one early. I still believe this stock has a long way to go down and will probably be below $40 before this losing streak is over. But the number 1 rule in investing and one of my favorite Jim Cramer quotes "Bulls make money, Bears make money, Pigs get slaughtered." Don't. get. greedy.

Keeping an eye on MNST in the next few days could provide an inflection point. There is some support around the $53 level in the long term trends. The channel is strong enough that it may blow right through it and keep heading down, if it does I may get in on another put to get in for a long ride down. 

I'm trading such small amounts of money that the broker fees take a chunk out of my gains. What I bought for $420 cause me an extra $10 in fees and sold for $500 another $10. Losing $20 in profit on a $80 trade is no small thing and took my net gains to 13% on this trade after fees. 

20% Gross and 13% Net on a trade that lasted 8 Days!!! That is not a bad trade. Risky, yes, but profitable. My portfolio is on a big winning streak since jumping back in after my summer hiatus. On track to beat all major indexes for the year.

Thanks for reading!

Straight from the Chart 

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.

MNST Losing Its Energy

After a huge year of stock gains Monster Beverage Corp has been on a huge losing streak. It has gone from bad to worse and I think it has further to drop. Investigations into the claims made by energy drink manufacturers will at worst hamstring their marketing, and at least give the segment a lot of bad press.

I put in an order today for a $55 Put option with a Dec 22nd expiration. The stock is sitting at $59.48 today but if the current losing streak continues I will make a good return on this trade.

Thanks for reading!

Straight from the Chart 

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.

The bottom falls out of BBY! 32% gain in 2 Weeks!

BBY took a huge dive early this morning falling 10% in early morning trading. It has quickly rebounded and has gained 6% of it back. The 12% gains from yesterday quickly turned into 32% this morning as I was able to exit my $20 PUT option at the bottom of the 10% drop.

This is my favorite kind of trade. Calling the bluff on wild rumors and speculation. Best Buy needs a miracle, not an over-zealous founder trying to convince the public he has the financial backing to take Best Buy private. This stock is toxic and financiers are scared of losing their shirt on it. With the new CEO that has ZERO retail experience on top of that, Best Buy probably has a long way to fall. 

I sold my PUT option this morning to lock in solid gains. As one of my favorite blowhards, Jim Cramer, likes to say "bulls make money, bears make money, pigs get slaughtered". Don't get greedy with solid gains. I'm in this for quick in/quick out gains. Holding for too long in this market is asking for trouble. Options trade on momentum, get out while the momentum is in your favor. 

Thanks for reading!

Straight from the Chart 

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.

Best Buy (BBY) Tumbles!! Up 12% and Moving in the Right Direction!!

Best Buy (BBY) gave a lot of it back today. There was a huge 25% jump the other day on the speculation that Best Buy had the buyers to take it private. The smart money started betting against the buyout right away. That 25% dropped to 13% later that day as it started to sound to good to be true. 

I made the call after that jump that BBY would be back to $18 soon once the hype died down. Got a few more cents to go, but it looks like I was right. On news today that the buyout is beginning to fall through. BBY gave back the rest of the gains. Falling to $18.50 just a short way from my target. 

The $20 Put option jumped nearly 30% today as it has become clear that the stock will not be worth the $24 or $26 dollars that people were hoping for a few weeks ago. 

I will be hanging on to the option for another few weeks as I wait for it to find a bottom under $18. There seems to be a support level around the $17 dollar range and if it hits that level I may bet on the up side. Until then enjoy the ride down! 

I'm up about 12% on this trade in just a few weeks, think i'll hit 15% before the week is out. 

I'll let you know how it goes.

Thanks for reading!

Straight from the Chart 

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.

Hype pushes Best Buy 13% - Put options to ride the wave back down.

Did you hear the news today about Best Buy CEO saying he will maybe make an offer someday that he thinks might come in around $26 a share if he can raise the money from a bunch of people that haven't yet committed a penny to the cause. And then did you see the stock jump 25% on the hype!

BBY closed up 13% as investors started coming to their senses and taking the gains on the beaten and bruised stock. There have been a few of these spikes for BBY over the past few months but none have shown any legs what-so-ever. Expecting this one to be exactly the same.

Placing a conditional order based on the sale of my Jan 2014 $1 Sprint call option. If that one clears for the price I'm expecting an order will hit for a $20 March 2013 put option for BBY. This option lost 30% of its value today on the ridiculous hype. I'll get that back in a couple of weeks.

I'll let you know how it turns out!
 

Thanks for reading!

Straight from the Chart 

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.

 

Taking Profits in Sprint (S) 104% gain on this trade!!

104% up on Sprint in the past 8 months! Not a bad trade. Got in on this around December when Sprint added the iPhone. It has been nothing but up from there. After beating on earnings a few days ago Sprint has formed a good exit point on this trade.

It is a good point to bring up that I think Sprint (S) is a great stock poised for long term investment growth over the next several years. The combination of huge subscriber growth on lower than average prices and unlimited data plans will lead to revenue gains in many quarters to come. But my strategy is not about the long term investments. I'm in the trading game and I think I may have found some other opportunities that present a bigger quick win opportunity.

The chart told a good story back in December as a solid support level was established near historical lows for the stock. The stock rode that support level for several months before subscriber numbers began to forecast huge growth. Sure enough, with a huge beat a few days ago the stock gapped again forming the solid exit we have today.

I am selling my Jan 2014 $1 Call to free up some cash for a new opportunity that has presented a quick win opportunity.

Thanks for reading!

Straight from the Chart 

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.

What a Croc! CROX is looking up.

With my summer internship coming to a close in the next few days I am able to turn some attention back to the markets. Oh how I have missed them. Unfortunately I have also committed one of the cardinal sins of investing in the process. I ignored several of my holdings during my very busy and very important summer. A few of them turned and I have given back some gains. But no use crying over spilled milk. Time to earn it back!

CROX - Yep Crocs. Who woulda thought this company would be making a strong push. 

Crocs is the maker of foam rubber shoes. It peaked about 6 years ago and has been falling off in the US ever since. So why on earth would I be thinking this stock is ready for a move upward? This is purely an international play. Crocs makes inexpensive shoes that are becoming more and more popular in several of the warmer climates in the world. Fortunately their shoes are also durable, and inexpensive. With the expansion of the Crocs line into several fashionable styles there prospects are looking quite good.

The chart also paints a very good long term picture. After falling from a high $20s price point last October the stock has found a strong support level while at the same time breaking out of a recent channel creating upward momentum on the chart. This coupled with CROX raising its guidance for next quarter paints a picture of a stock headed in the right direction. I'm calling this one back to $20 in the next several months. 

I have put in an order for a Jan 2014 $20 Call option. We will keep an eye on it and see what happens!

Thanks for reading!

Straight from the Chart 

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform. 

NOK - Got to $4 faster than I thought! - Might be time to take profits

NOK - was floating around the $5 mark when the hype started building around the new Nokia Windows based smart phone that was going into Wal-Mart at the $50 price point. This was being billed as the smart phone for the masses and the revival of Nokia and Windows mobile platforms. I didn't buy it.

 

Much faster than I expected the bottom fell out once the hype died down and people realized that Nokia can't play in the American market and that Windows just can't get any traction in the mobile space. Windows does not have the developer base to build a mobile platform! In my last post NOK was at $5.33 and I predicted a long run trend down to $4. Only a few weeks later its already there. Might be a time to take some profits and run!

 

I've had a few other trades go against me (XRX) but NOK is looking at a hefty gain with close to 40% gain in just a month since my entry point with a $5 PUT option on 3/16/12. I still have faith in XRX so I might be closing out my NOK position today and doubling down on XRX hoping for a earnings beat on 4/23/12

Thanks for reading!

Straight from the Chart

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform. 

NOK - Starting to turn - Following the pattern!

 NOK (Nokia) has been following a pretty steady pattern for the past few months of a big jump (around 4-5%) in one day and then a gradual sell off over the next few weeks. My last post was identifying the 5% gain that took place on no news and for seemingly no reason.

 

Today's move down nearly 2% on light volume is consistent with the pattern that we identified a few days ago. An interesting note is that in the past few days, even as the stock was going up in value the PUT was having slight increases! Meaning that even as the stock went up, sentiment (and investors money) was voting against the gains. 

 

As you can see in the chart the pattern is repeating for the 4th time. Keep your eye on it. This stock is in a fairly shallow trading range and things can change quickly when that happens. Fortunately we can all rest assured that if the stock moves anywhere it is not going to be on performance data. Instead expect it to move down ward gradually.

My Nokia position is a Jan 2014 PUT option with a $5 strike. Because this is a pretty shallow trade without a ton of price movement, I will likely keep this option waiting for a dip in the $4 range. I know a lot of people think that the new $50 Nokia Windows based phone is going to create a buzz. I don't see it happening. Until Nokia or Windows are able to show they have any competence in the smart phone market I will assume the numbers will come in below expectations. Just look at the financials. Not Pretty.

So stick around for a move down to $4 in the LONG run. short term I'm expecting a bottom around $4.90 to $4.95 or about $.40 below current trading. Options usually trade heavily on momentum, if I can get 3 or 4 days in a row of negative momentum I'm likely to make a 20-30% gain on the put option.

Thanks for reading!

Straight from the Chart

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform. 

NOK - Can someone please tell me why NOK had a 5% jump today?

I just don't understand the jump today.

From what I can tell this has short opportunity written all over it. First of all I am ALWAYS leery of big moves that appear to happen for no reason what-so-ever. And if someone can explain to me how NOKIA suddenly became an attractive investment I'd like to know.

On the chart side I see several things including a nice channel telling me that the downward trend has been in place for the past 3 months with several instances of high volume jumps that take place for little or no reason.

I'm considering a Jan 2014 PUT option with a $5 Strike. I see this as a short term play as I ride the sell off down to the $5 - $4.90 level and get out with a nice 10%-20% profit on the option. Depending on how it opens in the morning, I'll let you know if I pull the trigger.

Thanks for reading!

Straight from the Chart

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform. 

SPLS - Taking some off the top - 48% Gain in just a few weeks!

I have heard it said on TV a thousand times. "Bulls make money, Bears make money, and Pigs get slaughtered." The quote is in reference to taking profits when you have them, take a little bit off of your position as it makes money so that if it turns you have secured the gain. Well I am happy to report a pretty significant win today in my little $1000 experiment.


With another 2% gain today the SPLS Jan 2013 options with $15 Strike that I bought on the post Q4 earnings dip were up 55%. Though I still have a strong belief the stock will go higher, I thought it wise to heed the advice of the professionals. So I sold both of the Jan 2013 options with $15 Strike and after commission was left with a 48% gain! Not too shabby in my book.

More significantly however, is that this trade put me up 40% on the year! Two and a half months in to the year I have beat all averages by a long shot. Remember, options are risky, but they can pay handsomely when you play them right.

I am still holding on to my Jan 2013 option with $17.5 strike. Its had a nice run up but didn't run as well as the $15 strike that I picked up as a bargain after the sell off on Q4 earnings. I still think this stock will hit $19. So I'll keep holding this option for the time being. If there is another sell off I will definitely add to the position as I did last time. Its been a great run for SPLS. It'll keep going, this is a nice long term play.

Thanks for reading!


Straight from the Chart

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform. 

CSX - Good bounce this morning but keep your eye on it.

That is the screen shot from this morning on CSX. As I had hoped it has bounced off the support level with heavy volume and a big gain. Looks like we may have found the bottom for now.

I'm still keeping my eye on it though, CSX may just be benefiting from a up market this morning.

Thanks for reading!

Straight form the Chart

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform. 

CSX - Keep Your Eye on It!

 

So I've been losing my shirt on CSX. After a recent dip I thought the company was ready for a rally. Thus far I've been wrong. Thankfully my position is relatively small compared to my major holdings, SPLS in particular. BUT, today is an important day and this week is going to be a big one for the performance of CSX. I've ridden this one down to its support level right here at $20. 

 

With a double bottom forming here at $20 we are going to see some action off of this price. If it falls below there are no support levels forming for about another 10% below $20. I am still holding my breath for a bounce off of the support level which is why I haven't sold yet. But I will be watching it very closely for the next few days. A day or two below $20 and it will be time to cut and run as it may run all the way down. 

Important note about trading options. Notice that I am experiencing a 50% decline on a 10% decline on stock price. If you are going to be trading options you have to be able to take the swings and you must diversify. The only good news is that a week or two in the other direction and 10% can double the options price. For me and the $1000 I'm starting with the risk is worth while, and thus far it has been profitable.

Thanks for reading!

Straight form the Chart

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform. 

SPLS - Continues to Rally

 

So I started this experiment with only $1000 so my dollar numbers are small. Don't look at the dollar amount ($110  Profit) but instead look at the percentage. As of today I have a 41% gain in the SPLS Jan 2013 option with a $15 strike. This option got cut in half on the 10% decline in stock price when the Q4 results were announced creating a terrific buying opportunity. It has bounced right back to where it was before the dip. But don't go anywhere yet. There is more to come for SPLS.

Staples (SPLS) raised its quarterly dividend by 10%. In the land of performance signaling raising the dividend usually means that management is confident in continued growth. Ignoring the crazy sell off that we took advantage of the other day, this stock has been showing an upward trend and higher lows since October. This stock has a 52 week high around $21. I don't know about $21, but I am calling that the long term outlook is a $19 target price. With the recent sell off on huge volume, I think most of the profit taking is out of the stock, clearing the way for a continued rally.

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform. 

Great return on SPLS after yesterdays dip. Called that one!

So as I mentioned yesterday Staples Inc. - SPLS - took a huge dive yesterday after releasing Q4 results and hitting expectations. There was a lot of profit taking and even more over reaction to a company that hit analysts expectations, but didn't blow them away. So needless to say my Jan 2013 Call option with $17.50 strike price took a huge hit. I lost all of the 46% gains from the day before and about 15% more than that even! HUGE hit for a one day swing. #OptionsAreRisky

After the SPLS stock took a 9.5% dive yesterday afternoon I saw a bottom forming and jumped in after Jan 2013 Calls with $15.00 strike price took a greater than 50% dive along with it. I sold my stake in Ford (F) and took some profits out to be liquid enough to buy on this great opportunity with a stock that has tremendous upside potential.

Then today when the world settled down and people came to their senses, SPLS had a 5% jump in stock price. I knew that was going to happen after yesterdays ridiculous sell off.  My original option gained the 46% back that it lost but it is still down a few percent from where I purchased it originally. And the new options I picked up yesterday gained 34% in one day!! Not bad huh!?

SPLS has along term trade potential here that is going to make me a lot of money on this trade. Well, I guess not a lot. I only have $1000 to start with. But all things relative, this is going to be a big one. I'll check back in tomorrow and let you know any updates.

PEP in the mean time had a down day, nothing I'm very concerned about, that's a long term trade that will probably have to wait till quarterly results to see a jump. Sticking with it.

Thanks for reading!

Straight from the Chart

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.  

SPLS - PEP - and a great example how risky options can be

So the bottom fell out of SPLS today. I was ecstatic for the 46% gain yesterday, well today was about 50% down on some huge selling off and profit taking. SPLS has been performing nicely for the last several months and some profit taking was expected. What was not expected was the massive sell off that happened after they released financials and hit analyst expectations. That's right, they hit expectations, not miss, but actually met analyst expectations. After the Office Depot numbers yesterday I guess meeting expectations wasn't good enough.

The stock was down 9.5% at one point today. When it started to bottom out I took the chance to pick up 2 SPLS options that had been cut in half by the sell off. I'm telling ya, this is a great company. Several fundamental analysts reiterated their buy recommendations today after the sell of. This stock still has $19.00 written all over it. Its a long term buy, don't expect that tomorrow but get in soon if you want to get a hold of these bargain prices.

PEP is still headed in the right direction. Just wanted to give my backing again to another great company that is trading at a discount right now for no good reasons.

Too tired to type right now, more tomorrow

Straight from the Chart

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.    

Bottom falls out of SPLS for no reason.

Tripled down on SPLS after a huge dip this morning on meeting Q4 expectations. More later.

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.    

SPLS 42% gain in one day on Jan 2013 Call $17.50 Strike

Thought it would be good to inform everyone as to the options I am currently holding in interest of full disclosure as well as to let you know the stocks I think have long term positive moves ahead of them. But most of all I wanted to show the 1 day gain that happened on SPLS today!

How about a 42% return in one day of trading! A 5% gain in the stock price gave a 42% gain in the option price! Again, the amount of money I am trading is miniscule ( student, no job, no income ) but if I traded out now I would net about 31% on my total investment. Of course with trading commissions that would be cut in half, so I'm holding on for a long term play with the stock moving toward $19.

Remember, options are risky. A bad day of 5% down can have just as large a negative effect as today was up. But I will take a 42% day any chance I get!

As for the other holdings, PEP continues to look very promising. I got in on the initial drop so my returns are down for now. This is a long term play so I'm not really worried if this one takes a year to show profit, but PEP is still showing 6 days of momentum after the bounce I wrote about last Tuesday. At the time I wondered about lowering my cost basis and doubling down, had I done that I would be close to profit already.

Thanks for reading,

 Straight From The Chart!

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.   

SPLS - Breaking Out / The Good and Bad of Trading Options

 

Can't deny the great trend happening with SPLS (Staples) right now. SPLS has gained a hefty 3% plus today in early trading, I'm expecting that to pull back a bit as investors take profits on a great day of trading. But I'm not as happy about the 3% day as I am with the trajectory of the stock price. Its been on a solid trend for months and continues to show breakout patterns that have held true. I'm watching for resistance around the $16.50 level but if it gets past that number it could be smooth sailing to around $19.00.

Today is a great example of how trading options can be a great way to make (or lose) money on strong trends. I am holding one Jan 2013 Option on SPLS with a $17.50 strike price. I got the option at $.80 / share and it is now trading at $.95 / share most of which came from today's move. With options you get rewarded, or destroyed, based upon momentum and a strong uptick in a positive momentum stock can mean big movement in the options. For example, a 3% move in SPLS stock price today gave a 26% gain in stock price today alone. Today's movement gave a $20 gain on an $80 investment.

Now my investment numbers are tiny because all I have is $1000 and a dream. But any investor with real figures to invest could have netted 26% gain on a relatively tiny 3% move. HOWEVER, the pendulum swings both ways. Getting in an option heading in the wrong direction could lose 26% on a 3% downward shift just as easily. That's why it is so important to pay attention to trends before buying, know the company, know the chart.

That being said I'm holding on to SPLS for the time being, I think the stock goes to $19.00. We'll watch it and see what happens. They are reporting 4th quarter results tomorrow, if it goes well - which I'm expecting - it could go even higher. The move today is likely the result of Office Depot reporting higher than expected numbers. Look for the same from Staples.

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.