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.