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 - 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. 

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 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.