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.