Thanks. Still, you are playing the stock with a 2 week time limit. Are you expecting news ? Earnings from a related company? Or is this purely a technical based bet? Good luck btw !
I alott a small amount of my account to play stocks on the first day of a break out. SCLN had a positive excursion of 10 cents on a 25 cent cost basis. I go out as it lost volume and I remained break even on the trade. I considered JDSU, GLW, and a few other stocks, but for me, SUNW presented the least risk. Worst case scenario, the break out fails, and we're back at 4.3. I will get out at that point. My expectation is for it to break 5, potentially hitting 5.5 (jan 05 highs) by option expiration. I look at it as just buying 7000 shares of the stock, except that only 4,300 dollar of my capital is tied up. There's no point for me to buy the stock because I don't want to own it long term, I'm just playing the break out.
I'm so glad that SNDK has dropped over $4 since I spotted it for uptrend. Experience informed that the gap on 02/27/06 was false, so I was expecting a drop before new uptrend is established. I'm waiting on SNDK and other stocks.
An interesting site I just found this morning: http://quotes.barchart.com/texadv.asp?sym=sndk But, I don't know how useful their predictions are. SNDK seems to be in an intermediate term downtrend. I wouldn't try to catch its bottom.
I don't advise traders to seek bottom/top of any security. Gone are the days of overbought/oversold. I don't do it! Thanks for the link; I'll keep an eye on their predictions!
You get a better bang for your buck using options, besides the smaller risk. SMH opened 2/27, DNA 2/28. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1002370>
Some traders believe so much in support/resistance. In fact, one particular trader told me yesterday that SNDK would rally today, sure the stock rallied, but..... For directional options' traders to succeed, the trader's prognosis of the market must not only be correct, the entry point must be spot on. Perhaps SNDK will drop a bit more...I'm looking. Other stocks like AAPL, UPL, et al are on my radar.
As others before me did, I found out too that if you bet with the trend you'll be wrong only once, when the trend changes, otherwise you'll be right. If you bet on a reversal you'll be right only once, when the trend changes, otherwise you'll be wrong. In my opinion this is very simple but powerful. It just requires greed control and discipline