Chart Series: BIK

Comments
I bought BIK thinking of it as a long time investment (5 years or so). But I have lost around 10% on this investment so I went out of it. I still think fundamentally the BRIC sector has a lot of potential over the next 5-10 years (although there are concerns about China showing signs of slowing down and letting the yuan float which could hurt chinese stocks).

So I went back and looked at the index technically and realized I bought it at the top of a correction (d'oh, should have checked techincals before buying!). BIK is in a bear trend at the moment daily, moving sideways on the weekly, but on the monthly if we can close above the PLDot, a new bull trend will be established. If the weekly and the daily charts can follow up (which needs to happen anyway for the bull trend on the monthly to occur), I will buy back into BIK.

Also, I am keeping a close watch on the composite oscillator, looking for signs of reversal. I think the oscillator has reached about as low as it will go so should turn around soon. We are reaching a very key support at 24.7 which could very well be the turning point.

Chart Series: DIS

Comments
I bought DIS as a long term investment a while ago and the bullish trend has continued for a while. The stock, on the daily chart, is consolidating pre-earnings but is still showing support not far below the current price. My target is around $43 for DIS because of the bullish signals on the weekly and monthly charts.
Not to mention I think the FIFA world cup and acquiring the Marvel franchise helps disney fundamentally quite a bit.

My Trade (Investment)
long 300 shares of DIS.

Chart Series: TLB

Comments
A strong bullish trend on both weekly and monthly charts suggest the TLB is going to climb upwards. Although there are some bullish signs on the daily chart, I think any bullish move will be short lived because from an EW perspective I think we are in the middle of or end of a wave 1 (which would mean a wave 2 could pull back the gains a bit, but not below $11).
There is very strong support near $12.80 and both, PLDot weekly and daily support are above this level.

My TLB Trade:
Short 12.5 Aug Puts.

Charts Series: AAPL

I am going to post the charts I have created for all the stuff on my books, starting with Apple.



Comments:
In the short term Apple is looking bearish as the PLdot trend is broken (price closed below the PLDot line yesterday followed by an opening on the down side today). Also the Composite index is looking bearish because of the divergence in the composite index tops.
Having said that, weekly and monthly charts are looking very positive - PLDot trend is very strong on both and the composite index is on a bullish run.
From an EW perspective, I think we are in the middle of a wave 3 or wave 5, depending on how you look at it. Thus it is possible the short term trend reversal will feed into the longer term trend reversal.
However, I think the reason for the consolidation in the short term chart is because of the earnings release on 4/20 (Today!). I think AAPL still has some ways to go further north, especially since the Monthly PLDot resistance and Fibonacci resistance is so high. Also, there is very strong PLDot and Fibonacci support in the 230 area, so I doubt AAPL, if it falls, will fall far.

My AAPL Trades:
May 240 Calls - left over from a straddle
230-220 Bull Put Vertical

Will post more charts.

-Wown
StockJockz.blogspot.com

A Few Updates

I had described three trades: a DG bull put spread, an AAPL straddle, and a MSFT straddle. Below are my updates on the three trades.

DG Bull put

The trade worked out quite well. The earnings were somewhat disappointing and DG briefly gapped down. But the overall momentum of the market had the stock rebounding back up in no time and the combination of the positive deltas, high thetas, and dramatically falling implied volatility has made all the options worthless at this point and so I have achieved my maximum profit (unfortunately I am unable to get rid of the trade because there is no market for it. I guess I just have to let the options exprire in May).

Profit realized: 200% ($160) on cost and 8% on margin.

AAPL and MSFT Straddles
This trade is not going as well as I had hoped. My trade's premise was based on the theory that IV would rise. I think the IV was so much higher than HV that it could not go further up quickly enough to counter the negative theta.

The puts were doing especially bad because the stocks kept going upwards. So, I have traded the puts away for a small loss. However, the calls that I kept have been doing quite well. Because today is a down day, my current overall position on both trades is pretty much breaking even. Hopefully moving forward, the stocks make positive jump and I can realize profit on both these trades.


Additionally, I have been slacking off on my QQQQ analysis. I actually accidently ended up deleting my charts and I have just been too lazy to recreate them. One of these weekends I will get time to do that.

Finally, I have been REALLY slacking off on posting my month-to-month performance so I will try to get back on track with that:

Mar-April profit: 3.58%
Most of my profit comes from bull put spreads as I ride the rally higher. Today worries me quite a bit actually because I am down across the board and lost 2% today. Perhaps it is time to consider exiting some of my position prematurely because a correction may be on the way.
Biggest loser was actually one of my long-term investments in BRIC countries. So I am not too worried about that one.

-Wown
stockjockz.blogspot.com

2 Trades: MSFT and AAPL Straddles

Trade:
Buy 6 MSFT Strike 30 May Calls and Puts.
Entire trade at 2.25/contract

Buy 1 AAPL Strike 240 May Calls and Puts.
Entire trade at 21.30/contract

Analysis:
Both these tech giants are announcing earnings on 4/21 and 4/22. The Average implied volatilities are dwindling 26% for MSFT and 31% for AAPL. This is much lower than the average for both companies and the reason may be the steady bull run both companies have enjoyed since last earning season.

However, already implied volatility is starting to creep back into the market as earnings approach - investors are protecting themselves against a possible reversal in the trend post-earnings.

Expecting to see the age-old phenomenon of rising implied volatility in pre-earnings weeks, I have traded the above strangles. My worry is that theta is somewhat high for May options, but June contracts were too expensive and did not present the desired vega values. Additionally, the historical volatilities are lower than the implied, suggesting the IV could fall lower or stay the same. Theta deterioration and a lack of increase in volatility could hurt me.

Profit/Loss Expectations and Trade Management:
If implied volatility rises a mere 5%, I will make ~$300 on both trades (which is approximately 22% on MSFT and 14% on AAPL). If this happens, I will exit the trade aroudn 4/19 in order to protect myself from falling implied volatility post-earnings.

Also, depending on the time frame, if AAPL or MSFT move ~6% in either direction, I can expect to make a profit (the probability of this is ~45% for both trades). If there is a significant breakout in either direction, I will sell the other leg and retain profits on the winning side.

The worst case scenario would be that both stocks move right to the strikes I traded and settle there along with falling implied volatility. If this happens, I will exit the trade a couple days after earnings announcement.

-Wown
Stockjockz.blogspot.com