Options Oracle: 08/07/2012

On June 8th we bought the January 11 Calls for 4.60. The stock has since stayed in a trading channel with the price now at the upper resistance area of the price range. The red spinning top is a signal that the sellers may, once again, be moving in to push the stock lower. Another signal that tells me that the price could turn bearish is the fact that the most recent gap has filled. We know that 80% of the time the price reverses once a gap fills, so the right thing to do is sell out of the position and take the profit.

Although the profit is a small one (just over 4%), it’s best we take it now rather than letting the stock drop and losing the profit altogether.

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About AJ Monte

As a premier trading consultant, AJ is one of the most sought after in his field. He teaches professionals specialized techniques on how to accumulate and protect wealth through innovative market techniques. TheMarke__404+

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