DIA – Diamonds (Last:99.74)

The rally spike in the final seconds of yesterday’s session pushed the Diamonds to a high that lay just 0.02 points above the 100.65 target flagged here earlier in the week.  Although I typically don’t advise taking positions that late in the day, I’ll  establish a tracking position for the guidance of anyone who took the short: 200 shares from 100.65. For now, tie them to a stop-loss at 100.71, but bid 100.31 or better at the same time (i.e., o-c-o) to cover half of the position.  Those who earlier played the rally from 98.77 in the way I’d suggested, buying Dec 101-Nov 101 call spreads for 0.65, can take profits at will, since the spread is an easy sale in the mid- to high 0.70s. _______ UPDATE (9:58 a.m.): The Demons opened on a nasty gap down, allowing us to cover half the position at 99.74. That gives us an effective cost basis of 101.68 for the round-lot short remaining.  Tie it to a 100.32 stop-loss for now. Today’s weakness projects to 99.42, a Hidden Pivot midpoint whose breach would spell more trouble down to as low as 98.88. Those numbers will remain valid as long as the point ‘C’ of the pattern, 99.97, remains intact.

Tagged as: DIA, Diamonds, Forecast