We've waited patiently for the stock to reach a long-term rally target at 149.42 (see inset). It is nearly there, and to get short I'll suggest buying four March 145 puts when the stock is within six cents of the target. The calls settled at 3.53, but it's difficult to estimate where they'll be trading with GS $2.30 higher. We'll risk $100 theoretical on the trade, stopping ourselves out of the options if they trade for 0.25 less than we've paid for them. _______ UPDATE (12: 10 p.m. EST): We'll use 2.75 as a basis for four March 145 puts. This is toward the high end of the buying range reported in the chat room. Let me suggest a rigid, uniform stop-loss for all players at 2.25. This is more than the $100 I'd intended to risk initially, but Goldman's rally just seems so miserably STUPID at this point that we'll want to give our short position just a little extra room.
Thursday, January 31, 2013
Silver Close to a ‘Hat-Trick’
– Posted in: Free Rick's PicksMarch Silver (although not Gold) is within easy distance of doing a 'hat trick' with an impulse leg. Check out today's tout if you want to know where to set a screen alert -- and perhaps get long via camouflage -- since this is the subtlest buying opportunity we've seen in a while.
SIH13 – March Silver (Last:32.055)
– Posted in: Current Touts Rick's PicksSilver looks ready to pull gold higher, and it wouldn't take much to turn the intraday charts quite bullish. Notice in the chart that there are three peaks within 80 cents of current levels, two of them legitimate 'externals'. I've set an alert at 32.800, a tick above the highest of the three, and it would be more than a little encouraging if it gets hit within the next day or two by an uncorrected upthrust.
GCG13 – February Gold (Last:1677.30)
– Posted in: Current Touts Rick's PicksFrom a Hidden Pivot perspective, there was nothing to see yesterday. Although the futures were up more than $20 at one point, the rally merely brought them to the approximate midpoint of a tedious trading range that has traced out since mid-December. Before we get excited, let's stipulate that the futures must blow past the two peaks shown without a correction. The #2 peak at 1704.40 is not a true 'external' high, but any unpaused thrust that exceeds it and #1 will be good enough for government purposes.
FB – Facebook (Last:30.17)
– Posted in: Current Touts Free Rick's PicksSooner or later, our turn on the hot seat was going to come. And now it has, with Facebook shares currently in the throes of a headless chicken dance following the release of Q4 earnings after Wednesday's close. I've reproduced a five-minute chart that shows how Wall Street's best and brightest are taking the news. Not well, for sure, since, after some extremely wild swings, the stock is down about 5% on word of 40% revenue growth. Profits were down 79% as well, but this reportedly was due mainly to the cost of some new initiatives and charges related to employee stock. The numbers supposedly were in line with expectations, but as always, it's who is doing the expecting that matters, not the numbers per se. Perhaps cooler heads will prevail on Thursday, but there's little point trying to second guess these whackos on a day when they've swung the stock 13% in mere minutes. For our part, we continue to hold a bull spread that is guaranteed to make money — two dozen March 30-33 verticals legged on in November for a 12.5-cent credit. We'll bank as much as $7500 if Facebook is trading above $33 come March 15, but no loss is possible since we own the position for a net credit of $300. Click here to sample Rick's Picks free for a week.
