Rick's Picks » DIA

Primed to Fall?

Rick Ackerman — Thu, 20 Jan 2011 03:02:50 +0000

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DIA – Diamonds (Last:118.23)

Rick Ackerman — Wed, 19 Jan 2011 04:41:06 +0000

Yesterday’s 118.43 high came within 0.05 points of surpassing a key peak recorded in August just ahead of a selling avalanche. There is no disparaging the importance of this peak, the penetration of which would re-energize the bullish impulse on the weekly chart. Unfortunately, bizarre strike-price adjustments have made this vehicle all but untradable, at least by retail customers. My strategy would be to butterfly the 127 strike, since that’s where DIA appears to be headed. As an alternative, we may be able to use SPY options as detailed elsewhere in today’s touts.

DIA – Diamonds (Last:117.24)

Rick Ackerman — Thu, 13 Jan 2011 22:07:19 +0000

In the chat room earlier this week, I recommended buying Feb 115 puts if and when DIA hit a rally target at 117.61. They spiked to 117.65 on Wednesday, so I will establish a tracking position of four puts @1.20 for your further guidance. (The low on the puts was 1.18). There were corresponding short recommendations in the E-Mini S&P, which fell three ticks shy of an 1185.25 target; and in the Mini-Dow (YM), which failed by 29 points to reach its 11759 target. Concerning our put position, I’m going to suggest closing out two of them using a 1.42 offer, good-till-canceled. Make it one-cancels-the-other with an order to close out all four puts at-the-market if they should touch 1.20 again. ________ UPDATE: We scratched the puts for no net gain or loss when the Diamonds began the day with renewed strength. The puts blipped very sleazily up to 1.36 on the opening, as put options in a bull market are wont to do, but that wasn’t quite good enough to take us out at a profit. We’ll continue to short every potential rally top simply because we can — more or less painlessly.

DIA – Diamonds (Last:115.29)

Rick Ackerman — Wed, 22 Dec 2010 04:02:30 +0000

We own four January 111 puts for 0.97, but there is no point enduring more pain, considering that we were speculating without a price objective to begin with. Accordingly, I’ll suggest that you exit the puts on a sell-stop if they trade for 0.47. (Note: The so far low, achieved Wednesday, is 0.49.) We’ll try to get short again at another, presumably more opportune, time. _______ UPDATE: We exited the puts @ 0.47 off an intraday low of 0.46. The trading loss was $205 plus commissions.

DIA – Diamonds (Last:115.29)

Rick Ackerman — Mon, 20 Dec 2010 04:09:17 +0000

We continue to hold four January 111 puts for 0.97. My short-term bias is slightly negative, since the Diamonds have been working on a bearish impulse leg since Thursday. For now, do nothing further, but please note that the downtrend would need to touch 113.76 today to refresh the bear trend.

DIA – Diamonds (Last:114.88)

Rick Ackerman — Thu, 16 Dec 2010 00:17:26 +0000

We hold four January 111 puts for 0.97 bought shortly after the opening on Wednesday. The options were acquired not because the Diamonds were peaking at a Hidden Pivot target, but because they were starting to look tired. I am unable to project a downside target at the moment, other than a minor one at 114.59 (or 114.39 if any lower). That’s a Hidden Pivot, and because its sibling midpoint at 114.87 has already been breached, it can serve as a minimum objective for now.

DIA – Diamonds (Last:115.18)

Rick Ackerman — Wed, 15 Dec 2010 02:05:19 +0000

Just for the hell of it, let’s try to buy four January 111 puts. They closed @ 1.01, but I’ll recommend bidding 0.97 for them at the opening. Stay tuned, since I may adjust the price. _______ UPDATE (9:53 a.m. ET): We bought four puts for 0.97. Do nothing further for now.

DIA – Diamonds (Last:112.58)

Rick Ackerman — Wed, 03 Nov 2010 00:47:29 +0000

Despite yesterday’s swoon, the Dow still looked bound for at least 11367. The equivalent for the Mini-Dow is 11327, as noted earlier, and for the Diamonds 113.68. As before, we’ll try to short DIA by buying two December 112 puts when the target is reached. I estimate that they’ll be selling for about 2.38, but the best way to buy these options for a fair price is to simply monitor the spread for them as DIA closely approaches the target. _______ UPDATE (10:01 a.m. EDT): The exact high so far of today’s QEII short squeeze is…113.68. This has allowed us to buy two Dec 112 puts for 1.96. (Option volatility got CRUSHED by the rally.) We’ll risk 0.16 apiece on them, stopping ourselves out if they trade down to 1.80. I estimate that DIA would need to be trading for around 113.95 today to trigger our stop. _______ FURTHER UPDATE: We were stopped out at 1.80 for a $32 trading loss plus commissions. Although the Hidden Pivot resistance contained the gap-up rally that began the day, it was no match for the second-wind onslaught now in progress.

CCJ – Cameco Corp (Last:30.59)

Rick Ackerman — Wed, 13 Oct 2010 22:01:14 +0000

Cameco, a uranium play, has a chance to emerge from three years of purgatory if it can convert the nascent impulse leg shown in the chart into an abcd pattern that eventually reaches its target. The impulse leg is promising already, having exceeded the requisite internal and external peaks on the weekly chart as well as a 29.98 target. It needn’t even add a third peak — last January’s 33.74 — to prove itself. I’ve sets screen alerts significantly above and below current levels and will update guidance if either is hit.

DIA – Diamonds (Last:107.89)

Rick Ackerman — Fri, 01 Oct 2010 02:23:38 +0000

If a Hidden Pivot support at 107.59 is hit with DIA having gone no higher than 108.14, bottom-fish there by buying two October 108 calls. They should be tied to 107.52 stop-loss in the underlying vehicle. To avoid paying up for the calls, a strict no-no in my book, I suggest monitoring the bid/asked spread as the stock closely approaches the target. If you don’t know how to use an option calculator — as why should you? — the best way to determine how much to pay for an option is to determine how much the pros are paying for it. _______ UPDATE (10:25 a.m. EDT): The trade was a non-starter, since DIA went no lower than 108.11 overnight.