2-5-2019 $NEM $X

Stock Overview: $NEM has gone on a big run with the rest of the gold sector with the spot price of gold moving higher over the past few weeks.

Market Overview: The market opened up green and has been grinding higher all day on optimism for Trumps SOTU speech tonight.

Technicals: At the time of the trade the market was green and $NEM was slightly red. The daily prior high was 34.20, prior low 33.31. Weekly prior high 34.25, prior low 32.67.  The stock opened up lower with rest of the gold mining stocks & couldn’t take out yesterdays HOD in the first our of trading.

Trade: The trade was buying puts after the stock broke below VWAP (34.02) & failed to reclaim. The stock was at 33.95 when the trade was entered risking HOD $34.15.  The market was also grinding green higher putting added pressure on the gold sector.

Summary: Entered the Feb 15th 35.50 monthly puts with stock at 33.95. The trade was green right from the start rejecting $34 and slammed lower in my favor. My target for selling was bottom channel 33.55, but the stock never made it down that far hitting only 33.69.

The first 5-min green candle after the quick drop should have been my signal to sell & 9 times out of 10 I would have. For whatever reason, I gave it more room to drop even though the daily/weekly candles are both working against me – that is a big mistake. Should have reasonably covered mid 33.70s and doubled my gains. Could have also re-entered basically the same trade for another quick move. Instead I settled for a small gain.

  1. Daily Candle w/ Lower low Lower high – No
  2. Weekly Candle w/ Lower low Lower high – No
  3. Above 200 Day MA – No
  4. Green market – overall market & sector weakness – Yes

 

Result: – +.08 contract  (GAIN)

 

Trade Plan
Stop:$34.15
Entry: $33.95
Target: $33.55

Actual Exit: $33.84

Risking .20 to make .40

 

 

Stock Overview: $X has been strong recently with both the weekly & daily candles showing higher highs higher lows. This strength comes after nearly a year long downtrend.

Market Overview: The market opened up green and has been grinding higher all day on optimism for Trumps SOTU speech tonight. The idea was that this would also help the steel sector catch a bid.

Technicals: At the time of the trade the market was green and $X was slightly green. The daily prior high was 22.88, prior low 21.74. Weekly prior high 22.86, prior low 19.95.  The stock opened up lower and immediately snapped green just like yesterday.

Trade: The trade was buying calls after VWAP was reclaimed and held. The stock also broke its daily/weekly candle range. The entry was 22.88 risking the morning low or a 10 min candle close below VWAP.

Summary: Entered the Feb 15th 20.50 calls with the stock at 22.92.  This wasn’t necessarily a chase, but wasn’t my best entry either. After an all morning grind above VWAP the stock popped up to 23.23, with my target being 23.39 of course (a small gap from Dec 4th). Once again, I failed to exit on the upswing and got hurt on the option spread. A lot of these low volume stocks have wide spreads, even for monthly options which makes entries & exits quite difficult.

 

  1. Daily Candle w/ Lower low Lower high – No
  2. Weekly Candle w/ Lower low Lower high – No
  3. Above 200 Day MA – No
  4. Green market – overall market & sector weakness – Yes

 

Result: – +.09 contract  (GAIN)

 

Trade Plan
Stop:$22.69
Entry: $22.92
Target: $23.39

Actual Exit: $23.08

Risking .23 to make .47

 

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