Boeing (BA): Descending Triangle

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Boeing has been trading within a Descending Triangle consolidation mode for many months. This chart pattern is not for investor (cannot make money from buy low sell high strategy) because the stock price is moving side way.

However this chart pattern is very good for Option traders and range trader (using CFD) for short term trading.

BA Nov6-2014

Option Strategy

  • Short Vertical Call Spread near Resistance – Bearish Direction
  • Short Vertical Put Spread near Support ($119 has been a reliable support, also the 38.2% Fibonacci Retracement Level) – Bullish Direction
  • Short Iron Condor between $117 and $131 – Non Directional & Premium Collection
  • If $119 support is broken, Long Put if Vega is low.

Range Trading using CFD Strategy

  • Short at Resistance (Declining Trend Line) 
  • Long at Support (at about $119)
  • About $10 range

Original Post by Marubozu My Stocks Investing Journey

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Honeywell (HON): Shorting Opportunity!

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Honeywell is currently trading within the range between $90 and $98. HON is facing the Rectangle resistance with a Hanging Man.

HON Nov6-2014

A few ways to short sell US stocks:

  • Long Put Option – Almost unlimited profit (when stock price reaches zero) with maximum loss defined but time sensitive.
  • Short using CFD (Contract for Difference) – Almost unlimited profit (when stock price reaches zero) but unlimited losses also (when the stock price goes up to infinity theoretically)
  • Short Vertical Call Spread – Limited Profit Limited Loss.

Note: When the stock market is at the high (especially now at historical high), it is essential for everyone to learn how to short sell safely. Short selling is a very important skill for a trader and investor (to hedge the portfolio which already making money).

Original Post by Marubozu My Stocks Investing Journey

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Stock Market in RED! Is It Time to Short the Fear?

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Original Post by Marubozu My Stocks Investing Journey

DIA, SPY, QQQ and IWM all broke the support last Friday and VIX hit almost 2 Years high at 21.24!

However, DIA, SPY and QQQ are still not in technically bearish territory yet as they are still above the 200D SMA (trending up). Only IWM is officially in the down trend. Watch out for a technical rebound at 200D SMA.

DIA Oct10-2014 SPY Oct10-2014QQQ Oct10-2014IWM Oct10-2014

Looking at the VIX past 2 years pattern, the Fear will not last forever if there is a rebound at 200D SMA support. It is a high winning probability trade by shorting VIX at this level.

VIX Oct10-2014

Healthcare, Consumer Goods & Utilities (Defensive sectors) are the better performing sectors relatively in the last one month. Technology & Basic Material are the worst performing sector. This is a typical sectors pattern in the bear market. Beware of the Big Bear Awakening!

S&P500 Heatmap Oct10-2014 Sector Oct 10-2014

Plenty of Trading Opportunities during the recent sell down:

  • Short Call Spread on DIA, SPY, QQQ  or IWM (after breaking the support)
  • Short Call Spread on VIX
  • Short Put Spread for DIA, SPY or QQQ (when rebound from 200D SMA)
  • Iron Condor (Sell Volatility)

 

Disclaimer: This is NOT the recommendation or trading tips. This post is for own analysis only.

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