Better Late Than Never...

As predicted, Wednesday is my heavy workload day, and therefore it does take me away from getting to the blog to provide the usual useless insight, trades, and educational posts. I must reiterate what a glorious advance the market made today. I am also impressed with all the trades that you have thrown out in the comments section. What's funny is that we all have so much in common. We are all watching the same stocks!

I imagine that the market continues to drift higher tomorrow and with that hopefully we will see more continuation out of our bullish trades and breakouts. Since I am in a pinch for time, take a look at this chart and tell me what you see...

A couple questions I would like to see answered are....where is this stock going (target price) and how long do you think it would take to get there? Next...would you trade this and why? I'll ship my opinion on this priority mail first thing tomorrow. Until then, stop by and pay me a visit at Master Talk tonight. Session 1.

This baby is on my "Close" watch list, but has not made it to my "Look At During the Day" Watch list. The later being the list that I am ready for a signal to trade. I have PCAR in a diagonal channel, The past 3 days action have me out of sorts. I was waiting for it to come back down to about $61.50 and bounce. Now that it has turned up I think it needs to make a higher high to stay on my list. If it breaks down I will not get in on the bounce. There is not enough volume the past 3 days to pass my rules. I would love to hear what other people are thinking

(still in LVS and riding the ATI stock train also) As of today I am up 16% on ATI stock and almost 21% on LVS stock. Man I wish I had been in options on them.

I just think it is harder to lose $$ quickly in stocks and until I can get my entrys and exits down options offer too many risks. That being said I entered some Jan $80 calls on JCP today. Here is to hoping Santa's all around the country shop JCP ;-))


Keep an eye on VIP. This stock provided one of the best trades I have had this year, and there is some good news/price movement brewing on their price chart.



I see a bull flag,possible 4 point move in about 4 weeks. i'd like to see move volume begore entering this trade. I was in this the past 2 weeks and rode the breakout at $62 to $66.



This stock trades in the cyclical trucks segment which has seen selling over the last couple of weeks but has been in a strong uptrend overall. This stock broke out of an uptrending channel on Nov 14, retested that upper channel on Nov 27 as support and is now bouncing up. The target is based on the width of the channel it broke out of which I calculate to be around $7. So $7 on the point of breakout puts the target at $70. The ITM January strike of $60 only provides a 1:1 reward to risk. The OTM January strike at $70 is right at the target so its value would only be whatever time value is still in it and I would have to hope it kept going. Todays news indicates they are cutting back on production which suggests to me that orders are slowing.

Personally, I would look for a different trade.


Doh, I didn't calc that risk correctly. Its more like 2.3:1 on the ITM Jan $60 so I would reconsider that as a trade with a stop at $64.


Stock - PCAR
Uptrending stock hitting all time highs. Channel price pattern has average move of 8 pts...time frame of 4 - 6 weeks for each move.

This is a trade to place a call on, but I would wait to watch to see what this stock might do. It has a pattern of retracing before it bounces off support and heading up again. Ideally, a bounce off support at about 63 would be a good entry point, making the target 71. This stock has been increasing its moves over the past 7 months, therefore, I would wait to see where this stock is headed right now.

I would definitely trade this stock, but would wait a few days to try to optimize profits by a better entry point. A Jan 60 Call would be the trade.


Jeff -

I gather this is PCAR. Hard to see on the chart. Bull Flag with a potential 7 pt move if I am measuring correctly. Awaiting the breakout with volume.


If this is PCAR.. tough to see on screen, I see bull flag as well with a 6 pt move expected upon break of resistance (66) with good volume(i.e., better than 20 day avg). Thanks as always for your insight Jeff


PS - I expect the move to take 4 weeks and would go for a January or February call 1 or 2 strikes in the money, looking for a delta of 75 or better.


Just a little "insider" information that you might want to factor into your thinking, particularly if you are inclined to get into this stock for a long period of time. All diesel engines manufactured after Jan. 1, 2007, will be subject to new stringent emission regulations. The added cost on a class 8 truck (Paccar's main market) is expected to be in the range of $5000. Everyone in the industry is expecting a significant sales downturn, and the news mentioned above would agree with that. Personally, I may wait until January and ride the stock down with puts.

John M.


The market has know about the change in diesel engines for some time now, right? I remember you brought this up when I took the first trade on that last support bounce. Keep in mind that the market represents smart money. They know the conditions of the company, and yet they are still buying! At least wait for price to confirm this theory. I used to use my own interpretations of news in the past unitl I figured my opinion was irrelevant. It was the markets opinion that mattered.


Jeff - I agree with you completely. I was just concerned about some comments that looked like some were thinking about taking a long-term position on this stock, and I would certainly think that drastically reduced sales (some are predicting a 25% drop in the market for large trucks) will affect the value of this stock in the long term. Short term I would just go with the market, although so far today PCAR is down $1.59. Hopefully it will bounce back by the end of the day.

John M.

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About me

  • I'm Option Addict
  • From Saratoga Springs, Utah, United States
  • I am a professional trader and an instructor for Investools. I've had relations with the markets for 9 years. Born in Concord, CA, but reside in Saratoga Springs, Utah. Father of THREE, Husband of one.
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