David, right now, I'm pretty much on the sidelines. I am losing
on a small position of MU shorts, and rather than cover, I hedged
with some calls. The reason is, that I expect MU to be at 40 on
expiration Friday, so I will hold the calls, meanwhile, I will cover
the shorts today or tomorrow, and go long.
An interesting point on the shorts hedged with calls, is that it
doesn't really freeze the position. Earlier today when I checked,
the stock was down 1 1/2, but the calls were only down 1, so
my position improved.
I have followed Jack Raines on the Prodigy INTC thread for
about 5 years, and he is an expert in options trading. He does
some things similar to this. He buys long term leaps, and
keeps that position while he trades short term on options. If his
play is wrong, he doesn't lose his shirt.
MU is so strong in this upward channel, that I am a little hesitant
on downside plays, so I don't intend to increase my position on
the downside. My computer, SHADOW, did give a sell signal
this morning, but I will wait it out until I get a buy signal. Then
I will cover the shorts and go long.
Skeeter, if you are reading this, I also expect MU to be at 45-50
by March expiration, then a fast 8-10 point down correction.
You can then place your bets that regardless what the stock does
from April to Sept, MU will be lower in the calendar 4th qtr, than
the March high, as it has had that pattern 11 of the past 12 years.
Patrick |
