Here's a "Max Pain" update with options expiry coming up at the end of this coming week.
RE:
Message 15140387
Message 15147272
One week ago, the stocks from Greg's list with the greatest discrepancy from the Max Pain point were:
BRCM: 32%
ORCL: -23.5%
JNPR: +23%
QCOM: -8%
EMC: 5%
These discrepancies are now:
BRCM: -10.7%
ORCL: -30.4%
JNPR: -1.1%
QCOM: -9.5%
EMC: -5.5%
In the last week, the Max Pain point did not change for ORCL, but for all the others it dropped down one strike.
So, BRCM has rallied (and/or was pushed) right through its Max Pain point, and now sits way above it; for ORCL, the discrepancy has gotten worse over the past week; JNPR rallied right about to the Max Pain point, but meanwhile the Max Pain point dropped down one strike, so JNPR slightly overshot the mark; for QCOM, the discrepancy between the stock price and its Max Pain point stayed about the same; EMC also rallied right to where its Max Pain point had been, but in the meantime its Max Pain dropped by one strike.
So, BRCM and ORCL are still way out of whack with their Max Pain points, but the others are very close. This, despite the fact that these two should have had the greatest tendency to gravitate towards their Max Pain points. It will be interesting to see how this plays out next week; if it is true that BRCM and ORCL have a high tendency to "want" to finish the week at their Max Pain points, then they should move strongly next week (BRCM should correct down from 123 [current price] to 110 [Max Pain point], and similarly ORCL should also correct down from 32 [current price] to 22.5 [Max Pain point]).
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BRCM:The chart on BRCM suggests this may well be in the cards for next week. BRCM is testing overhead resistance from its declining 50 day ema, and looks like it is running out of upward momentum there technically. Stochastics slowing, and overbought; Williams %R and MFI both extremely overbought. But, there are no clear sell signals at the moment. So, BRCM might become a good short for next week if technical sell signals appear, and if the Max Pain point doesn't move up substantially. My guess is that sell signals will begin to appear early next week since the stock is overbought. Also, the recent candles suggest weakness at the test of overhead.
askresearch.com
Also, on the intraday chart, BRCM has gotten ahead of itself, and looks overdue to test support at the rising intraday moving averages. If it fails there, that would be a good short entry point IMHO.
askresearch.com
The hourly 5 EMA/8 SMA shows early OBV and stochastic sell signals, with a crossover sell signal not quite in place yet, but looks imminent:
207.61.23.99
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ORCL: ORCL has been bumping against overhead resistance from its now horizontal moving averages for about a month now:
askresearch.com
This chart is less clear to me, but does not suggest that ORCL will break out above overhead here. However, it could continue sideways in a trading range also.
ORCL's intraday chart shows it has already failed at a test of support at the 200 min ema, and has rallied back to test that same level, which appears to be offering fairly stiff resistance so far:
askresearch.com
On the hourly chart, there is a clear 5 EMA/8 SMA crossover sell signal, which was preceded by technical sell signals, and confirmed with 3 subsequent bearish candles:
207.61.23.99
So ORCL also looks like it may trade down next week to approach its Max Pain point. One thing worth noting with regard to ORCL: there is a lot riding on this. The dollar value of the contracts which will not expire worthless if ORCL does not move relative to its Max Pain point is almost $1.8 billion. That ought to stir up the action in the options pits and the exchange floors.
Besides these, of the stocks in Greg's basket, the following are also showing marked discrepancies from their Max Pain points:
EMLX: -20%
BMCS: -24%
SEBL: -24%
WCOM: -20%
WMI: -24%
All are trading around 20% or more higher than their Max Pain points. These also might be considered for potential short positions in the coming week.
As always, JMVHO.........YMMV
WS |
