greenboy; RE: WDC and QNTM...
As I just posted to fellow cybertrader Ted, I ain't no Japanese Candlestick "expert" by a long shot; Rainier be da man here, amigo.
WDC and QNTM have been highly correlated. When we look at the weekly charts, it is interesting to note that QNTM bounced off of her UpTrend line, whereas WDC plunged through it. My strategy after the debacle was :
(1) Play the dead cat bounce in QNTM by buying a MAY 37-1/2 CALL when QNTM hit 35~36. If I had it to do over again, I would have bought the MAY 35's and sold them two days later, when QNTM opened at 38-1/2 (but I was greedy). I ignored the Doji signal that WDC gave me, telling me to sell out QNTM CALLS at the beginning of the next trading session. That is, I assume that since these two issues tend to be correlated, a Candlestick signal in one of them (WDC) is helpful when trading the other.
(2) Double-Up my QNTM options when QNTM re-tested support at 35~36. Right now, QNTM is stormin' at 38~38-1/2, and the options are up 20%. QNTM has near-term resistance at 39~40, greenboy. If I don't get greedy again ;-) I will sell to close these CALLS and at least re-coup what I lost during the WDC/QNTM debacle.
WDC and QNTM have tremendous implied volatility right now, and they are momentum / trading stocks in "normal" times. I think it's best to have a killer instinct with them. That is, wait until they give you a clear signal, like a Hammer or a Star or something, then JUMP ON THEM BIG TIME AND RIDE, GREENBOY, RIDE.
-Steve |
