Herm, thanks for your observations on HWP. I will be watching with interest, and it's quite possible I will take another turn at short-term puts. This is quite a different play than I am used to - one usually wants to buy puts on WEAK stocks. But perhaps predictability is more important than having the primary trend with you. HWP certainly has shown a predictable pattern of correcting rather quickly from these kind of peaks.
For now, I bailed to cash on Thursday (since I am just trading long ITM options, 1-2 months out), not wanting to let premium drain over the long weekend and what I expected to be an eventless Friday. Amazingly, I eeked out a couple of hundred bucks profit in spite of a terrible market Thursday. Had I kept my INTC and MSFT calls, they would have risen further on Friday, but I didn't have the guts that that would have taken. :)
On HWP, yes, the stoch is still over-bought and needs to fall. And, yes, it may well tag the lower BB. But there's also a classic flag breakout with a breakaway gap. And stochastics often stay overbought for weeks on strong stocks. I wouldn't be surprised, then, to see it go to 100-105 before turning around and doing that. Of course, your sideshow is LEAPS, so I suppose you don't much care if it takes a little while longer to get there, and takes a short detour to the upside. :) |
