Tuesday, January 26, 2010

RIMM - Put -->Put Calendar - by Joseph


Trade not activated yet as market is up today.

Technical Analysis:

RIMM is currently price at 61.41. The price is in a downtrend, dropped below 50ma two days ago. It is also below 20ma. The price is sitting on the lower Bollinger band. The Bollinger band is showing a sign of expansion after contracting for two weeks. MACD history is showing sign of downward momentum. The price broke a neck line of a Head-and-Shoulder pattern.
Volatility is at 52 week low. Expectation is that it will go up.




Fundamental:
Earnings on 12/17/2009. The price gapped up the next day, but the gap is filled on 1/12/2010.


Expectation: The possible support is $58, and the next is around $55. $55 is also the measured move of the Head-and-Shoulder pattern. The price target should be hit in two weeks in the market is bearish.

Trade structure:

Leg into a bear put diagonal trade. BTO June 60 put at $5.7 first. When the price drops, STO either Feb 60 put or Feb 55 put, depending on the price movement.

Primary exit: 30 to 50% ROI.

Secondary exit:
Slightly bullish: Convert the trade to Put calendar (STO Feb $60 put).

Very bullish: Convert the trade to Bull put calendar (STO Feb $65 put)
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4 comments:

  1. InnovestorJanuary 28, 2010 at 11:10 AM

    Joseph activated the put trade for RIMM when it went up 2 days ago. It proved to be temporary.

    BTO June 6o Put for 2.09

    ReplyDelete
  2. InnovestorJanuary 28, 2010 at 11:11 AM

    Sorry, the trade should be BTO June 60 P for 5.09

    ReplyDelete
  3. josephJanuary 28, 2010 at 12:06 PM

    RIMM turns bullish. Adjust the trade to double calendar.
    STO FEB 60 PUT at 0.9
    STO FEB 65 PUT at 2.78
    BE for FEB expiration date is $59.7 and $67.4
    If the price keeps going up, will roll the FEB 60 put to FEB 65 put.

    ReplyDelete
  4. josephFebruary 11, 2010 at 9:22 AM

    Close the trade with slight loss today since RIMM is above $67.4.

    ReplyDelete

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About Me

An engineer by training graduated with B.Sc (hons) and MBA from Strathclyde university in Glasgow, Scotland. Started as an engineer in R&D for 3 years with Philips. Then, worked with DuPont for 13 years. Last job was VP, Marketing for Asia Pacific. Left to start a number of companies in various segments which include a large electronic distribution, a VoIP provider, an internet trading portal in Australia,and an executive training consultancy firm. Have listed companies in NYSE, Australia Stock Exchange, Singapore Stock Exchange Main Board. I was on the Board of Directors for 1 company listed in Thailand, 1 in Singapore and 1 in Australia. Was in the senior management of a company listed in NYSE. Still holding major share positions in the VoIP and Executive training companies. Both are private companies.

Disclaimer

These articles merely reflect the opinions of this author and are by no means a guarantee of future economic conditions, market or stock performance. Though the author strives to provide accurate and relevant data, he sometimes relies on external sources and cannot assure the reader of the accuracy of these external sources. Additionally, these articles are provided for INFORMATIONAL PURPOSES ONLY and are NOT MEANT to provide investment advice to anyone. For investment advice, please consult your professional adviser.