US Stock Market Trading October 12th 2006
HAL seems to be a very undervalued stock right now. It trades around 3/4 of its yearly highest price and although the graphic doesn’t look that good but the MACD and Price Oscillator is showing me that the stock is quite ready for reversal. On this one, I’m not going to buy it with options since I think there’s no imminent major momentum that will make the options price goes up (however, I do believe that the stock will go up based on a simple MACD indicator, I’ll tell you guys later around December). I got the fill at $27.61.
Yesterday (well actually this early morning but you have to excuse me that I live 12 hours ahead of New York…) I said that I’m going to put my (virtual) money where my mouth is so today I bought the options for KO (I despise UNH and X yesterday). So I long put at the strike price of $45 on November’s expiration. Why November? I’m not very sure about this but the expiration date on October’s contract is mostly around 20-ish this month (the time decay is really close — not good).
As you can see for KO below, MACD and price oscillator indicates that the stock is on its bearish movement. Look at how MA 5 and EMA 20 just made a dead cross several days back (which indicates the stock is bearish). And since KO is loosing many fronts on the business battle (against PEP, and in my country against some bottled tea), it’s a good short trade ;-)
