Warning: This stock can be a heart breaker. Just as soon as you think you hit that home run, POW, right in the kisser! Either get in and get out, or protect your profits. Anyway, I've shown the daily and weekly charts above. What I find interesting is the confluence of, what appears to be, a bull flag (non-confirmed) and the .764 fib retracement from the Jan high to the Mar low. 12.26 is a 38.2% fib retracement, and 12.29 happens to be part of the measured move. 14 would be a 50% retracement, 14.50 would be part of the flag, and the 50 week xma is coming to that area. I have drawn and circled the weekly areas of interest on the daily chart (orange horizontal lines).
However, it has a lot of work to do, evidenced by the smoothed RSI and what-not. First it must hold the 50dxma or else the 20day comes into play. Second, it needs to break above 11.75 to the 12 area for me to believe it. We over here at Thurgy Capital and Bait Shop are not giddy just yet. The stock could just as easily turn down.
[Edit 11:20am] Legged into a spread, short the Jul 11's @1.50 to match the Jul 10's @.80. Will look to adjust tilt of trade based on strength going forward.
[Edit: 6/3/09 10:30am] Yes, this means I never have to look at the trade again and make a profit. Part of the advantages to not starting things in a 1:1 spread (providing the trade goes in your favor) is the higher premium collected from the short side. If I have an equal basis on each side, I'm happy. I short on the way up, or at once when I feel the stock is at/near a target and might pullback. But this all depends the plan in place before the trade. I prefer to keep this trade alive right now to have another look. Of course I could have sold half the position, but collecting the premiums for the short sells is the same thing to me. Each trade is different.
