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Thread: Trade Updates

  1. #1
    Specialist Member RCox's Avatar

    Trade Updates !!!

    Trade Updates

    I am unable to find the thread with this week’s trades, so I will add the updates here. Just for reference, these were the previous trade ideas:

    1. The next week’s FOMC meeting puts too much uncertainty into the markets for weekly forex trades, so this week I will base trades ideas on stocks using longer term fundamentals. First choice can be seen in Biogen Idec (BIIB), which has consistently beat market estimates for both earnings and revenue. This is a contrarian play, as the stock saw a major sell-off last week. But with prices finding support at the 38.2% Fib retracement of this year’s rally, we are inline for a resumption of the uptrend as long as the 200 level holds. Look to buy monthly CALLS in BIIB at 210, targeting a long term retest of its all-time highs.

    2. On the short side, I will be looking to bet against AT&T (T). The stock has recently met resistance at its 52-week high despite posting quarterly earnings that were lower than analyst expectations. Recent downgrades from S&P show that the stock has limited upside, and this looks even more true when we look at the stock from a price perspective. Overhead resistance can now be found at 39 while we have no significant support until the mid-20s region. And all this points to excellent risk to reward when looking at sell positions. Look to buy one month PUT options in AT&T at 36.10.

  2. #2
    Specialist Member RCox's Avatar
    Biogen Idec (BIIB)

    Biogen Idec (BIIB)
    followed most stocks lower last week after the Fed threw water on the bullish side of the market. This decline brought the trade to the entry point, which was based on the 38.2% Fib retracement of this year’s rally. Prices did gap below here, but this is not entirely surprising given the wider climate of the market after the Fed meeting. I am not concerned about the trade at the moment, as next week’s close will be the real test. If prices manage to regain the 200 handle before the end of next week, the trade should close positive.

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  3. #3
    Specialist Member RCox's Avatar
    AT&T (T)

    The trade in AT&T (T) is looking very good at the moment, as prices have now convincingly broken support in the 35 region. The trade entry was at 36.10, and prices only saw highs of 36.40 before reversing lower, so the trade was in the money nearly from the beginning. The fundamental picture supports the case for further losses and the series of lower highs in the daily charts creates a very bearish scenario that will be difficult to overcome before the trade expires. We would need to see a convincing break of 36.40 before there is any cause for concern in the position, and this is far over head (and seemingly out of reach) at this stage.

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  4. #4
    Specialist Member RCox's Avatar

    In Forex trades, I have closed my short term positions in the US Dollar, specifically in the USD/JPY and USD/CHF. I am looking for new opportunities to get long on those pairs as I expect significant upside in both. But with the strength of last week’s moves, I opted to close the position and wait for better levels. We could see more profit taking in the markets next week, as conditions slow, and this could create new opportunities. I have also started building small positions in the AUD/JPY, as I am looking at the recent excessive weakness in the Aussie as being overdone. The AUD/JPY is currently trading near the 50% retracement of its latest rally.

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  5. #5
    Master Member vinayakm's Avatar
    Great pick on the AUD/JPY trade. I think I will benefit from the weekly call options on the AUD/JPY that you prudently picked for all of us here at BOTS!

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