This stock has been in a downtrend since mid 2006, with a more tightly contained downtrend that started in March 2007. It has been mostly bouncing between a pair of trendlines, with one break out to the downside in January. It has now come up to the resistance level and bounced down. The MACD and stochastics both provide confirmation because they are both at a high point and turning back down.
The stock is currently at $25.79, though it was at $26.07 when I got in. Support is currently around $21.10 and resistance is around $26.20. The 200-day moving average is also very close overhead at $27.69, so I’m actually using that as my exit point.
My exit orders are:
- Market order to exit if the stock trades above $27.75
- $0.10 trailing stop loss if the stock trades below $22.00
- Stop loss on the option at $4.20
April 22, 2008 at 7:18 pm
[...] bought this put on 4/7 for $9.50. My exit price for a loss was set to $27.75, which the stock took out [...]