This stock has been in a downtrend since May 2007. It was using a trendline as support until November when it broke below it and it now appears to be a resistance level. The stock has come back up to the line and bounced down. The MACD and stochastics also give a confirmation because they are both high and starting to head down.
The stock is currently at $29.90, and it was at $29.95 when I entered the trade. Support is currently around $26.60 and resistance is around $31.25. Coincidentally, the 200-day moving average is also almost exactly at the same resistance level, so this is also a bounce down off the 200 DMA.
My exit orders are:
- Market order to exit if the stock trades above $32.15
- $0.10 trailing stop loss on the option if the stock trades below $27.25
- Stop loss on the option at $2.00
April 22, 2008 at 7:21 pm
[...] bought this put on 4/8 for $5.40. My exit price for a loss was set to $32.15. Yesterday, the stock went up as [...]