This stock has been in a downtrend since last May, and I traded an earlier bounce off a resistance level earlier this year. Since then, it has broken the trendline it was using as support, and is now using that line as a resistance level.
The stock has come up to this line again and bounced down, with confirmation from the MACD and stochastics. The stock actually closed the day up $0.09, but it was down by about $0.10 when I entered the position.
The stock is currently at $46.50. Support is around $38.15 and resistance is around $47.25.
My exit orders are:
- Market order to exit if the stock trades above $48.70
- $0.10 trailing stop loss if the stock trades below $39.30
- Stop loss on the option at $4.50
April 24, 2008 at 9:09 pm
[...] 1 MER Jul08 55 put for $7.75 April 24, 2008 — Saeed I bought this put on 4/22 for $9.80. The put was actually doing nicely as of yesterday, but today the stock surged [...]