EPI

EPI is an ETF which tracks Indian stocks, which have been on fire lately. It is currently overbought with both daily and weekly RSI & Ult Osc near 70.

STRATEGY: Buy Oct 27 puts when EPI trades at 26.00-26.25. Exit at 25.00-25.35.

This strategy could give 50-100% returns within few days.

UPDATE (Sep 23rd): Bought Nov 27 puts for 1.00 when EPI was trading at 26.30 and sold them for 1.35 when EPI filled the gap at 25.68.

35% profit in 3 days!

UPDATE (Sep 30th): Bought Nov 28 puts at 1.25. Will add more if it rallies next week. EPI may have another 2% upside after which it should pullback to 25.70-26.00 in W4 by mid Oct followed by a rally to new high in W5 by Diwali on Nov 5th. I will close my Nov puts at 26 and will look to short again around Diwali.

POTENTIAL LONGS WITH ENTRY AND EXIT TARGETS

1. CME: Entry at 220-225, exit at 250-260

2. DLB: Entry at 51-52, exit at 55-56

3. STX: Entry at 10.00-10.50, exit at 11.50

4. WHR: Entry at 75, exit at 85

5. VECO: Entry at 30-31, exit at 35-36

6. WDC: Entry at 23-24, exit at 25-26

PCLN BEAR CALL SPREAD- Aug OPX Play

Set up: Overbought based on daily RSI and Ultimate Oscillator.

Max upside target is 305-306 short term and I think it will pullback to 280's. I strongly believe PCLN will close at or below 300 (most likely 280) on August options expiration (OPX) based on current Open Interest in Aug calls and puts.

Strategy: Sell Aug 310 call and buy Aug 340 call for a CREDIT of 3.30 and above if it rallies next week.

GLTA

GLD- Going to 140?

I think GLD will hit 140 by end of 2010.

HOT

Earnings are on Apr 29th. Overbought going into earnings and close to major trendline resistance.

Pullback target: 50

Stop Loss: 55.50

EDIT (Apr 29th): Broke above 55 with volume. Next stop is 59-60

BAX

Oversold with daily RSI at 15. Bounced of the TL at 47.50. Next support is at 46.00-46.50. Looking for a bounce to 49.00-49.30

HD

Overbought and close to major resistance. Short at 35.70-36.00. Should pullback to at least 33.00

MAR

Overbought and approaching major resistance. Short at 34.90-35.10

Pullback target- 30

Earnings are on Apr 22nd.

Stop loss at 35.50

It will be a great short if it can get to 37.50-38.00, which is the next major resistance level after 35

SPY

Has been going up on light volume and been forming negative divergence.

APRIL OPTIONS EXPIRATION (OPX) PIN PLAYS

1. IWM: Apr 72/71 vertical put spread for 0.50 or less. Most likely Apr OPX target for IWM- at or below 70.00

2. M: Apr 24/23 vertical put spread at 0.50 or less. I think M will close at or below 23.00 on OPX Fri.



EDIT (4/12/2010): Removed BAC put spread. I was not aware of BAC earnings this week at the time of writing the original post.

IWM: 72/71 Apr put spread could be a safer play.

DIS

UP AGAINST MAJOR RESISTANCE. OVERBOUGHT WITH DAILY RSI > 80 AND WEEKLY > 70. ENTRY TARGETS: 35.60-36.00. PULLBACK TARGETS- 34.30, 33.60, 32.60

SPY OPTIONS EXPIRATION PIN PLAY

I think SPY will hit 116.3-117.0 early next week (upper channel resistance) and close at 115 (Lower channel support, 50 SMA and also the Jan highs) on Friday. I closed my IWM 66/64 put spreads early this week for a small loss. I will enter SPY Mar 117/115 put spreads at 116.3--117.00

The New Moon on Mar 15th-16th could mark an interim top.

GLTA

SPY

I still believe 115.50 max followed by a pullback to 112.50-113.00 by Mar 15th.

Bollinger Bands are tightening on 15 min and 30 min time frame. A big move is coming............

GLTA

SPY & RUT

RUT: Has retraced 61.8% of the move from 2007 highs to Mar 2009 lows. The SPX low on FRIDAY Mar 6th 2009 was 666.79 and the RUT high on FRIDAY Mar 6th 2010 was 666.02 !!!





My thoughts on SPY for next week:

1. Scenario #1: We could hit 115.00-115.50 early next week and then drop to 112.5-112.8 by end of next week. The lower trend line is the key.

2. Scenario #2: We could drop to 112 early next week and then rally to 115 area.

BOTTOM LINE: I think we will see 112.00-112.5 next week.

NEW MOON on Mar 15th could either mark a high or low of some sort.

I am 30% short via IWM Mar 66/64 put spread at 0.52


GLTA

BIDU

Broke out of the triangle. Target is 520

BIDU

BB are tightening and the stock is trading in a triangle. A $15-20 move (based on the triangle measured move) is coming......

BIDU

Refer to my original post dated Feb 6th-

http://stockmarketmasala.blogspot.com/2010/02/bidu.html

SET UP: Negative divergence on 30 min, 60 min and weekly charts. Daily RSI approaching 70. In the past, every time BIDU's daily RSI hit 70, it underwent 6-10% correction within 1-2 weeks.

STRATEGY: Mar 480/470 put spread.

ENTRY TARGET: 500 and above. The upper BB on the daily chart is at 512.80

EXIT TARGET: Feb 10th gap window and Jan 15th highs at 470-472. The 20 EMA is currently at 462 and rising. A 10% correction from current level will give us a target of 450.

38% retracement of the move from 435 to 500 will give 475 and the 50% retracement-468.

The middle BB on the daily chart is at 450.


GLTA

SPY

I think SPY will go to 109 before EOD Friday (OPX).

Strategy: SPY Feb 111/110 put spread. Possible 100% return.

FEB OPX WEEK PLAYS

I am hoping for a pullback in SPY to 108-108.50 before OPX Fri. The 60 min RSI is slightly above 70. Some low risk OPX plays-

1. BIDU Feb 500/510 bear call spread for a credit of 1.75 or above. If BIDU rallies towards 500 tomorrow, the credit will be 2.50 or above. BIDU will close below 500 on OPX friday based on O.I

2. POT Feb 115/120 bear call spread for a credit of 1.00 or above. POT will close below 115 on OPX Fri based on O.I

3. AAPL Feb 210/220 Bear call spread for a credit. AAPL will close below 210 on OPX Fri based on OI

4. SPY Feb 111/110 or 110/109 put spread. The max upside on SPY this week is 110.4-110.8 IMO (50 MA on the daily is at 110.8). Max return on those put spreads are approx 60% and 130% respectively.

GLTA