-- Posted Thursday, 7 June 2007 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Thursday, June 7, 2007
“Phenomenally accurate forecasts”
We’ve gone disdainfully against the trend twice so far this week, risking bupkus while buying shares of Yamana Gold and shorting Fannie Mae. Yamana is a favorite in the Rick’s Picks chat room and gets hyped daily, but it had been a while since we last took a bullish position. Here’s the actual recommendation as it appeared in the Touts section of Wednesday’s edition: “If the ever-popular Yamana pulls back a bit more this morning there are two Hidden Pivot supports where we might attempt to get aboard for the next bullish push: 13.78 and 13.51. You can try at the higher number, a midpoint, with a 3-cent stop-loss, but officially we'll bid a penny above the lower, at 13.52, with a 13.49 stop-loss, 400 shares. If you'd prefer to substitute options for stock, the July 15 calls (AUYGC) would be a quite decent buy for 0.35.”
As it happened, Yamana bottomed at 13.53, a single penny above the target, and the calls traded down to 0.35, allowing us to acquire either or both at a promising low. As always, we nailed down a partial profit early on, so that even if we get stopped out now slightly below where we got long, we would still do no worse than break even. The trade looked quite promising by day’s end, since the stock rallied 32 cents, to 13.85, in trampolining from our predicted Hidden Pivot support.
Fannie a Ripe Short
Fannie Mae shares were just as obliging, allowing us to load up on put options just as the underlying stock was making its exact high on Tuesday. Here’s the recommendation as it appeared in Tuesday’s Touts: “Fannie Mae will reach potentially short-able ripeness if and when it gets to a Hidden Pivot resistance at 67.91 that was noted here earlier. When the time comes, we'll try shorting at that target using June puts and a tight stop-loss just above 68.00. For now, though, the trick is to catch a ride without getting savaged by openings like yesterday's, when Da Boyz pulled the rug out in the opening minutes. The stock looked bound for at least 65.70 (a Hidden Pivot) when the bell rang, so let's see what happens this morning. We can pick up some leverage by attempting to short the stock, buying July 65 puts when Fannie first touches 65.68 on the way up. Use a 65.85 stop-loss if you do.”
Free Calculator!
Fannie’s actual high occurred at 65.68, allowing us to buy some July 65 puts just as they were bottoming that day at 1.55. We cashed out half of them the next day for a small profit, effectively lowering the cost basis of those that remain to 1.35. Now, if the stock stays weak for a couple more days, the trick will be to short a like number of July 60 puts for s much as we paid for the July 60s. That would be legging into a $5 vertical put spread for “even,” giving us a shot at a profit of as much as $500 per spread come July expiration, with no possible loss. If you’d like my detailed description of this strategy that appeared in Stocks, Futures & Options magazine, as well as a Hidden Pivot calculator, just click here.
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Seminar Opportunity
Only a few Australians have signed up so far for the June 30-31 online Hidden Pivot Seminar, so if small class-size appeals to you, this is the session you’ll want to attend. The seminar will likely be the last I will offer at a time of day that is convenient to students from Australia and New Zealand, but the show will go on regardless of how many students enroll.
If you have been waiting for just such an opportunity, please click here (then click the “Upcoming” tab) to reserve a place in the classroom, or here for detailed information about the course itself. Incidentally, these hours will work for anyone in the U.S. who would prefer to take the course in the evening. The hours, in Eastern U.S. time, are from 6:30 p.m. to 9:30 Friday and Saturday, June 29-30. This translates to 8:30 a.m. to 11:30 a.m. Sydney time, Saturday/Sunday; or 6:30 a.m. to 9:30 a.m. Hong Kong time.
For All Graduates
Incidentally, all seminar grads will soon have free access at all hours of the day to a recorded version of the seminar, as well as to the Q&A forums held in conjunction with each class. In addition, I am in the process of creating an advanced tutorial built around some especially difficult charts. It will also be free to seminar grads and accessible round-the-clock.
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2007, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Thursday, 7 June 2007 | Digg This Article | Source: GoldSeek.com
