Tuesday, February 8, 2011

New Trade - CBS


Jeremiah 29:11
"For I know the plans I have for you," declares the LORD, "plans to prosper you and not to harm you, plans to give you hope and a future."

CBS - I'm getting back into another trade here. After the last trade (and hitting the target/resistance), it had a pullback. The nice thing about the pullback is after a strong down day the buyers came right back in and drove the stock price back up - they did this at a higher price level than that last level of support. This tells me that the buyers are strong.

I've had 2 days of consecutive closes above the level of resistance, the stochs are pointing higher and the MACD looks like it's getting more bullish. The volume is dropping off as we are going higher, however that is a weak point. We've already been to these levels recently and we really don't need volume to accompany the buyers going back up. IF, we were going to NEW RELATIVE highs and the volume was dropping off like it has been, then I would be concerned. But at this price, no worries at all.

Another thing I really like, check out this intraday 5 minute chart:

Notice how the last part of the day, as the prices were going higher, volume was coming into this stock. This tells me that the buyers are here and they are driving it up.

My target is the next level of resistance above - here's a longer term chart to identify this target:

I got long a June 19 Call Option for $2.80. June was the closest option to 90 days out. The other option, March, but it only had 38 days - MUCH TOO close for my liking.

We've got the stop 2 support levels below. From here, we just relax and let the stock do whatever it is going to do.

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