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It makes you wonder. There are companies with no track record and no earnings that have price movements on a sneeze. I have been really looking closely at technical charts patterns that sure seem to predict price movements. In particular, opening and closing triangles for gaps up and down. ICST for example!
NXTR seems ready to pop up. FUSE looks like it may bounce off it's 50-day moving average to continue the zig-zap price channel movement.
XRAY traded some interesting option patterns today. 280 contracts for 25 May and 280 contracts for 25 August. Only 10 contracts for 32 1/2 May with a remaining open interest of 224. It appears the MMs are trying to depress (below $32 1/2) the XRAY stock price for tomorrow's options expiration cutoff. Volume was up today and traded 3 large blocks with the last sale of 1,000 shares on a down tick to close unchanged at $32 9/16s. Well, we should see some rock n roll tomorrow.
XRAY had another nice run up today as is quickly approaching the $35 - $36 new high zone. We are heading into Memorial Day weekend which means most traders will be taking off early. So, Friday should be a low volume but up day for most stocks. I would bet that XRAY will be higher Friday and Tuesday. Monday is a holiday and the markets will be closed.
XRAY had a 2-1 split not long ago and the post-split price was around $25-$26. The market makers have been pumping the stock on low volume the last two days FORCING IT to move higher. Now people, think! If you had twice as many shares and 100% capital appreciation from the split would you be tempted to take some money off the table? You better believe it! XRAY may be up on Tuesday in the morning, but you can bet the funds will start clearing out next week sometime!!!!!! The XRAY chart clearly shows time and time again that XRAY peaks with a new high and then retreats sharply for a few weeks. See for yourself. That is the fund manager's foot print!!! Set the RSI indicator and the 50-day moving average on the upper band. Notice the RSI at 70+ and stock price tops occur at the same time and then the RSI drops off towards 30. The stock price moves 4 to 6 points lower!
The volume will be hugh and the exit faster than you can say covered calls. WHAT DO YOU DO? If you are long on XRAY make sure you sell CCs in the money or at the money around $35 two months out! Tomorrow would be the best bet. Grab those big premies and sit back and watch XRAY retreat back to $30 to $32. The stock should come around again as we get closer to the XRAY dividend payment date and earnings release in late June.
If you are scalping XRAY for quick bucks, sell the stock, buy a load of cheap JUNE or July PUTs at the $30 strike price. You can dump the PUTs in a week or two for a nice $ chunk as XRAY corrects! This is a no brainer option scalper.
1. Sell CCs in order to cushion the pull back! Later you will cover for peanuts and keep the major portion of the CC premies. Especially, if you go deep into the money in the CCs.
2. Want to make 40% in two weeks. Load up on the cheap PUTs as XRAY's price peaks! You will be able to unload them at a significant appreciation. You will discover that you can make more money on XRAY by milking it in both directions.
XRAY is a slow pitch that you can hit home runs here and there. It's a CCing beginners stock for sure.