One name in the Oil and Gas services sector gave a clue that a turn around higher was coming, Halliburton, $HAL. Back in late April it broke the bullish flag higher and has not looked back. Are you too late? No. The target on a AB=CD brings it to 50.93. That is more than 11% higher from the close. But quite often these extend to CD = 127% of AB or even 168% of AB. This gives a target higher to 54.75, near the target from a Measured Move out of the flag, or even 59.68. Midway from a breakout some may find the reward to risk unfavorable. But this can be handled by using options. Harmonics gives an estimate of mid July for ‘D’ to print. So one way to play it is to buy the July 46 Call for $1.62, where it was offered near the
close Monday, 3.5% of the cost of buying the stock. It also has 9 weeks to play out, plenty of time. If that is too much though you can plan to reduce the cost by selling some options against it. Selling the July 40 Puts for 37 cents, brings it down less than 3%, but opens you up to owning the stock on a close under 40 on July Expiry. You can cut off another 21 cents by also selling the May weekly 46.50 Calls, for a Calendar Spread. This is the same structure that we traded for clients in ExxonMobil today, $XOM, with a June/October 95 Call Calendar and short an October 85 Put. This can still be traded in $XOM, and the Exxon trade was easier to start as it just broke a long channel today, but the Halliburton trade shows a better example of how to play a stock that is running. Minimize your capital at risk and if selling naked options do it at a level where the stock is a good buy. Good Luck!
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New Website Tab – SPY Sentiment
Posted by Greg Harmon on May 20th, 2013 at 1:49 pm, Comments: 0
Just a quick post to point out an enhancement to the website. Subscribers know that I produce a lengthy weekly Macro post every Friday night, [...]
Top Trade Ideas for the Week of May 20, 2013: Bonus Idea
Posted by Greg Harmon on May 20th, 2013 at 8:07 am, Comments: 0
Top Trade Ideas for the Week of May 20, 2013: The Rest
Posted by Greg Harmon on May 19th, 2013 at 5:16 pm, Comments: 0
SPY Trends and Influencers May 18, 2013
Posted by Greg Harmon on May 18th, 2013 at 9:06 am, Comments: 0
Last week’s review of the macro market indicators suggested, as we headed into the options expiration week for May that the equity markets remain strong. [...]
Cleveland’s Best Linkfest!
Posted by Greg Harmon on May 18th, 2013 at 8:08 am, Comments: 0
Charts/Markets/Business/Economy You Might Not See Otherwise Investing now? Nervous? Here’s what to do USAToday Do you have enough money to retire? New study notes problems [...]
Dragonfly Capital Views Performance Through May 2013 Expiry
Posted by Greg Harmon on May 17th, 2013 at 6:01 pm, Comments: 0
Below is a synopsis of Dragonfly Capital Views Portfolio performance from inception September 14, 2011 through May 2013 Expiration. A positive month gaining 6.53%, and [...]
Which Way is Up?
Posted by Greg Harmon on May 17th, 2013 at 7:52 am, Comments: 0
Earlier this week I commented to one of my partners that the market felt like it was reaching the acceptance phase. More and more commentators [...]
Cicso Kid Was a Friend of Mine
Posted by Greg Harmon on May 16th, 2013 at 5:11 pm, Comments: 0
The last time Cicso, $CSCO, was a popular stock this song was hitting its stride. But following the Dot com crash it has been in [...]
Lights Out for the Shiny Metal
Posted by Greg Harmon on May 16th, 2013 at 8:15 am, Comments: 0
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
Dragonfly Capital Updates
- Jumping into the Big Oil Gush
- New Website Tab – SPY Sentiment
- Premium Earnings 5-20-13
- Top Trade Ideas for the Week of May 20, 2013: Bonus Idea
- Top Trade Ideas for the Week of May 20, 2013: The Rest
- Top Trade Ideas for the Week of May 20, 2013: The Rest Premium
- Top Trade Ideas for the Week of May 20, 2013: The Best
- SPY Trends and Influencers May 18, 2013
- Cleveland’s Best Linkfest!
- Macro Week in Review/Preview May 17, 2013