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Thursday November 20, 2008 |
Bedford
Option Review Recent Sample Issue
Bedford Option
Review
March 29, 2004
Volume 108, Issue 20
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Support
Levels |
Resistance
Levels |
|
Close |
S1 |
S2 |
S3 |
R1 |
R2 |
R3 |
| DOW |
10212.97 |
10170.60 |
10110.20 |
9909.20 |
10289.70 |
10365.20 |
10414.20 |
| OEX |
543.52 |
542.20 |
539.40 |
528.10 |
546.10 |
552.90 |
559.10 |
| SPX |
1108.06 |
1105.60 |
1101.60 |
1089.30 |
1113.20 |
1126.10 |
1135.20 |
| OTC |
1960.02 |
1945.90 |
1927.90 |
1896.70 |
1979.20 |
1990.10 |
2014.60 |
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We thought that bulls might get to the SPX 1,118
level Friday. As it turns the high for the session was just
1,115.30. Of course all of this occurred before the market went on to close
very near the worse levels of the session. The losses were modest in the
grand scheme of things -- after all, stocks had rallied better than 17 SPX
points Thursday -- but the weakness still leaves a negative impression going
into trade today. We have been looking for a good technical rally.
On the charts there was resistance at both the 20 and 50-day moving
averages. For today these averages are at 1,117.84 and 1,121.94
respectively. Although we are not the types to use indicators, both the
Stochastic and MACD indicators are just now turning higher so bulls do have some
room to move higher in the short-term but given the relatively weak volume off
the recent lows, there is going to be plenty of nervous selling near the
overhead moving averages. For bulls the good news is that we are now
entering earnings season and there have been very few warnings of note.
This should mean that bulls might get a boost from earnings. In the
short-term we will watch the SPX 1,105 and 1,101 support levels.
Friday in this section we wrote about a variety of
resistance levels assumed to be in-play for that session. The only one
that really came into play was the 38.20 percent retracement level of the recent decline
from SPX 1,163 to 1,087. The good news is that the market did not lose the
50-hour moving average at 1,106.40. We are looking for a pullback to that
level early today. Indeed, we would not be terribly surprised if bulls
did not return in large numbers until the 1,105 level was reached. If bulls
lose that level the last line of defense is the breakout level from early
last week at 1,102.
Portfolios
Stop and Pop
The Stop and Pop portfolio is a mixture of our best bullish continuation
patterns. Stocks are selected from a variety of bull flags, pennants,
symmetrical and ascending triangles. New positions are added when the
pivot level is triggered and removed when the stop level is hit.
Bottoms' Up
The Bottom's Up portfolio is designed to capture stocks emerging from key
reversal patterns such as the double bottom, head and shoulders bottom and
longer-term flat base. New positions are added when the
pivot level is triggered and removed when the stop level is hit.
Action Heroes
The action Heroes portfolio is our most volatile portfolio and strives to
identify stocks with dramatic changes in trend amid a surge in
volume. New positions are added when the
pivot level is triggered and removed when the stop level is hit.
Six Months in a Leaky Boat
The Six Months in a Leaky Boat portfolio looks for stocks falling out of
massive top patterns such as weekly head and shoulders tops, rounding and double
tops. In this case, sinking is a good thing.
Say It Ain't So
Occasionally stocks become over-owned and over loved. In such cases
declines come from the most unlikely of circumstances. The Say It Ain't So
portfolio looks for stocks rising to relative new highs on shrinking
volume. Rising wedges, small double tops and island reversal are common
here.
|
| Symbol |
Name |
Pattern |
Price |
Pivot |
Stop |
% |
|
| WHR
|
Whirlpool
|
Bear
Flag
|
68.12
|
71.50 |
72.90 |
-
|
| NE
|
Noble Drilling
|
Bear
Flag
|
37.71
|
39 |
41.90 |
3.31%
|
Featured Stocks
We're going to keep a relatively low profile today as we try to assess just
how strong is the conviction in the bull camp. We are looking to add one
new put position for Whole Foods (WFMI) if the stock continues lower.
Whole Foods WFMI) is building a huge top. The technical pattern is the
dreaded head and shoulders top formation. We want to sell weakness through
the 73 level only. A decline to that level would be a solid break of the
50-day moving average.
Open Option Positions
We had a pretty uneventful week,
last week. We are still holding MMM. Maintain parameters.
| Position |
Entry |
Current |
Target |
Stop |
+/(-) |
|
| 10
MMM
APR 80C
|
1.80 |
1.50 |
3.00 |
1.00 |
(300) |
| *
reflects closing
transaction |
Open Profits |
(300)
|
|
(s) reflects a short sale |
|
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TOTAL PROFITS THIS WEEK $0
The above mentioned recommendations are deemed accurate
they are not guaranteed nor can it be said that these strategies or recommendations will
result in a profit. The Principals of the New Daytrader
and the Bedford Option Review may have or may in the
future have positions in the securities mentioned above. Past performance is not
necessarily indicative of future results. Before trading options you should understand the
risks including the fact that when an option is purchased the entire premium is at risk.
In addition, anytime an option is purchased or sold, transaction costs including brokerage
fees are at risk. No representation is made that any account is likely to achieve profits
or losses similar to those shown, or in any amount. Any account may experience different
results depending on factors such as timing of trades and account size. Bedford &
Associates does not offer refunds for subscriptions in whole or in part.
Copyright
© 200 4 Bedford & Associates Research Group
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