New trade - COF

I entered into a COF Jan 07 80 Put position for $5.60 on 11/2/06. The stock had been on my set-up watch list since mid October 2006 when it retested the 200dma. The stock originally came to my attention when reading Tim Knights blog. I liked what I saw and added it t my list.

I was patiently waiting for the stock to give me a cross over signal on the STO (occurred on 10/27) and MACD (occurred on 10/30), and a breakdown below the 21dma on high volume (occurred on 10/31). For some reason, I did not look at the COF chart on 10/31 (missing the final buy signal) and 11/1 ( a 2nd high volume down day). I entered the following day. On the day of entry, it took me an hour to pull the trigger which facilitated me buying my put at the bottom for the day (a bit late, don’t you think!!!)… A contingent stop order was set at 79.00 based on resistance and allowable loss for a trade.

Look at how the trade is currently progressing, my indicators are showing that a short term reversal maybe on the way, however, I am going to see if the 50dma holds as resistance.

Lessons Learned on this trade so far:

1. Get over yourself and just pull the trigger. Trust your analysis and follow through

2. Check your watch lists daily. Looking at this trade, the stock had already moved 5-8% before entry.

Cheers - David