Happy New Year & New Trade - WHR

Happy New Year. This blog has been a bit of a ghost town for the last couple of months. I have no excuse for it other than time. With the new born and the family being here from Oz for December things have been hectic!

I made three trades since my last post. Here is how they went.

Entered COF JAN 2007 80 Put on 11/2/06 - Stopped out on 11/27/06 for a loss of $67.92. I was anoyed with this loss. I modifed my stop order (FOR SOME DUMB REASON) to a a contingent order based on bid... The next day I was promptly kicked out at open!

Entered AEOS JAN 2007 50 Put on 11/30/06 - Stopped out on 12/4/06 for a $185.92 loss

Entered JEC JAN 2007 90 Put on 11/30/06 - Exited trade on 1/8/07 for a $554.06 gain

In the comming weeks, I hope to complete an analysis of my 2006 trades (all 12 of them :)) and post them on the blog in some sort of 'Take Stock of 2006' blog post series (sorry about the plan on words). Most of it is on paper - I just need to feed it into the machine!

++++ New Trade++++

I entered WHR just prior to the last hour of trading yeaterday (1/9/07). It has been on my watchlist for some time. It appeard to be in a channel from September, started to weaken at the beginning of December. After the dramatic mid December fall, I waited for the bounce up and entered the trade on the basis that the stock was making lower highs & lower lows. It looked to be making at a new lower high at resistance and starting to turn. Volume was below average for the day. I ented the trade @ 84.69, .40c below my resistance line. The stock closed @ 84.71. I was happy with my entry.

Entered 1/9/07
Stock price $84.69
Buy to Open - 1 Contract - MAR 90 Put @ $7.10
Total Investment 710+25.90 (commissions in & out) = 735.90
Break Even $82.90
Target Stock Price - $81.00
Option Target Price +/- $10.00
Stop @ $87.15 - 5c above 12/15/06 high

Here is the chart.

Today being the next day, I believe that I may have made a mistake entering this trade. The reason is that I relied soley on my trend lines to tell me when to enter, but did not look too closely at some of the indicators for conformation. Looking at them now I am a little uncertain. They do not apprear to confirm the expected move down. I prefer to see them all pointing down with cross overs on the MACD & STO. I clearly do not have that here. Today's price action is also worrisome. The stock busted through resistance. I will be watching this trade closely tomorrow.

We will see how it goes - David