Tuesday, August 18, 2009

Waiting for a Big Payday


Yes, stochastics are rolling over but Boeing is setting up for the standard three-period test of the highs on a weekly basis. As you can see by the chart above, Boeing is not breaking down as much as it might. The recent highs MUST BE TESTED.

With this in mind, once again the September 45 calls are quite attractive at the 1.30 to 1.40 range where they are currently trading. The previous weekly closing high was 46.69 providing the possibility of a 1.69 plus a month's worth of premium payoff by next Friday. Currently the stock is at 43.85.

Keep in mind, that if I'm wrong, you could lose all of the premium so this is not intended as a recommendation. It's just what I am doing and thinking in the moment. I also hold long-term puts on Boeing as I am overall BEARISH. But the trend is up, the formation is developing and anything could happen. With a previous high above 50 and low down to the 30s, I expect a big payday, one way or another.

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