Technical Traders:
The options listed on the QQQ play were incorrect as they were not far enough in the money to give the good delta to get that needed movement. The following is the play.
QQQ (Nasdaq 100--$39.95; +1.20; optionable):
STATUS: Another ascending wedge is being formed by the QQQ; the pattern has an errant high (from Tuesday) that at 40.97 tapped at the current level of the 200 day MVA (actually at 41.24 today). We are looking for a breakout from the pattern for taking aggressive positions, with a move over the 200 day MVA offering a higher level buy point. The index has had a nice run up from the September lows, and needed this consolidation. We will see if it can break both resistance levels. Target: initial, 42.50
BUY POINT: Aggressive: 40.50 on volume in the range of 113 million (was down Thursday to 83.6 million; avg. is 84 million). Stop: 37.67 (7%). Breakout over the 200 day MVA: 41.37 on similar volume. Stop: 38.47 (7%).
POSITION: January $33 calls to buy (QQQ AG).
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