OptionSpreadTrades.com Weekly Forecast
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Last Week's Trades-
We entered one new trade this week with the Middlebury corporation and we are still holding two profitable positions with FOSL and STI. We're going to adjust our stop losses on these to protect our profits.
Stop Loss .80
Stop Loss $1.70
We are still in a downtrend in this market with our sell signal on the weekly chart from 1/14. Despite the fact that we are very oversold the market has continued to fall but we may be looking at a reversal soon as the ADX is at 42. Generally above 40 indicates a reversal of the trend. Also the stochastics are oversold and turning up, which also may indicate a temporary trend reversal.
The commercial traders have continued to be sellers over the last two weeks amidst the falling market. which indicates that we likely have some more room to fall.
Seasonally there is nothing special about this week. Although Monday has a slightly bullish tendency.
We are in deeply oversold territory, but the market still refuses to bounce. Again the general direction is down, but we are not discounting the possibility of some very substantial bear market rallies here. We have over head resistance at the 700 to 720 level and support below at the 610 level, which is the 1996 low. It is likely that we will take a bounce up, move sideways for awhile and then test the 610 level before this is all said and done. Again we do not want to be buyers here, but would like the markets to become more overbought before we enter any new trades.
Trades to Take
We currently have three trades on and would like to unwind one or two of them before we add to our positions. However if we find some good trades this week we will take them, but for now just sit tight and let the markets unfold.