Thursday, July 24, 2008

DUG - Update

DUG was first highlighted here on July 2 (that special day for me, every year). It closed on that date at $27.89. A couple weeks later I reviewed DUG's progress in my July 15 blog. It closed on July 15 at $32.59. Today DUG closed at $36.69. Let's take a closer look.

The chart above reveals a Triangle Buy signal on July 3rd at 29.08 and DUG is in little danger of any reversing Sell signal.

This is an updated version of the orginal Weekly candlestick chart. There are three resistance lines drawn on the chart at about 40, 45 and 50.

Finally, here is a Point & Figure chart, citing a recent Ascending Triple Top Breakout which projects a target for this run of 57. This gives us targets that range from 40 to 57, so DUG is another 10% rise away before even the most conservative target is met.

The DUG trade is a nice winner, up about 33% in the stock and well over triple digits in the October 30 call options.

Trades like DUG are the reason that only half of the trades need be winners. That gain on the options in less then one month covers any losses during the month plus a nice profit from what is left over. But the month is not over and I've moved my mental stop up to a win of +100% on this trade. Not bad for a worse case scenario going forward.

A

5 comments:

Anonymous said...

Ahh Allan:

Truly the Gods are smiling on you now.

You recall from my previous posts , I am fully "DUG" in in both the equity and the options. Gains below yours slightly on the equity, over 10% on the options.

Do you have any picks for The Greek Olympic Games? They start in two weeks!

As usual, we Greeks are fielding a leading team in Beijing. Expect us to compete only with the Australians in the overall medal tally.

For example, with all of this focus on China, what about your Chinese stocks such as "CHIT"?

Leonidas
Southern Greece

Anonymous said...

Sorry, Typo, over 100% on the options contracts.

Leonidas

Allan said...

what about your Chinese stocks such as "CHIT"?

Ah, Leonidas, if it were so easy.

I don't pick the stocks, they pick me. Chart after chart, rolling across the screen, then one jumps out and shouts, "Take me, take me."

Anonymous said...

Sounds like my experiences with women in certain flashy NYC nightclubs.

Sadly, I somehow LOSE money on such ventures.

Phil in NYC

Anonymous said...

The chart looks to be losing momentum, at least in the short term. The question now is whether I lock in the gains I've got and try to reenter at a lower price, or just sit on it and wait. My original target was higher on this one, but when I see a chart running out of steam that changes things.