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Bret Kenwell's  Instablog

Bret Kenwell
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My name is Bret, I am an independent trader that is always trying to end each trading day with a lesson or takeaway. Always doing best to stay humble and realize I am the surfer, not the wave; in relations to the market and myself. Have no allegiance to either the bull side or the bear side. I... More
My blog:
Bull Horns & Bear Claws
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  • Bull Horns & Bear Claws -- My Favorite Stock Is Overbought. What To Do?

    I have been a big advocate of Ford (NYSE:F) since November. I started to like it in September, as it was turning bullish, but sometimes that stuff can fall apart and you're left holding a bucket of crap. In light of that nothappening to me, I decided to wait. Knife catching and bottom calling doesn't work for a lot of people and typically, I'm one of them. I focus on momentum and reversals, though reversals don't pick out tops and bottoms -- for me, they're near supports/resistances, overbought/oversold, things like that.

    Ford is no exception. You have to be emotionless when trading and investing. I love Ford, but man, not if it's going to cost me money!! Now I've been in and out of the March options from the $10.50 to $13.50 move that we've seen in Ford. If you think the 30% in the stock over the past two months has been big, imagine what it's been in options! Yeah, a real dough-roller.

    I am still long Ford, but have begun selling calls against my positions. This has the potential to not work out, something that will make me very unhappy. I have sold February 13's against my position and am long the March 13's as well, getting myself into somewhat of a pickle, especially with Ford reporting earnings at the end of January -- a time when I do not plan to hold short calls.

    So what do we do? My thoughts and goals are that Ford will pullback. It's looking more and more inevitable, despite the resilient strength Ford shares continue to demonstrate. For the record, I'm not happy about the short 13's, but what can you do. It was originally a Feb 12/13 bull call spread. But the 12's were too valuable, the spread wasn't widening quickly enough and I didn't want to be left with a spread worth what I paid.

    So I sold the 12's for a handsome gain and bought the back-month 13's. I know these will lose value on a pullback, but not as much as the Feb's. If it pulls back (and I'm sure it will) I'll look to unload the Feb's for slight gain (hopefully) or at break-even. Then add to the March 13's and get some popcorn for the rise to $15. Here's a 3-year chart of Ford, just to get an idea of its freakishly bull-riding price action:

    (click to enlarge)

    (Note the RSI levels over the years).

    ...(to read the rest go to my blog at Paid2Trade.com)!

    Don't forget to bookmark my blog and follow me on Twitter @Traderboy23 for instant updates when I post.

    Disclosure: I am long F.

    Tags: F
    Jan 08 8:41 AM | Link | Comment!
  • Bull Horns & Bear Claws -- My Two Main Holdings & The S&P Will Consolidate

    Aside from trading around the dips and rallies, Ford (NYSE:F) and Seadrill (NYSE:SDRL) are my two main longs right now. I don't trade around them and have occasionally changed the options around, but have essentially held them long since I started writing about them several weeks/months ago.

    I think both of these stocks have the ability to continue moving up and that's why I'm long via call options. Ford has a very strong chart with bullish sentiment all around. I think the $13 range is not a ridiculous figure, especially since Ford traded up $11.85 in early trading this morning. Here's the charts for the two stocks:

    Ford:

    Seadrill:

    $38 is the current trading price for Seadrill, which is nice to see considering I've been long for a few weeks. I knew going into it that I might be a little early, but I wanted to be sure not to miss the move. That's why I'm using April options, so that I have a while for this move to play out.

    Like I've posted several times before, the last two times Seadrill breached its 200-day simple moving average it...(to read the rest go to my blog at Paid2Trade.com)!

    Don't forget to bookmark my blog and follow me Twitter @Traderboy23 for instant updates when I post.

    Disclosure: I am long F, SDRL.

    Tags: F, SDRL
    Dec 19 11:35 AM | Link | Comment!
  • Dow And We're Seeing Today

    The Dow Jones Futures Market and what I see. Fellow stocktalkers, not much a blog entry, just something for you to look at:

    (click to enlarge)

    This a screen shot of the 15 minute chart for the Dow Jones e-mini futures. Just giving you guys the sense of direction and trend so far today.

    Aug 10 2:34 PM | Link | Comment!
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