Riding My Investments

Being in the saddle as a "long" requires patience. There is not point chasing the market with additional buys when you are already long unless you see good technical trends that give you a reason to average up. As traders, we are buying the momentum. As investors, we are buying the value and growth.

With my current portfolio being primarily about value, there is less to trade and less to write about. Since last Wednesday, I have basically been "minding my p's and q's" and sitting on a position that has been moving higher.

I have, however, been selling some into strength. This market will retrace, even to just take some profits, so I want to be sure to take some chips off the table. On Friday, I sold half my AAPL May calls and the rest of the May calls were sold when the stock hit $165.00 this morning. My April AAPL calls expired and exercised as well.

That leaves me with the only other trade (other than a 10 minute trade I will mention in the P.S.) that I have made over the last three trading days: I bought some deep ITM ATI calls (Oct65 calls). I bought a few on Friday as a marker and bought a few more today.

I think the stock is almost done going down and $70.00 will probably be its bottom (at worst) on the latest re-trace. Yes, this is the same stock that I was short just a week ago, but the thesis is very different. Back then I believed that the X for ATI rumor was bogus and that the stock had moved higher on no reason (which was a profitable trade and may have been correct). Now, I believe that ATI will, in fact, exceed their earnings expectations on Wednesday morning and that the market (for stainless steel) will be described as "firming". By buying deep ITM calls, I am able to invest in ATI with less cash while paying just a small premium over a fairly long time horizon.

On other stocks, those that follow charts are sure to notice the re-trace in BOLT that looks strongly like a "handle" in a cup-with-handle formation (chart). I made the decision to just hold my long position right through the re-trace, but I am watching the $21.00 price level very carefully. This stock is thinly traded so one would expect volatility, but I don't want to give all my profit away either.

APPY is also struggling while GRMN may have found a bottom. I am planning on sticking with both for now.

P.S. On Thursday night with five minutes left in the trading day, I got suddenly got nervous about not hedging anything ahead of GOOG's earnings. I settled on buying a few SPY puts. Then, at 4:04 pm, GOOG announced and I was immediately able to cover those puts - something I wasn't sure was possible. I knew that the SPY options desk stayed open slightly longer than the trading day, but my 4:05 pm execution of an options position was a first for me and something that I will remember. Covering then cost me a LOT less than if I had waited until the open.