For those that don’t trade Options this may not interest you unless you like strategy reviews. In the case of $MELI I wanted to sell the elevated Option premium for Earnings and use stock (if need be) to hedge if price got anywhere near my short strikes.
Here was the trade:
With a credit of $12.65 I have a substantial range to work with:
$147.65 to the upside
$117.35 to the downside
I elected to use $140 and $131 as my levels to hedge with stock (if need be). So far I have not needed to hedge. This trade was done with an exception to my 1st week rule.
– DM 9:15 AM CST
The 6th man, MELI (Mercadolibre Inc.), continues to come off the bench with flashes of greatness. However, it can not sustain a close above 100. Nonetheless, I will continue to trade the stock in hopes of a sustained move and hold of the 100 Roll.
UA (Under Armour Inc.) is the newest member having been added this week. Here is the updated list with comments:
I have 2 stocks in the Fab 5 that have had a distinct difference in performance this week. Both have been on the team for quite some time, have completed the 100 Roll, and I have noted that they would be kept on with a tight stop.
The stock with continued Promise is NKE (Nike Inc):
The stock in a Pullback is PXD (Pioneer Natural Resources):
PXD did hit a trail stop on Monday, February 27, so that position is now closed. I do have MELI as the 6th man to pick up the slack. Good job PXD, the 100 Roll complete, and now time for a new participant soon.
Also SHW completed Day #3 this week – the 100 Roll is now complete there. I will leave in place for now with a tight stop.
I have removed ROP (Roper Industries) this week per my comment last week to give it one more week to perform. I have replaced it with DEO (Diageo PLC). One of the stocks, SHW (Sherwin Williams Co.) completed Day #2 of the 100 Roll on 2/24/2012 and looks good to carry that momentum into the coming week.
Called up MELI from the bench (6th man) to replace FDX as it hit a stop on the pullback on Friday (2/17). Both PXD and NKE had Calls sold against that expired – and will leave them in and do the same for March. ROP will be given one more week for the 100 Roll, otherwise it will be replaced. SHW did breach 100 on Friday but closed below – so close, battle stations!