yonglonglai.com

I’ve been lazy lately to look for trades, so when I received a recommendation this morning I couldn’t resist taking the trade. SGB has 5 points of support over the past 12 months and its obviously in an uptrend. There is strong support at the $34 level and today was an up-day forming a higher low created on 14th March 2007 (ie. short term bullish market - zigzag formation)

Recommendation Comments ( Kinetic Securities)
“Looking at the charts, SGB is giving all the signs that it is about to move into it’s next bullish phase. SGB has found support at it’s 50% Fibonacci level (39.90), it has been trending nicely since it’s start back in late August last year and has held the 50 EMA. With today’s strong bullish candle we feel that an opportunity has presented itself to enter the market.”

This is pretty much the level of technical and fundamental analysis I do when I open a trade (its not too exciting and it takes me about 5mins to read it and do some technical analysis)

The Trade
Sell April $34.0 Puts @ $0.245
Buy April $33.5 Puts @ $0.13

Expiry = 26/04/2007
Share/Contract = 1000
Max Profit = 0.115 (0.245-0.13)
Max Risk = 0.385 [(34.0-33.5) - (0.245-0.13)]
Return on Risk = 29.87%
Breakeven = $33.885

I opened 10 contracts:
Reward for trade (excluding fees) $1,150.0
Reward for trade (including fees) $940.6