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MIR is one I follow too, but it had been "pushed to the back of the stack"
recently. Thanks for bringing it up again. I like to trade the hourly
charts, with a wary eye to what's happening on the daily (and weekly)... the
H&S is sort of a classic, no? As well, the stochastics are bullish on all
three charts (H,D,W) and the gap open today (albeit paltry volume) looks
like someone else is watching too. One study that doesn't confirm [yet] is
OBV... accumulation is yet to get started on this market. I also prefer to
initiate a trade with the market at or near its highs in all time frames...
this one is near lows in nearly all timeframes (hourly is starting to look a
little respectable though). There were very few big-block buys (>10K
shares) following the gap open this morning.
One of the "visual" cues I look for is a narrow confluence of moving
averages in many timeframes, with the faster averages all above the
slower and rising (or below and falling), with a breakout well beyond all of
them at once. The attached hourly chart shows MIR is gaining qualification
in this respect (the big bullets are corresponding averages from the daily
chart).
I would use the Nov15 calls to trade this. They have good open interest
(3685), and there are five weeks to go on this series. With the stock at
14.375, the asking price is 7/8, which has held up during the low-volume
sell off trying to fill the gap (current fair value is 3/4). This would be
one place I would rather use options versus the underlying... the current
price is at the "sweet spot" just below the strike. I think if I were to go
long here, I would have to kill the trade if MIR closed (hourly) back below
13.75, which at this point is the daily 50/hourly 200 bar average. At this
price, MIRKC would have a theoretical value of about .5 (after 7 days)...
this would be my stop on the trade. On the other hand, if MIR runs to 15.25
(the line on your chart), the MIRKC value would come to 1.25, and I would
close half the trade there, and stop the other half at a buck.
Good Trading...
Dick Crotinger
----- Original Message -----
From: Dtrader <dan@xxxxxxxxxxxxxxxxx>
To: Real Traders List <realtraders@xxxxxxxxxxxx>
Sent: Wednesday, October 13, 1999 7:27 AM
Subject: H&S ??
> attachment/
>
> H&S.gif
>
>
>
>
Attachment Converted: "c:\eudora\attach\MIR60.gif"
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