Monday April 20, 2015 – Weekly Market Update

Last week I mentioned how GE made a big move.
An uncharacteristic move you might say.

Two weeks ago, GE was up over 14% for the week.

I also suggested you should not chase the price
and wait for it to pullback if you were inclined
to pick up shares of GE.

Since peaking at $28.68 two weeks ago, GE is now
trading just over $27.

The question now is where would be a good place to
initiate a buy on the stock?

There are a couple of areas I would be looking at
as decent opportunity.

The $26.70 area should be an area of support and
and at this point, it is not far from that price.

If that does not hold as support, it could drop to
around $26.

By looking at support levels based on the weekly price
bar, you can get a feel for where support should be.

And then look to initiate your purchases when you
see it reverse.

Another stock I mentioned in a weekly issue
was AKS. I brought it up on February 2nd and
mentioned how it appeared to be bottoming.

I mentioned that you could enter with a tight stop
and if your stop is hit, then take a loss and look to

If you did in fact get back in the stock, you could
have entered around $4 per share. From there, AKS
ran up to a high of $5.29 and currently trades for

You could have picked up about 25% on the second
trade, which would have more than covered the
small loss on the first purchase.

Here is another way to trade a position that looks
to be forming a bottom.

What I like to do is covered calls on stocks like this.

The nice thing about AKS is that is has weekly options.

Stocks that are bottoming tend to move back and forth
as they go through the process.

On weakness you can buy the stock and on a spike up,
sell call options.

Even if you are assigned, you can always buy the stock
back and do it again.

Right now, AKS is trading for $4.95. The $5 call
that expires this Friday can be sold for about 13 cents.

If the calls are assigned this Friday, the return will be
3.6% for a week.

Of course if your commissions are high, you most
likely cannot do this trade. But with my broker, I can.

Especially considering that I do not pay a commission
on the sale of the stock when the calls are assigned.

On fact I did the same type of trade on Sprint (S).

I bought Sprint at $4.99 and sold the $5 call that expired
last Friday for 12 cents.

Sprint closed Friday at $5.11 and my calls where assigned.
Now that maynot seem like a lot of profit, but I look at
as if it is a weekly dividend of 12 cents per share.

And now I have sold the stock and can look for an
opportunity to do it again.

Why did I do it on S?

At the end of February I noticed that the President bought
just over 5 million shares of stock. And he paid $4.92
for them.

It seemed to me if the President was investing over $25 million
into his companies shares, that it was a good idea to
trade along side him.

You may want to follow this activity and see how it does.

This entry was posted in Weekly Market Updates. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *