So last week on Thursday I started buying some $5 August 24 calls, so 1 week of time and heaps of underlying volatility. started at 3c and ended up at 3.5 as the market maker didn't want to pay the 2c mid point... it happens a bit but thems the breaks.. yesterday we had a doji just under the orange pitchfork of upward fun... doji stars don't happen often on Heiken charts as they are an average so they usually mean something... I think it means up is about to start.
The bottom squiggle bit is the slow stochastic and is essentially the same outcome as a Williams R indicator which lots of the Quant traders use, same pattern just different number scale. My eldest son's name is William and as I don't like to play favourites I go with stochastic instead... It was looking like a turnaround in sentiment was either imminent or unlikely... I had already hedged bets from earlier in the month with some puts from $4.80 to $4.30 in September, mainly to match the physical shares position in case of the need to rotate through the trading parcel again, as in exercise put and rebuy stock at the new lower price.
Anyway, the way I look at TA is that an understanding of FA is fairly important. The big triggers likely to draw the price higher are the reports from AKE, PLS, IGO, MIN... the lithium producers that have options and warrants therefore have market size and liquidity that allows institutional investment. I bought a few IGOJOA series warrants as well as another punt that could also pick up some dividends and franking credits, but that's a story for another thread.. so thinking that a good result from PLS would drag the stock above $5.25 I bought the $5 calls.. if we see $5.25+ by Thursday (I think we will) then the $5 calls go 8-10x gain. If the market hates the result then the calls are a deduction and the $4.80's will allow an exit and repurchase.
No idea about the final price and the charts look like an uncertain direction hence the hedging of bets... given the volatility of PLS is insane there is often times when both put AND call positions go green in the same week... I think the final profit announcement will be positively received and should allow for a good solid base to set up the next leg of PLS... but... dunno? could go either way... fun stock!
(20min delay)