27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Research In Motion, Ltd. (RIMM) has been moving lower within a severe downtrend as of late, paving the way for several "sell the rip" opportunities. However, RIMM is currently coiling at resistance, which indicates a breakout is ahead…but which way?
Double Inside Day
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The daily chart shows RIMM has formed a Double Inside Day pattern, or ID2. As you may recall, a double inside day pattern forms when the range of the most recent day falls within the prior day's range AND the range from two days ago falls within the range from three sessions ago.
In essence, Thursday's range was inside Wednesday's range, and Wednesday's range was inside Tuesday's range.
What does this mean? Price is coiling up in anticipation of a breakout with directional conviction.
Of course, it seems the entire market is in a holding pattern until the NFP number comes out, which will likely decide direction and conviction.
Confluence of Resistance
The daily chart shows the ID2 pattern has formed right at 3-month resistance at about $8.40, which also coincides with the monthly R1 Floor pivot.
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The fact that this price pattern has formed at this fulcrum means a big move could be ahead, regardless of direction.
You see, an upside break through $8.40 leaves clear air above, while another rejection at this level paves the way for another test at the September lows. Either way, a substantial move could be seen.
Let the market decide direction, then execute your plan in the path of least resistance.
Let's see how this one plays out!
By the way, I'm hosting a free market outlook webinar after Tuesday's market. It's always fun to talk shop with others that are passionate about the market, so check it out.
It's free, but space is limited, so make sure you register to reserve your spot. Use this link: http://www.anymeeting.com/PIID=E157DF858249
Cheers!
Frank Ochoa
PivotBoss | Own the Market
Follow us on Twitter: http://twitter.com/PivotBoss
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.