Midday Update

It really feels like a Saturday.  Fridays have a feel.  Mondays have a feel.  Thursday, not as much.  Anyway.

I’m looking at my now out-of-the money $NWL position and am seriously considering liquidation.  The chart doesn’t look horrible, but it’s in a place that makes me uncomfortable.  This is a small position, so that makes me hesitate a moment before culling it completely.  These will expire worthless below 18, two weeks from Friday.  Time decay has also eaten away significantly from my current cost-basis of 0.85.  I’d be salvaging a few bucks with the sale, but even if they expire worthless, it’s still less than my original risk profile.

$MSFT (July 31 Call) is another position that may be ejected before the day is through.

One thing that sours me on a stock is when price closes below the lower Bollinger Band.  I realize that this goes against conventional wisdom, seeing that a close outside of the BB should be viewed as ‘abnormal’ and to expect mean reversion soon.  Over time I have come to find that often the opposite is true, and price tends to continue in the direction of the band-break.  This is especially true when the bands start to expand in width along with the drop in price.  The chart below of $MSFT is a good example of what I’m talking about.

MSFT 2012-04-05

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