At OEX we use the nearest support/resistance areas as targets for taking profits. Just think of support and resistance as the short, medium and long term lows and highs.
We use point and figure charts to see these lines, calculate them for you each day, and provide a calculator on the website that allows you to re-calculate during the trading day.
We further provide Fib lines, and Average True Range lines, all to show other "stop" or "start" points, where to buy and sell.
With the recent changes we 've made in our alert we're working with subscribers to spend MORE time calculating intraday because of the massive shifts to the market, and the opportunity for day trade.
Our most astute and successful traders use the signals we provide, and the pricing indicators, as tools to utilize around pivot points, and support and resistance lines. Further, our most seasoned and successful traders "fall in love" with an option, watching just this option and the Dow, and becoming familiar with the swings of that option intraday.
Some traders in our Advanced Mentoring service are working with us now on using Fibonnaci extension levels. We use 138%,150%, 161.8% and 200% as extensions in comparison with the classic Fib retracement numbers we show in the alert. All of these multipliers help show more clear cut support and resistance lines. Extension values can be helpful.
Yesterday the market moved to a top at 12,736 and a bottom at 12,515. Traders were able to buy the April640P, which closed at 13.90 the day prior, as low as 12.20 (not quite near our best buy, but below prior day close), and sell to 16.40. We will continue to list this issue as a new hedge position. No new calls, yet, as we want to see if the one day euphoria was truly just that, and if Bernanke's sobering comments on our economy will reflect in market turns.
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