Friday, January 18, 2008

ANAD - Update On Long Stock and Call Options

Those of you who got in on the ANAD trade are sitting on a little over 12% in 3 days and according to the model we should see a pullback over the next 3-5 days, so you have a couple of options here.

1. You can take the trade off the table at or near the open on Monday and pocket the 12%.

2. You can sell half the position on Monday and add the half back on after the pullback.

These same strategies hold true for the options as well.

The model indicates that we are just at the very start of a move in ANAD that should carry it to much higher prices.
The fact that the stock was able to follow the model and rally in the face of some serious downside pressures in the general market speaks volumes about the legitimacy of the model.
One of the advantages also to following a model like this is that you can see in real time when and if the pattern is starting to fall apart.

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