Monday, August 25, 2014

United States Steel Corp. (X), how I select a stock to trade

For those of you reading me for a while, you know I often use two key patterns ;
The ABC Pattern, and the GVN condition (Gap, Volume, and high impact News)
I look at hundreds of charts per week, searching for "long term wide patterns"
The longer the pattern, the stronger the move.
A long base channel pattern often faces a very strong break out
A very long up or down trend will often face a very hard reversal
Those "break outs", after long term patterns, are often part of a bigger pattern.
Back to US Steel (X), why do I have it on my key watch list ?
That recent break out tells me its part of a bigger move to come (not because some analysts says so), price/volume action confirms.
I now need to see X remain in a tight channel pattern and reduce volatility
Basically I am trying to buy cheaper options
I will buy a few mid & short term puts, as well as long term calls
Why am I buying puts if I am so sure that X will continue to rise higher?
Hedging ... I like to sleep well at night

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