Friday, January 6, 2012

Holding BAC Puts

So far I have about a 5% 1-day profit on BAC, but this daily chart looks ominous.

The 2-day candlestick formation is about as perfect an example as you will ever see of a bearish Harami reversal pattern, of what the Japanese call "Mother with baby', in western culture it's called an inside day, whatever you want to call it, it's a bearish formation so being the Puts have a March expiration, I decided to hold them. As a reminder, in the last week, I've had 2 other BAC trades using January Puts, the first gained almost 30% in less then a day and the second 57% in a day.

The fundamental situation with BAC is pretty bleak as well.

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