On Wednesday I had an appointment that I had to get to. As I waited, I grabbed my phone and pulled up Think or Swim to check out what was going on with Microsoft. At the time, it looked like it was barely green. By the time I left, it was running red. By the end of the day, it was very green.
Based on the pile of lines I have all over my screen that includes multiple strong support points, the indicators I use, the trend direction and the relentlessness of the candles clearly not wanting to stay down, it looked like Microsoft was about to start climbing, possibly gapping up big.
My initial thought was that it would probably take a few days for it to climb, but that it could start doing it, to some degree, on Thursday. I checked the prices of some of the options. My plan was to buy the $140 call that expired on Friday. That left basically no time to really climb but being Microsoft, it could have done it enough to make a few bucks on.
I stopped thinking about it and went home. The next day, I woke up and saw Microsoft had hit a new all-time high. That call contract had gone from $25 to hitting a max of $250.
This is yet another example of why I need to start listening to myself when I spot these things. This would have been an incredible gain, but one thing I have learned is that these things will happen again. You just have to make sure to act on them when you have enough signs pointing to a coming move (like the many, many signs smacking me in the brain).
Funny thing is that today we got a nice red day on Microsoft. This followed a gap up that turned into an inverted hammer on Thursday. I probably should have seen that one coming also.
Also, weirdly my long-distance Disney calls went up on Thursday when Disney dumped hard all day. So for whatever reason, calls on Disney were worth more on a day when Disney lost money. That’s not how calls are supposed to work but whatever, I’ll take it.
That said, Disney will probably move up next week. It is sitting on a support area and it created a small (red) hammer. If it drops further, it looks like it won’t do it more than a couple of bucks before finally reversing. This isn’t an attempt to advise you, just my opinion on what I think is going to happen based on a brief look at the chart. Below is the chart pulled on Stockcharts.com so you can see what I am looking at. Make up your own mind.