DM (TRNE) made some very strong moves up before the ticker change, since the change it has been beaten up pretty bad. I expect the double bottom to lead to previous highs and beyond. I love this as a long term play, they are one of the top dogs in the 3D printing industry!
My concern is this is a descending triangle and not a double bottom, how can you distinguish between the two currently?
Spotshooter1983
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I like this chart but here's how I consider a heuristic chart narrative: @lanny22,
charts are narrative interpretations of future price movements. I wouldn't expect an answer as to how to divine the tea leaves. Yesterday Bill Miller was on CNBC and had a list of stocks to own for 2021. DM was one of them. Therefore there is a famous investor who likes it added to the mix and it becomes a part of the chart history. Heuristics - we love simple solutions to complex problems abd charts fill that thought niche quite nicely.
Thematically, I am treating this as a slow grower Bill Miller style. Therefore I sold a put vertical looking to get as close as I could to a 50 delta 20 delta spread.
A key for me - I sell put verts for slower growers and buy call verts for faster movers. I generally set up the trade and start with 2% of invested capital.
In this case I looked at it and felt this is when I consider the narratives and how they feel (Tao to know without knowing but yeah if I call it Tao it isn't) that 1% of capital was the place to start. I am 1% invested in a put vertical credit spread in the 45 day range. I always start with 2% of capital or less but never more to stay in the game. These likely expire worthless but I get out either way with a 50% loss or with a few weeks to the expitation and a profit. I will add to it if it rises and stop it out at a 50% loss. If I am correct about 60% of the time I will have 80% gains when right 60% of the time and a 50% loss 40% of the time on 2% of capital. All of this while waiting for the next real event - Volmageddon Feb 2018 or Covid March 2021. the rest of the time this is just tiddily winks while waiting for the next real money events. Thats how I did this so let's see what happens. that's all I've got. All the best for 2021 investing.
lanny22
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@Spotshooter1983, Amazing reply. I am still getting used to options trading and very evidently don't have the knowledge that you do about different types of strategies and how to use the greeks, do you have any material I can use to better understand your strategy in mention above?
Spotshooter1983
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@lanny22, sent you a private message with a few recommendations
Tony Zhang OptionsPlay.com
Mike Khouw's book "the Options Edge."
Michael Sincere's book, "Understanding Options."
Look at the OptionsPlay videos posted on Youtube.
Get a trial subscription to OptionsPlay.com and learn to use the tools to structure trades. Also some excellent trade ideas. Zhang showed the FCX trade and the forward roll on CNBC. He closed it out for 845% profit. I am still in the trade with an additional roll forward.