Sunday, November 20, 2011

Mo' MA

Mastercard (MA) is shaping up to be a very nice example of a rare bullish trade in this messy market. So here's the pretty picture:

Previously, we were looking at a seasonal projection down to the 345 level, a broken resistance. Instead we got a bounce at 355, a more recent broken resistance, and some supporting action there into the November expiry. I'm not a big fan of Elliot Waves but the fact we did not test back down to 345 coupled with the seasonal projection to new 52 week highs just looks very much like an Elliot Wave, so I've labeled the "waves." Of course, we would need to see a close above 3 soon to confirm 3 and 4.

Currently, I am trading this using my Nearly Naked Diagonal (NND) methodology: Short  NovWk4 355 Puts and long Jan 290 Puts. I prefer this method because it makes a weekly process of taking profits. Also, I am long Dec 385 Calls, a paid for remnant of a similar bearish NND for which I closed the short side into the November expiry. This Call I am keeping as a lottery ticket on the off-chance that MA makes a bigger move to the upside than I am anticipating.

Keep on Rolling!

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