Technical Analysis. |
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Highlight Investments Group |
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May 1st, 2002
Our analysis of volume over the past week has resulted in the following trades using QQQQ Options by our conservative long-term trader.
| Security | Return |
| Call 1 (QQQQ June) | -46% |
| Call 2 (QQQQ June) | +132% |
Even though not all the above trades were profitable, we still came out on top with a profit of 86%
Why deal in Options?
Options offer the potential of a high short-term
return. Compared to futures, options are less risky, and don't require as much
capital to trade. Those who trade options should reduce the risk by only trading
options that are at least two or three months away from expiration, or as
liquidity permits.
Why buy Call Options?
MarketVolume has recently seen volume signals that
indicate we are in a support corridor, and since we bought June QQQQ options, we
don't need to worry as much about short-term fluctuations as with futures, or a
May call option.
We would like to make it clear to our members what the motivation was to make the above trades; therefore, we have created what we call a 'Table of Motivation', in which we try to make it clear the motivation that was behind each of the above trades.
| Trade | Motivation | MV's Commentary on Members Home Page during the trade |
| B1 Call |
1. There was a large volume spike
as the index was declining 2. There were several concurrent volume spikes as the index was declining prior to making this trade. |
1. The market is still in it's support corridor. |
| S1 Call |
1. The stop-loss order that was
placed for QQQQ was executed as the index declined further. 2. If on the way down there is a very large volume signal, buy QQQQ options at a lower price. |
1. The market needs to see a large increase in the 1-day VMA before moving up. |
| B2 Call | 1. Two very large spikes in the VMA indicated this was an excellent point to purchase QQQQ options. |
1. The market could make a quick
move upwards due to a 'shot squeeze' 2. The market is still in a support corridor. |
| S2 Call | 1. As the index rose, there were 2 moderately large spikes in the VMA, which indicated the upward trend of the index will likely stop. |
1. The market could jump up in
the short-term. 2. There is not enough volume to justify that the market has hit it's actual support level, and therefore could continue moving down. |
To see any of our past best trades, simply select from the list below.
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QQQQ Trading System QQQQ, SPY and DIA trading signals for conservative mid- and long-7 term traders ...
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