NWS - ready to go up?

[DTM]

Hi all

NWS has steadily been going down and seems to on or under the 200 day moving average. I think that it will bounce back up soon and am looking to buy ITM call options for next month. Best time to buy in my opinion would be around 3.00 to 3.30 pm today.

Any thoughts? Tech A? Of course if I'm wrong, it could drop faster than an opinion poll on Beazely. :D

[positivecashflow]

Of course if I'm wrong, it could drop faster than an opinion poll on Beazely.

So how are you hedging your position if you are wrong?

[DTM]

Can't hedge so would reverse order. If it drastically drops below the 200 ma, then I think it would keep on dropping.

:goodnight

[markrmau]

I was going to post today as well saying that nws would be a good buy at some time over next week, because:

1. wall st got the heebie jeebies because POO went up, because of a cold snap, and opec threatening to cut production.

However, winter is almost over, so a draw down on oil supplies isn't such a problem. Also opec countries never stick to their quotas anyway.

2. The US dollar has tanked because of the Koreans saying they are looking at buying other currencies. Not sure if that down trend will continue.

So after the typical market over-reaction, I will buy NWS - though I was thinking tomorrow would be best,

[DTM]

Hmmm... Decided to stay out. The puts bought today were 15,000 as opposed to 6,000 calls. Looks like the big boys are buying up big so I'll wait to see what happens.

Damn good day for option traders today. BHP and RIO did very well for me although looks like I've lost 3k on CBA. One consolation is that I sold my last lot of 10 contracts for RIO which returned 1000% from yesterdays purchase.

Gotta love this game.

[markrmau]

Actually I tried to buy on close but didn't get my order in on time even though I entered it about 4:04 (comsec seemed to take longer for me today).

Can I ask - is there any significance to the option expiry tomorrow - do some of the bigger players 'manipulate' the price so they will be better off tomorrow?

[DTM]

Actually I tried to buy on close but didn't get my order in on time even though I entered it about 4:04 (comsec seemed to take longer for me today).

Can I ask - is there any significance to the option expiry tomorrow - do some of the bigger players 'manipulate' the price so they will be better off tomorrow?

I'm not sure Mark but yesterday when RIO was falling, the number of calls outnumbered the number of Puts (3,000 to 1,000 I think) meaning that maybe people were loading up for today (the price rose by $1.07 at one stage). Seeing NWS's number of Puts outweighing the number of calls by a huge amount made me draw conclusions that they are getting ready to dump the shares. These are just my conclusions and thats why I stayed out. Of course I'm probably wrong but if I'm not sure of something, I would rather stay out. If it does rise tomorrow, there should be enough room to enter on the up trend.

:)

[SuperTed]

NWS will prob have more selloff on Mar 18th.

[SuperTed]

Our NWS charts is influenced by two key things, the US NWS price and the $au cross rate.

I see no relevance of technical information on the aus NWS chart. Many times over the last 9 months ive written put positions thinking "NWS surely has bottomed now technically and also being fundamentally very cheap and will rally upwards like a rocket."

The game being played with NWS is bigger then technicals and fundamentals at the moment.

[DTM]

Our NWS charts is influenced by two key things, the US NWS price and the $au cross rate.

I see no relevance of technical information on the aus NWS chart. Many times over the last 9 months ive written put positions thinking "NWS surely has bottomed now technically and also being fundamentally very cheap and will rally upwards like a rocket."

The game being played with NWS is bigger then technicals and fundamentals at the moment.

I think I agree with you Super Ted but its so hard to fathom. Today the price gapped up and looks to be on the uptrend. I'd rather wait this one out and wait for a trend to develop. "The trend is my friend" :)

[Warren Buffet II]

I am waiting for NWS to touch the $20 something market before buying. As I said I could be wrong but I am patience. :)

[Warren Buffet II]

Many times over the last 9 months ive written put positions thinking "NWS surely has bottomed now technically and also being fundamentally very cheap and will rally upwards like a rocket."


Hi SuperTed,

I am wondering why do you think NWS is technically and fundamentally very cheap?

Regards,

WBII

[SuperTed]

Before the "move" process that commenced with the announcement and subsequent sellof> NCP was trading in an upper half of the range of 12.40 - 13.30.

The falls and then false bottoms of NWS at prices of 24.00 , 23.00, 22.00 and then when i wrote my earlier reply near 21.00 gives an old NCP price (divide by 2) of 12.00 down to 10.50. (NCP had strong support many times at the 11.75 and 11.20 levels).

Add this to very good profit announcements by the company.

Pre all of this many brokers had a valuation of around $15+ (CSFB is the main one that springs to mind).

With tech charts i mainly look at macd/rsi/ stochastics these have all givin signals (albeit at difeerent false bottoms).

However If the aussie dollars gets weaker this may counter the US weakness in the share. I have written many 2100 puts, so i hope that it moves.

[DTM]

Before the "move" process that commenced with the announcement and subsequent sellof> NCP was trading in an upper half of the range of 12.40 - 13.30.

The falls and then false bottoms of NWS at prices of 24.00 , 23.00, 22.00 and then when i wrote my earlier reply near 21.00 gives an old NCP price (divide by 2) of 12.00 down to 10.50. (NCP had strong support many times at the 11.75 and 11.20 levels).

Add this to very good profit announcements by the company.

Pre all of this many brokers had a valuation of around $15+ (CSFB is the main one that springs to mind).

With tech charts i mainly look at macd/rsi/ stochastics these have all givin signals (albeit at difeerent false bottoms).

However If the aussie dollars gets weaker this may counter the US weakness in the share. I have written many 2100 puts, so i hope that it moves.

Hi Super Ted

I think the AUD is going to break the 80cents mark and keep heading up in the medium term. I'm not sure what that might do to NWS. I think that after todays moves, you'll be alright. Do you plan to buy back some of your risk?

[DTM]

PS I still think NWS is showing signs of price weakness.

[SuperTed]

Hi Super Ted

I think the AUD is going to break the 80cents mark and keep heading up in the medium term. I'm not sure what that might do to NWS. I think that after todays moves, you'll be alright. Do you plan to buy back some of your risk?


I already bought back my Mar 2200 puts ;-(

[Bingo]

Up to $22.02 in NY on Friday.

[Warren Buffet II]

Up to $22.02 in NY on Friday.

Hi Bingo,

Do you think there are much relation between the NWS price in AU and US and the AU dollar? What I mean is if the AU dollar goes up to 80c and NWS in US keeps the same price, is the NWS in AU going down?

WBII

[DTM]

I think NWS is heading for a retracement.

1.92 and looks like its heading south.

[SuperTed]

The interest rate rise on wednesday will not be good for NWS (the $au should gain strength against the $US)

Normally the NWS share price here = NWS (US) / $ exchange rate

so an increasing au dollar against a weak NWS in the US will not help it at all here.

ALSO on the 18th Mar NWS looses another 25% of its listing weight here. Index funds that havent already sold off may sell down some more.

[DTM]

Sold my put options I bought at the close of yesterday's session for 75% profit. My feeling is that it will go back up tomorrow, although hard to tell as my EOD data won't be in until tonight. Missed the opportunity when it went up as I had concerns about the amount of puts that had been bought. After buying yesterday's put options, I realised that one contract only controlled 500 shares instead of 1000.

Anyway, them are the breaks.

:drink:

[DTM]

NWS up 32 cents today and rising.

[DTM]

Although its moved up today, the share price still looks weak. Might look at buying put options today.

[DTM]

Bought the March 21.50 Put options @ .36 X 20 when NWS was 21.80. Could take two days to go down (hopefully).

[DTM]

Probably a lesson in not how to trade, bought 10 contracts of the 22 March Puts @ .48

[markrmau]

Might want to be careful here - todays growth figures make the second .25 interest rate increase (which has already been factored in by markets) LESS likely - that is why I said in MCR thread that todays announcement is good for miners - and today you see the AUD depreciating against USD.

So if US markets start growing strongly this month (which I suspect they will), and the AUD starts drops significantly (which is possible), you could be really rooted.

PS: this may all be crap - I don't feel I have sufficient knowledge of markets to trade derivitives.

[DTM]

Might want to be careful here - todays growth figures make the second .25 interest rate increase (which has already been factored in by markets) LESS likely - that is why I said in MCR thread that todays announcement is good for miners - and today you see the AUD depreciating against USD.

So if US markets start growing strongly this month (which I suspect they will), and the AUD starts drops significantly (which is possible), you could be really rooted.

PS: this may all be crap - I don't feel I have sufficient knowledge of markets to trade derivitives.

You know more than I do so I'll re-asses it tomorrow. I might just hold onto my BHP call options for a little while longer. Wish I had bought the RIO ones too!

Thanks for the advice.

[RichKid]

Yep, great point about the effect on the Aussie dollar, might be especially relevant to local gold stocks as the gold price rises.

[DTM]

Sold my $21.50 March put options at 33% loss although will keep my $22 March put options just because ex-dividend date is looming within seven days.

Just out of curiosity, does anyone know if there is a dividend or not? Looking up the information on commsec, it has March 9 as the dividend date but not dividend amount declared. :confused:

[Bingo]

Good rise in New York to 17.77 (up .46). This is equiv to A$22.72 at .782 conversion.

Bingo

[markrmau]

On paper, I might buy puts now, or would the volatility be too high to be worth it?

[DTM]

On paper, I might buy puts now, or would the volatility be too high to be worth it?

The upwards price movement looks too strong to buy any puts yet. When you see the price open and close at the same price as the previous days close (or lower), that may indicate that the upwards price movement is ready to retrace (profit taking). It will be especially interesting after the ex-dividend date.

Apologies also, I earlier posted that I had bought $22 March puts but forgot that it was actually $22 March calls so..., :eek: GO YOU GOOD THING. :D

Up over 100% :drink:

[markrmau]

Bloody hell, you must be making an absolute killing here. Well done!!!! (though I think I will paper trade for a while)

[DTM]

Bloody hell, you must be making an absolute killing here. Well done!!!! (though I think I will paper trade for a while)

Yes, last couple of months I've had plenty of cause to celebrate. :)

Paper trading will ensure you refine your system and lower the risk. If you need help with anything, happy to oblige.

[markrmau]

The upwards price movement looks too strong to buy any puts yet. When you see the price open and close at the same price as the previous days close (or lower),

I am a bit confused here. Why is the volatility pushing up the price of puts? I would expect that with NWS powering up, puts should become dirt cheap. When the open/close come closer together, the put price should become higher as the chances of retracement are higher.

What am I missing?

Thanks, Mark.

[DTM]

I am a bit confused here. Why is the volatility pushing up the price of puts? I would expect that with NWS powering up, puts should become dirt cheap. When the open/close come closer together, the put price should become higher as the chances of retracement are higher.

What am I missing?

Thanks, Mark.

Sorry, what I mean is that if you are looking to buy puts, wait until the current price surge slows down. I wouldn't recommend buying any puts at this stage unless you went for atm puts anticipating a big fall after the ex-div day. Yes, the puts would be cheaper now although if MM's have factored in a fall after ex-div, you will find puts more expensive.

Hope this helps.

PS an example of when to buy puts is today for RIN. Check out how its been surging for the last few days and looks like it's peaked. Buying puts on it now would be my preferred option as opposed to buying them when the price is still surging up. The other alternative of course is that you buy the puts at the end of the day like today for NWS, although I think you should wait a couple of days to make sure the price isn't still shooting up.

[DTM]

Oops, whilst posting, the price has dropped 15 cents so I sold my call options. Missed the opportunity to sell it at a better price so over 90% return will have to do. I think the price has shot up too much and may follow a natural retracement. Because of the strength of the movement, I wouldn't buy puts as this might only be a short retracement. I will look to go back in after the retracement (if there is one).

[DTM]

The price action was positive so bought back in at .35 for the $23 March calls.

[positivecashflow]

You are buying calls within the last 30 days till expiration? Time decay is your worst enemy in this period I would have thought...

[DTM]

You are buying calls within the last 30 days till expiration? Time decay is your worst enemy in this period I would have thought...

Yes, but volatility is extremely high. I also prefer it within this period as time value becomes less of a factor/cost.

[JetDollars]

What's the reason NWS go up yesterday?

[markrmau]

Because everyone was expecting it to fall because of the index removal.