Forex Investment

Former IBD 100 stock Lam Research () was delivered a one-two punch in Wednesday’s session. While the broader averages closed higher, many semiconductor stocks, particularly equipment manufacturers were hit as a somewhat disappointing earnings report from heavyweight Applied Materials () was ill-received by investors. The downside pin action in the stock made its impact felt on related issues such as LRCX and even current growth leader Varian Semiconductor (); which was also part of a Credit Suisse conference.

Lam Research also had a second-tier brokerage, Merriman Curhan cut the stock to “Neutral” from “Buy”. Combined, today’s one-two punch sent LRCX shares gapping lower and closing down -1.51 at 51.68. With that said, though, and while the headlines certainly hint at a grizzly verdict, is LRCX a lamb ready for slaughter? Or, might the stock be appreciated with a more bullish gaze courtesy of one or more optionable alternatives? In the following, I’ll offer up a strategy or two, which upon doing the homework, investors can decide for themselves if its truly a good time to “Buy, Buy, Buy!” or some other well-structured option.

Buying hard pullbacks isn’t a style many investors feel comfortable with. However, a couple technical levels have been tested with Wednesday’s drop in LRCX. Further, when combined with other tools of the trade and maybe a bit of anticipation, traders might reach a bullish conclusion like the one offered. So, what evidence do we have at this point? First, LRCX tested and held above its 50-Day exponential moving average and 38% Fibonacci retracement from its 2007 lows. Second, while volume ran well-above average and might suggest distribution, the stock actually closed in the upper part of its trading range and represents a decision bar known as a Doji in candlestick lingo.

If today’s pivot low in LRCX were to hold up, traders might want to look at the weekly view for confirmation. The reason being, the price action could easily mark a handle approximately 9% in depth and well-suited to the bullish price structure on that time frame. For traders this also means entering closer to determined supports, which affords the ability to exit with less stock risk, barring an outsized contra gap, than would be possible with the more traditional breakout entry. Further, in conjunction with a well-suited limited risk optionable strategy, our chances for success are increased over the long run.

Looking at the options board in the second half of trade, the implied-to-statistical relationships suggested that spreading versus an outright purchase for any bullish strategies held a slight edge. With that being the case, two bullish position types that could also appreciate a theoretical edge are the Bull Vertical and the bullish Long Butterfly. Shown above are the risk graphs of the June 50 / 55 Bull Call and the June Fly, which uses the 60 Strike to maintain a limited risk structure.

The graph above may look a bit odd to some traders and that’s because we’re focused solely on what the risk versus reward prospects of each are, ten days forward. With the initial risk involving less than 4% in the stock based on money management which uses the Doji low or perhaps a stop 1% below the 50-Day simple moving average, any trades would likely be tied to a swing or shorter-term positioning. That means a ten day assessment is a better guide than looking at the risk and reward on an expiration basis.

In checking out the characteristics of each, we can quickly get a feel for the fact that this far out, that the Butterfly doesn’t really serve the trader intent on trading in this particular style too well. It affords a bit of risk reduction if we look at Points 1 and 2, which are the fore mentioned money stops. However, the slightly stronger defense pales to the ability to actually profit and / or adjust into a stronger and longer-minded position, should some Lam be served up like the bull in the coming days ahead.

Visit the http://www.investors.com/FinancialDictionary/List.asp?type=s&key=11 for an extensive list of option-related terms.

The observations provided are not investment advice or a recommendation, the suitability of which is considered the responsibility of the trader.

Copyright 2007 through Optionetics, Inc. All rights reserved. http://www.optionetics.com?source=ibdweb is a Trademark or a registered Trademark of Optionetics, Inc., in the United States and/or in other countries.

Former IBD 100 stock Lam Research () was delivered a one-two punch in Wednesday’s session. While the broader averages closed higher, many semiconductor stocks, particularly equipment manufacturers were hit as a somewhat disappointing earnings report from heavyweight Applied Materials () was ill-received by investors. The downside pin action in the stock made its impact felt on related issues such as LRCX and even current growth leader Varian Semiconductor (); which was also part of a Credit Suisse conference.

Lam Research also had a second-tier brokerage, Merriman Curhan cut the stock to “Neutral” from “Buy”. Combined, today’s one-two punch sent LRCX shares gapping lower and closing down -1.51 at 51.68. With that said, though, and while the headlines certainly hint at a grizzly verdict, is LRCX a lamb ready for slaughter? Or, might the stock be appreciated with a more bullish gaze courtesy of one or more optionable alternatives? In the following, I’ll offer up a strategy or two, which upon doing the homework, investors can decide for themselves if its truly a good time to “Buy, Buy, Buy!” or some other well-structured option.

Buying hard pullbacks isn’t a style many investors feel comfortable with. However, a couple technical levels have been tested with Wednesday’s drop in LRCX. Further, when combined with other tools of the trade and maybe a bit of anticipation, traders might reach a bullish conclusion like the one offered. So, what evidence do we have at this point? First, LRCX tested and held above its 50-Day exponential moving average and 38% Fibonacci retracement from its 2007 lows. Second, while volume ran well-above average and might suggest distribution, the stock actually closed in the upper part of its trading range and represents a decision bar known as a Doji in candlestick lingo.

If today’s pivot low in LRCX were to hold up, traders might want to look at the weekly view for confirmation. The reason being, the price action could easily mark a handle approximately 9% in depth and well-suited to the bullish price structure on that time frame. For traders this also means entering closer to determined supports, which affords the ability to exit with less stock risk, barring an outsized contra gap, than would be possible with the more traditional breakout entry. Further, in conjunction with a well-suited limited risk optionable strategy, our chances for success are increased over the long run.

Looking at the options board in the second half of trade, the implied-to-statistical relationships suggested that spreading versus an outright purchase for any bullish strategies held a slight edge. With that being the case, two bullish position types that could also appreciate a theoretical edge are the Bull Vertical and the bullish Long Butterfly. Shown above are the risk graphs of the June 50 / 55 Bull Call and the June Fly, which uses the 60 Strike to maintain a limited risk structure.

The graph above may look a bit odd to some traders and that’s because we’re focused solely on what the risk versus reward prospects of each are, ten days forward. With the initial risk involving less than 4% in the stock based on money management which uses the Doji low or perhaps a stop 1% below the 50-Day simple moving average, any trades would likely be tied to a swing or shorter-term positioning. That means a ten day assessment is a better guide than looking at the risk and reward on an expiration basis.

In checking out the characteristics of each, we can quickly get a feel for the fact that this far out, that the Butterfly doesn’t really serve the trader intent on trading in this particular style too well. It affords a bit of risk reduction if we look at Points 1 and 2, which are the fore mentioned money stops. However, the slightly stronger defense pales to the ability to actually profit and / or adjust into a stronger and longer-minded position, should some Lam be served up like the bull in the coming days ahead.

Visit the http://www.investors.com/FinancialDictionary/List.asp?type=s&key=11 for an extensive list of option-related terms.

The observations provided are not investment advice or a recommendation, the suitability of which is considered the responsibility of the trader.

Copyright 2007 through Optionetics, Inc. All rights reserved. http://www.optionetics.com?source=ibdweb is a Trademark or a registered Trademark of Optionetics, Inc., in the United States and/or in other countries.

Former IBD 100 stock Lam Research () was delivered a one-two punch in Wednesday’s session. While the broader averages closed higher, many semiconductor stocks, particularly equipment manufacturers were hit as a somewhat disappointing earnings report from heavyweight Applied Materials () was ill-received by investors. The downside pin action in the stock made its impact felt on related issues such as LRCX and even current growth leader Varian Semiconductor (); which was also part of a Credit Suisse conference.

Lam Research also had a second-tier brokerage, Merriman Curhan cut the stock to “Neutral” from “Buy”. Combined, today’s one-two punch sent LRCX shares gapping lower and closing down -1.51 at 51.68. With that said, though, and while the headlines certainly hint at a grizzly verdict, is LRCX a lamb ready for slaughter? Or, might the stock be appreciated with a more bullish gaze courtesy of one or more optionable alternatives? In the following, I’ll offer up a strategy or two, which upon doing the homework, investors can decide for themselves if its truly a good time to “Buy, Buy, Buy!” or some other well-structured option.

Buying hard pullbacks isn’t a style many investors feel comfortable with. However, a couple technical levels have been tested with Wednesday’s drop in LRCX. Further, when combined with other tools of the trade and maybe a bit of anticipation, traders might reach a bullish conclusion like the one offered. So, what evidence do we have at this point? First, LRCX tested and held above its 50-Day exponential moving average and 38% Fibonacci retracement from its 2007 lows. Second, while volume ran well-above average and might suggest distribution, the stock actually closed in the upper part of its trading range and represents a decision bar known as a Doji in candlestick lingo.

If today’s pivot low in LRCX were to hold up, traders might want to look at the weekly view for confirmation. The reason being, the price action could easily mark a handle approximately 9% in depth and well-suited to the bullish price structure on that time frame. For traders this also means entering closer to determined supports, which affords the ability to exit with less stock risk, barring an outsized contra gap, than would be possible with the more traditional breakout entry. Further, in conjunction with a well-suited limited risk optionable strategy, our chances for success are increased over the long run.

Looking at the options board in the second half of trade, the implied-to-statistical relationships suggested that spreading versus an outright purchase for any bullish strategies held a slight edge. With that being the case, two bullish position types that could also appreciate a theoretical edge are the Bull Vertical and the bullish Long Butterfly. Shown above are the risk graphs of the June 50 / 55 Bull Call and the June Fly, which uses the 60 Strike to maintain a limited risk structure.

The graph above may look a bit odd to some traders and that’s because we’re focused solely on what the risk versus reward prospects of each are, ten days forward. With the initial risk involving less than 4% in the stock based on money management which uses the Doji low or perhaps a stop 1% below the 50-Day simple moving average, any trades would likely be tied to a swing or shorter-term positioning. That means a ten day assessment is a better guide than looking at the risk and reward on an expiration basis.

In checking out the characteristics of each, we can quickly get a feel for the fact that this far out, that the Butterfly doesn’t really serve the trader intent on trading in this particular style too well. It affords a bit of risk reduction if we look at Points 1 and 2, which are the fore mentioned money stops. However, the slightly stronger defense pales to the ability to actually profit and / or adjust into a stronger and longer-minded position, should some Lam be served up like the bull in the coming days ahead.

Visit the http://www.investors.com/FinancialDictionary/List.asp?type=s&key=11 for an extensive list of option-related terms.

The observations provided are not investment advice or a recommendation, the suitability of which is considered the responsibility of the trader.

Copyright 2007 through Optionetics, Inc. All rights reserved. http://www.optionetics.com?source=ibdweb is a Trademark or a registered Trademark of Optionetics, Inc., in the United States and/or in other countries.

Former IBD 100 stock Lam Research () was delivered a one-two punch in Wednesday’s session. While the broader averages closed higher, many semiconductor stocks, particularly equipment manufacturers were hit as a somewhat disappointing earnings report from heavyweight Applied Materials () was ill-received by investors. The downside pin action in the stock made its impact felt on related issues such as LRCX and even current growth leader Varian Semiconductor (); which was also part of a Credit Suisse conference.

Lam Research also had a second-tier brokerage, Merriman Curhan cut the stock to “Neutral” from “Buy”. Combined, today’s one-two punch sent LRCX shares gapping lower and closing down -1.51 at 51.68. With that said, though, and while the headlines certainly hint at a grizzly verdict, is LRCX a lamb ready for slaughter? Or, might the stock be appreciated with a more bullish gaze courtesy of one or more optionable alternatives? In the following, I’ll offer up a strategy or two, which upon doing the homework, investors can decide for themselves if its truly a good time to “Buy, Buy, Buy!” or some other well-structured option.

Buying hard pullbacks isn’t a style many investors feel comfortable with. However, a couple technical levels have been tested with Wednesday’s drop in LRCX. Further, when combined with other tools of the trade and maybe a bit of anticipation, traders might reach a bullish conclusion like the one offered. So, what evidence do we have at this point? First, LRCX tested and held above its 50-Day exponential moving average and 38% Fibonacci retracement from its 2007 lows. Second, while volume ran well-above average and might suggest distribution, the stock actually closed in the upper part of its trading range and represents a decision bar known as a Doji in candlestick lingo.

If today’s pivot low in LRCX were to hold up, traders might want to look at the weekly view for confirmation. The reason being, the price action could easily mark a handle approximately 9% in depth and well-suited to the bullish price structure on that time frame. For traders this also means entering closer to determined supports, which affords the ability to exit with less stock risk, barring an outsized contra gap, than would be possible with the more traditional breakout entry. Further, in conjunction with a well-suited limited risk optionable strategy, our chances for success are increased over the long run.

Looking at the options board in the second half of trade, the implied-to-statistical relationships suggested that spreading versus an outright purchase for any bullish strategies held a slight edge. With that being the case, two bullish position types that could also appreciate a theoretical edge are the Bull Vertical and the bullish Long Butterfly. Shown above are the risk graphs of the June 50 / 55 Bull Call and the June Fly, which uses the 60 Strike to maintain a limited risk structure.

The graph above may look a bit odd to some traders and that’s because we’re focused solely on what the risk versus reward prospects of each are, ten days forward. With the initial risk involving less than 4% in the stock based on money management which uses the Doji low or perhaps a stop 1% below the 50-Day simple moving average, any trades would likely be tied to a swing or shorter-term positioning. That means a ten day assessment is a better guide than looking at the risk and reward on an expiration basis.

In checking out the characteristics of each, we can quickly get a feel for the fact that this far out, that the Butterfly doesn’t really serve the trader intent on trading in this particular style too well. It affords a bit of risk reduction if we look at Points 1 and 2, which are the fore mentioned money stops. However, the slightly stronger defense pales to the ability to actually profit and / or adjust into a stronger and longer-minded position, should some Lam be served up like the bull in the coming days ahead.

Visit the http://www.investors.com/FinancialDictionary/List.asp?type=s&key=11 for an extensive list of option-related terms.

The observations provided are not investment advice or a recommendation, the suitability of which is considered the responsibility of the trader.

Copyright 2007 through Optionetics, Inc. All rights reserved. http://www.optionetics.com?source=ibdweb is a Trademark or a registered Trademark of Optionetics, Inc., in the United States and/or in other countries.