I Love The Straddle

     

     Boy oh boy do I enjoy this strategy. It's a pretty simple concept to learn and

to understand. I have been using it in the game I'm playing and it has worked fairly well for me. I have been using it when I know there is going to be big news announced for a stock. Particularly earnings. Let me try and explain the straddle and the pros and cons with it.

(on the left we can see Tyga and Kylie perfecting the straddle)

Growing Asset Bubble

     In a change of pace from my past little articles, I want to go over this possibility of a future asset bubble: Student Loans.

     Let me set the scene. I was sitting in lecture for one of my economics classes at school. We have been talking about the history of the united states regarding recessions and depressions. As of late, we have been diving into the recessions since the early 1980's. In this particular instance we were talking about the asset bubbles that have popped and sent the economy down the tube. The oil price shock in 1990, the dot com/tech bubble in 2001, and then the housing bubble in 2007-08. [For those of you that don't know what an asset bubble is...it's the irrational increase in the price of an asset] Back in 2001 with the dot com bubble, the internet was finally becoming much more accessible to the public and companies were able to create websites. 

Options!

     I am in an investment club in school. Through investopedia, we use a simulator and have $100,000 of fake, no risk dollars to play with. It provides a great, great learning opportunity. I can kind of play with the things I have been writing about to see if I'm right, wrong, or on the right track with no risk of losing any real dollars. What I am thinking about now is learning about options. I firmly believe that the easiest and best way to learn how to trade options is to trade options. If I were to just go on my brokerage account and buy some contracts I'm 95% certain I would screw it up. With a simulator you can see what works, what doesn't, and HOW they work. 

Sowing the Seeds of Success

American Vanguard Corporation     [AVD]

I was flipping through some articles this past weekend and came across one written about American Vanguard and I thought I'd look into it. The first thing I noticed about the chart was the hammer,

hanging man?
[daily]

hammer 
[weekly]

obviously. But this time there will be more to it than just the candlestick pattern. Before I get into that some more...the candlestick pattern. Last trading week the company ended the week +5.61%. The week before that was the hammer pattern I have come to love so very, very much. Based on that there is still some room for growth. I'm not as bullish in the short run on this one as other based on the daily chart. It isn't very strong, but one could argue that a hanging man pattern happened and this next week will be in the red. This wouldn't be a weekly stock pick of mine, more of a long term buy-and-hold mentality. With this flawless transition, let's move into why I like this bad boy over the long term. 

EBAY To Start Trending Up

eBay Inc.  [EBAY]

     At this point you've noticed that I like the hammer. Definitely one of my favorite trend reversal indicators. If you look back through charts it's hard to find one that does't work out. I think I may have stumbled across one looking through some random stocks this morning. Before eBay released their earnings on October 19th I was looking into them and liked what their company was doing. Trying to revamp their buying and selling platform and bringing them back near the spotlight. I bring up their October 19th 3Q release because they closed at $32.52 on the 19th and then opened up $29.35 on the 20th. Pretty rough report. So it's been almost a month and things have cooled off a little bit. Since then, the stock has performed -2.96% which is in no way good, but nothing like the initial drop after 3Q. Anyway, I decided to take a look and this is what I saw on the weekly chart...

Chipotle With The Hammer(s)!

Chipotle  [CMG]



     I am in love with Chipotle right now. Talking about the stock, not the food. I love it, but am a cheap-o when it comes to buying fast, or fast-ish, food. I wrote about it earlier but I just can't get over how SOLID the chart is looking for the next 1, 2, maybe even 3 weeks. It's hard to say and obviously I want to point out that this isn't a sure fire thing. I can't tell the future. The markets are unpredictable and people act irrationally sometimes so in reality, ANYTHING can happen.
     

Books on Books on Dividends

Barnes and Noble  [BKS]

     Here's a store that a lot of people probably haven't been inside in years. I only go there because that's where I have to go to get my textbooks. However, I have been keeping up with this company for the last year or so and am just now writing about it because I actually forgot about it for a while. I remembered it today during class, took a look and it was up 6%! Fancy that! As per usual, I'm going to go through some of the reasons why I like this particular stock.