The Morrisian Indicator

A very important crossover has just occurred on my indicator.  NBR (Neighbors Industries) went up on heave volume.  The new bar established a higher high and higher low even though the price increased by just four cents.  The volume was so heavy though that NBR appears to be readying for a breakout to the upside.  When analyzing the NBR nearterm chart it is clear that this stock is forming a flag pattern and is supported by NBR’s 20 day moving average.  I checked a longer term weekly chart for NBR for 900 periods.  That chart shows the current price for NBR to be supported by its 50 period moving average and clear upside potential to about $14 to $14.50 per share.  This is about where the 38% Fibbonacci line is as well as the 200 period moving average.  I wasted no time inputing an order to my paper trading account to buy 9 October Call options.  I set a limit price of $1.30 per option contract.  If the trade goes through I will look forward to take my first profit on 3 NBR options contracts when the contract price rises to $1.75.  I should mention that this crossover on heavy volume was from -.1 on my chart to .23.  It went almost straight up.

There was another crossover I should discuss, but this crossover was not nearly as exciting.  DNR (Denbury Resources crossed in a shallow way from -.07 to ,03 on onlymoderatley high volume.  On the shortterm chart DNR is caught between the 20 period moving average and the 50 period moving average.  The last bar was much closer to the 20 period moving average than the 50 period moving average.  Its high price touched the 20 period.  Now if only DNA can break above the 20 period moving average that would be a clear signal that DNR is headed higher.  On the long term chart it appears that DNR is struggling to launch off of its 50 period moving average to meet resistance quite a bit away at the 200 period moving average.

The only other news tha I have to report is that OAS moved to the cenerline but not above it and that MT moved from .3 on my indicator to .2.  It will give a signal to buy puts if it moves below the center line especially on heavy volume.  My current position in AMD is at a small loss.  I will monitor it through the end of the week to see if it improves.  If not, in keeping with my 2 week rule I think I will exit the position.

I forgot to mention that I just had another sale of FCX options yesterday.  3 more options sold out at a price of $1.70.  This gives me $70 of profit per option contract.  I put in an order to sell the last 3 options contracts for $2.10.  So long for now!

 

EC Morris

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