Interesting questions Sandbath---let's start with this:
(From ETrade Market Edge Second Opinion)
Force Protection Inc
FRPT : NASDAQ
Bearish Overall
last trade: 20.14
as of 12:00 AM ET 7/16/07
Bearish Events
Close Below 13 Day EMA
Close Below 50 Day EMA
Gap Down
Percentage Loser
Price Loser
Trending Down
FRPT closed below its 13-day EMA on 7/16/07. This signal tends to have bearish implications that the near-term trend of the stock is lower.
FRPT closed below its 50-day EMA on 7/16/07. This signal tends to have bearish implications that the near-term trend of the stock is lower.
FRPT gapped lower on 7/16/07, trading completely below the prior trading day's range.
On 7/16/07, FRPT was one of the biggest percentage losers on the NASDAQ as it fell by -2.75 or (-12.01%).
On 7/16/07, FRPT was one of the biggest price losers on the NASDAQ as it fell by -2.75 or (-12.01%).
On 7/16/07, the MACD swung to bearish when it closed below the signal line, a 9-period EMA of the MACD. This means that the underlying moving averages are converging and implies negative action for this stock's future trend.
So from all that and a good look at the chart and the charts of GD, SPAR, OSK, BEAV, NAV and a few others, I look for a test of the 200 day before leveling out. As I see it that is in the low $18's. My buy price is $18.50, (A little higher than the expected bottom because this often runs fast to it's bottoms and bounces back quick and hard) almost a full dollar below support and just a bit above the 200 day moving average. From there I am looking to sell August $25 calls for $1 when/if it gets there. There are $22.50's for August as well so they might be an attractive alternative if the $25's don't approach the $1 level.
I am sitting on 2000 shares bought back at $20.65 average and holding $10,500 from the sale of June and July calls and the profit from losing my shares to the call in June at $25 and buying back at $20.65. I will add 500 shares at the $18.50 mark and add to the leftover cash reserve with the sale of the August calls. (Should get around $2500 for 25 calls)
Since they introduced the options my strategy has changed a bit using the options to hedge the volatility. I am not afraid to lose my shares because of the volatility. It is just like a forced flip dictated by the market. A little patience allows the market to do all the work for you.
These are my opinions and strategies. Please remember to do your own due diligence.
My very best to you.
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