All MOT options were automatically sold this morning at the market value of $3.50, a 40% gain from the purchase price of $2.50 7 business days ago.
Below is a 6-month graph of MOT with the resistance line drawn in black. This is drawn from connecting the lowest closing prices, and extrapolating forward. It may very well go lower in the immediate future, but this option play should not assume it, as this rate of return is good enough.
We will be looking for more option plays like this. The key features here that motivated this play are the following, based on the day with the right-most 3 red arrows:
- Broke down through 30-day moving average
- MACD turned negative
- Stochastics crossed down through 75% mark
- Heavy volume (at least 150% of average)
In addition to these technicals, there should be 1 other outside influence adding force to the play, without anything else significant that would push it in the other direction. In this case the outside force was the down-trending industry group.
