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Linn Energy, LLC Message Board

  • yelyacs yelyacs Jan 7, 2013 7:25 PM Flag

    Price targets from chart

    just using deviation of price from the 50 day moving average gives buy/sell targets: recent highs last couple years have been $2-3 above the 50 day MA, and recent lows ~$4 below it

    the recent low of 34.8 (also the price giving support all through 2012) was about $4 under the 50 day- that's where I pulled the trigger and bought calls

    but LINE is in a short-term downtrend, and today's price nearly reached the upper down trendline (made by extrapolating the trendline touching the two peaks starting at 42.57 on 11/1) so I sold my short term (april) calls for 68% gain today. I'll buy 'em back if there is a retest of the recent lows, as there was the last time LINE sold off to ~35 last June

    but I am still holding my jan 2014 and Jan 2015 calls, waiting for price to approach 40 (about $1.50 above the 50 day MA currently at 38.46) which LINE has done multiple times in last 2 years. I'll also watch RSI, if it gets above 70 I'll consider selling then too

    I calculate selling my long-dated calls a bit under 40 would generate ~100% gain , and is my immediate profit target on my long dated calls

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    • sold some calls I bought 12/31 as they reached my 100% profit target today. Though LINE price is only ~1.4 above the 50 day moving average, and it may well stretch to 2 above it before consolidation/reaction occurs (LNCO reached 2.5 above its 50 day MA couple days ago), the daily chart is starting to look oversold (RSI, slow stoch etc) so stuck to my discipline and rang the register

      if price does hit 40 quickly, I'll probably sell more calls, but holding my jan 2015 calls until price approaches the upper part of its recent trading range 34-43 got plenty of time

    • thanks Ronharv for pointing out the aspect of risk management in your choice for ITM calls, makes sense. And highlights another benefit of the low premium you paid- helps mitigate the potential for loss in the case of price staying flat

      especially since LINE is still technically in downtrend- so far unable to close above the upper (resistance) downtrendlne defined by connecting the intraday highs starting at 42.57 peak 11/1- all the more reason to consider risk by buyers of soon-expiring calls

      add in that the VIX reached its lowest value in years today (signaling mass complacency)

      and the looming prospect that congress will engage in yet more political brinksmanship (the"debate" over raising the debt ceiling likely to be well under way come mid-February, I'd guess) will unsettle the markets in short/medium term

      • 1 Reply to yelyacs
      • As of 1:45 pm (EST) LINE seems to be under pressure from a fund or institution disposing of its units. If I'm correct, and buyers don't cave, then LINE could well pop into the low 37s when the selling exhausts itself. (It's beginning to exhaust me, anyway, even though I bought 5500 units on margin yesterday at an avg. of 36.83. To avoid a K-1 I need to be out no later than 1/25 , which will cover the dist. announcement and quite possibly the earnings announcement and CC also.)

    • Have shares at 36.5 and Feb37 calls. Line will be between 40-43 within 2 weeks.

      Sentiment: Strong Buy

0.37+0.02(+4.52%)Apr 29 4:00 PMEDT