How to Generate Income from Your Stocks

June 4, 2010 // 52 minutes

The Market Guys will show you how you may be able to create income from your stocks with options.

Investing Education Day

July 29, 2010 // Chicago, IL

PIN PRESSURE INDICATOR™

Using Pin Pressure as a leading indicator for setting price targets

AJ Monte, Chief Market Strategist for the Market Guys, has written a paper for the Market Technicians Association on the Topic of Pin Pressure.

This document was grounded in research conducted by the University of Illinois showing how Option Trading Volume affected the price of the underlying stock in which the option contracts where traded.

From this paper, AJ has developed the Pin Pressure Indicator™ which is a calculation that computes the combined open interest traded at various strike prices and uses this data to determine price targets for individual stocks as we approach options expiration Friday.

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0 Q&A from Today’s Webinar

Here are a couple of questions that went unanswered on today’s webinar with Rick and AJ.

Q: BMI looks like good entry point today, is volume ok, and what other risks do you see with this stock from Power E*Trade panel. -Bill M.

A: Today BMI is showing a red candle patter that is called a spinning top. You would typically like to see a green candle the the fact that it is a spinning top indicates a point of indecision. The good thing is that today we had a higher high and a higher low than yesterday. The point you want to watch out for is a close below the 200 day moving average 44.5 to 45. A close below this level would signal and end to your long position. In other words get out if it closes below 44.5.

Q: I have been tracking some stocks KOG, TGC, MBIA and missed the break out when they went up. I am tracking alot of stocks but how do I improve my tracking so I don’t miss catching a run up? -Marty M.

A: We usually suggest that you build a watch list of about 50 stocks that are in upward sloping trends over the past 2 to 3 years. Once you have your stock in the list you would identify the key support levels on each one and set price alerts to notify you when the support level is reached. From there you would wait for the pivot point or bounce off of support and buy the stock. Last thing to do is enter your stop loss order below the support line and sit back and wait for the rally. If you get stopped out just move to the next stock. If the stock moves up as expected then trail the stop loss order to lock in your profits at the stock rallies.