Stocks to watch Wednesday

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I’ve added the below to my watchlist for Wednesday:

• Precision Cast Part (NYSE: PCP) - Dec 145 Call @ 7.25
• Goldman Sachs (NYSE: GS) - Oct 220 Call @$4.75
• Alcoa (NYSE: AA) - Jan 150 Call @ $1.50
• BHP Billitan (NYSE: BHP) - Nov 70 Call @$3.50

I believe the market may have a little more to give tomorrow, but there will be a buying opportunity in the above 4 stocks. I’m going to watch closely.

I’m expecting all 4 stocks to open with small dips and that slowly recover through the day, thus the prices I have set for my limit orders. Remember if you buy at the right price you can still make money even if the stock closes lower overall for the day.

If Goldman Sachs hits $194 I will most likely sell my position and reopen at the $190 handle.

I’ll be watching and if it looks like the market is deteriorating further I will close all my positions at a loss if need be and wait for confirmation of an upswing.

Updates:

12:30 EST

I scalped Goldman Sachs last night for $300 in pre-market trading. I generally don’t recommend doing this, but my gut-feeling was strong on this stock. Again, not the best reason to do so. I broke one of my rules of no non-market hour trading. I’m down $1100 for the day on CAT, BHP, and AA collectively. The good news is my Goldman Sachs option is performing as expected today and I’m getting some good price action. I should have waited 1 more day to buy the other 3. We’ll see at the end of the day how bad the damage is.

5:00 EST

Market is closed and I had 2 round trades complete today. My Goldman Sachs stock and options netted me $914 for the day. Unfortunately I closed the day with 3 open positions with paper losses of $1305. I am currently holding a net paper loss of $391. My AA, BHP, and CAT options all ended in the red. At one point in the day they were down collectively as much as $2000. It was quite a volatile day in the market. I usually don’t like holding overnight and will most likely close these 3 positions tomorrow be it loss or gain. That is the discipline one must have. Take your small losses, take your small gains, take your big gains, but never HOLD ON to large losses in the hopes that it will come back. These are small losses relative to the number of options otherwise I would have sold them today at a loss. There was momentum going into the close that leads me to believe tomorrow will be a more opportune time to sell.