3/25/2020 [Long post] Markets start recovery and Boeing surges past my 150 recovery target. Still holding long from 90 and a batch at ~125 and 156. New long added to MRO.

Hi everyone, I hope you are having a great day. 

I was quite surprised by the move that Boeing has made these last few days and am slightly upset that my 150 strike price put I sold last week is now “far” out of the money. I sold it for $25 meaning I wanted to buy Boeing at 125. Since I’m selling the put, I only go long when Boeing closes below 150 at expiration (this Friday). Unfortunately, it isn’t under 150 right now, but who knows what will happen – the stock went up almost double in the last 3 days so it wouldn’t be outrageous for it to shed 20% in a day or two.

Luckily, the other 100 strike price put I sold for 10 dollars expired in the money last Friday (Boeing closed at ~95), meaning I am at least long 100 shares at a price of 90. I’m also still long in my retirement account from a price of 156, although that position size is a bit smaller. 

Daily chart of Boeing below. 

BA daily stock 3_25_2020

The original plan to sell the shares at 240+ remains the same. I want to sell at or above 240 for 2 reasons.

  1. The stock has a gap to fill just above 240, so I expect resistance near 240
  2. Mean reversion would be in the low 300s, but I don’t think it would be a super great investment if it reaches that price. I suspect it will reach that price relatively quickly, but I will likely still sell it early.    

Here’s the reasoning. If one investment could earn you 25% in a year (Boeing from 240 to 300) while another could earn you 100% in a year with a bit more risk, which would you take? Since I am still in my early 20s, I strongly prefer the second option. More risk more reward. The stock that I think has a great chance to go up 100% – 200% in a year is MRO.


 

MRO daily chart below. Trade idea below chart.

MRO daily 3_25_2020

MRO is a small cap oil company worth 3 Billion dollars. It has sold off extremely hard since the oil price collapse recently. Nevertheless, the CEO / chairman has been buying shares at around $4. Source

I bought half my position at $3.79 this morning and have a limit order set for $3.35 for the other half. Remember to keep your position size much smaller for this company because it is very volatile. It is also trading at all time lows so it can easily go much lower.

My minimum sell target is $7 (gap fill) and I plan to hold until it reaches the low $10s. Also, I don’t plan to sell it on the down side unless something drastic happens (like the same insiders that are buying it now start selling it). 

 

 

 

 

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