RIG Gone Wild
It’s been a wild ride for RIG today. The stock gapped almost $2 higher on news that Carl Ichan took a sizable stake in the company. Typically, this type of news creates short term price movement but has little effect over time. Regardless of the news, today’s action in RIG highlights the reason I like to establish all or nothing option positions when trying to pick tops or bottoms on stocks. Stocks can be quite volatile around their turning points and there is nothing worse than getting stopped out only to see the stock do what you previously expected. Last weeks topping signals in RIG are still in play and are even stronger with today’s price action. I continue to hold the position with the notion that my full investment is at risk.
In regards to the broader market, there is still little sign of selling. Most stocks remain above their 7 day moving averages and most intraday selling pressure remains light. I don’t see very many strong entry points in regards to option trades right here but that is typical of the 1st couple weeks of earnings. I continue to hold RIG and 10K in cash. As solid risk/reward entry points spring up, I will look to put that money into play.