Ichimoku Stock Option MTW: Trade Entry Setup 4-14-10

MTW stock broke out the other day with volume.   It has been consolidating for along time.  This is a chance for a new trend to begin.
Here is the Ichimoku chart.  We are looking for a SLIGHT pullback before entering.

You can enter buy purchasing stock or looking at options.  Your stop will be the Kijun Sen minus a buffer.   Below is the risk graph for ONE possible option choice.   On this option choice, we are looking for a pullback, where the option price will go from a mark of 0.80/contract to 0.50/contract for the Jun 16 call options.  It may not pullback enough to change the options so you have to watch it.  The other option is to look at the June 17 calls which right now are being priced at 0.45/contract mark.    The delta is 0.25 so if the stock moves up $1 we are looking at 50%+ which is good.  Also, volatility should be increasing since earnings is coming up

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About the Author Manesh Patel