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Recognizing An Oversold Situation On A Monday Morning

Moderna. Let's start with a doggy stock that has a large short position. Now it's opening chart showing both it's five day and morning chart. Here is some news the market is digesting. Isn't this just more news of the same? Now a look at the 28.5 series of Calls at 10:25 a.m.. Now at look at the action at 11:00 a.m. The stock is up 20 cents. It's not enough of a move to get out however the stock is moving in the right direction. Now at 12:11 p.m. there isn't to much new to report. ..... Now this. Now at 12:50 p.m. I would be thinking of watching it trade minute by minute. Now this. It can't get much better than this. I would just get out. The morning fear factor that was attractive on the opening is now long gone. The reasons to now be holding this position have changed. It's called Monday morning daytrading. Selling into strenght can be a remorseful experience but one that most usually is quickly forgotten. I will check back in on this pos...
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Caterpillar - It's First Quarter Earnings Report And Traders Are Staying Away. A Read Which Might Be A Good Reference Point Going Forward.

Boeing rallied yesterday on the release of it's earnings report only then to tank. Caterpillar is tanking this morning in the premarkets. Let's begin with it's 5 day and 30 day chart.
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The world needs to be rebuilt and Caterpillar is there to help. It's growing, it's got a good reputation, it's not laying off employees and it's doing just fine. If it misses a beat on it's earnings report so what? Life goes on. Then there are those pesky analyst who are known to offer a convoluted spin on things. If you like Caterpillar just buy it on the dips and put it away. So the markets will be opening on the commentary by the companies C.E.O of "sales about flat". Phrasing it that way is a recipe for short term disaster.
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The two printouts above show some of the early morning action in one Put series and in One Call series. What happened the next day? A slight rebound with next to no traders trying to capitalize on a rebound. What does this tell us? It tells us option traders in general stay away from trading the "release of earning reports" on Caterpillar.
Now the one week out Call options.
Low open interest, a low volume of trading and relatively big pricings considering the these are only slightly "in-the-money" Calls which might take a few seeks to gain value. The bottom line is that this stock really got beat up and going forward it's going to be again upward journey. It helps that they are buying back their own shares. ** Now a look at how Caterpillar traded at the close on Monday April 29th.
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The volume of Calls traded is very light. That's suprising.

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