Addition to Tax Loss Portfolio … ROC

Earlier today I started a new tax loss long position in ROC.  As I have noted in many of my early postings this year, ROC has shown early strength as price bounced off of its early December lows.  I have been monitoring the pullback to see if I could get a starter position in place.  I’ve done that today by starting a long NOC Jan $250 call @ $12.70.  Here are the charts I have been watching …

NOC 195-Minute Chart #1

As you can see on the above chart, NOC made a nice 3 wave pattern into the early December low … we have pulled back from the first move higher out of that low and currently, price is holding the SLOT support zone.

I noted on the chart that this morning’s first candle made a possible reversal candle … that is where price pushed to a new low and then reversed to close above the low of the prior candle.  For the 195-min time frame, I typically like to see “three consecutive new lows” when putting in a possible reversal candle – we had that with NOC this morning.

The current 195-min candle is an inside candle, and if this morning’s candle is a true reversal candle, this morning’s low will not be taken out ($254.28).

NOC 195-Minute Chart #2

You can see on the relative strength vs the S&P 500 Index chart on the right that NOC is showing the type of relative strength I like to see if I am looking for a reversal trade out of a possible end of price structure low.

NOC 30-Minute Chart

I’ve included a Volume Profile analysis on the above 30 min chart to show the level that price needs to get above to give me additional proof that the December bottom is likely in for NOC.  Once we get above that level, I will be looking to increasing the size of my NOC trade via options and likely common stock as well.

Cheers … Leaf_West

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