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The Sliding Door Syndrome - Hertz

 Open the door and guess what might happen? Who knows which way the winds will be blowing. The used auto car market got dumped on last week in the U.S, especially on tariffs new.  Trump said he might raise the tariffs on cars to more than 25%. It's a fickled  market. Here are a few of the sell offs. 1) Carvana Company. It sold off over $21.00 dollars on the day last Friday. They have a reputation for having share manipulations with a long history of  insider "buying-and selling-activities". They have a short interest of 5.3% . It didn't help much that the DJIA was down over 700 points on Friday. 2} Carmax also sold off on the week. They have an earnings report coming out and that could cause the stock to drop but maybe not. It could actually rally. Here is it's one week chart and a conference call dial in number. Listen to it if you like. I might be. Now here is a look at the 65 series of Calls on this stock that expire this coming Friday.  On Friday morning at ...
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Buying Caterpillar - A "Catching a Falling Knife Trade".

In with two "Calls" at $1.59 each which expire the next day. The stock is down ten dollars in three days on no real news. This kind of judgement calls is sometimes difficult to make. The stock seems to dropping on light volume which is better than on heavy volume. It's a "no news scenario".
Let's see what happens next. A 10:30 a.m. update, one hour after I got in. I am down something like 37%. At this point in time it has turned into a "sit-and-wait" hold. What I like better is an"in-and-out" in thirty minute trade.
Now another look at it at 11:30 a.m. with the D.J.I. now up over 225 points. Remember I got in at $1.59 a contract. I don't enjoy these having to wait until Friday morning situations.
There was a bounce on Friday morning and I got out. It's difficult to read but it says two contracts sold at $3.60 each at 9:49.a.m. Here is it's morning chart.
Would I make this kind of trade again? I am attracted to these "falling knife" chart formations. This one turned out OK for me. My point is, the next time you see one of these chart formations happening remember this blog and my comments about jumping in to quickly. Hopefully my comments will help in saving you some money.

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