AKS Watch

The AK Steel Holding Co. (AKS) is showing a Parabolic SAR bull signal.

I'll say at the outset, any trade in this stock now would break several of my rules, so I'm not going there. But, for a moderate risk-taker . . .

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
AKS $24.15

AKS is a sideways trender, say between $25 and $20. An iron condor on the stock, set up so that maximum profit at expiration is between those prices, would provide a 57¢ premium -- not too shabby.


An iron condor are four different options set up in such a way that they are profitable within a trading range, and quickly become unprofitable if the stock moves above or below that range.

Under this scenario, the last day the options would trade would be on May 21.

Now, the rules that are broken.

Earnings will be announced on April 20. That means the stock is more prone to news surprises prior to the announcement, and to surprising numbers when earnings are announced.

Iron condors are something I don't trade this far out from expiration.

Most positions will give profit without end if they move in one direction, and loss without end in the other.

Iron condors have loss both to the upside and the downside, and therefore I like to make the holding time as short as possible consistent with a decent premium.

Another caution is that the signals are tending bullish while the stock is trading near the top of the iron condor profit range. That's a risk.

So I won't be adding this to the Watchlist, because of the rules and the risk. Perhaps I'll revisit it in a week or so.

Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

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