January 26, 2016 - MDT Alert

While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.

When I suggested the alert on ETE, I suggested a 1/2 allocation anticipating that it would bounce around before finally heading up.

Having said that, today I am not going to suggest you add to that position.

Instead, I will suggest a trade on another stock in the same sector.? That stock is KMI.

KMI or Kinder Morgan had a very strong reversal bar on it's weekly chart last week and it's short term chart has moved into an uptrend.

As I write this, it is trading at $14.62.

In addition, it has weekly options.

My suggestion is to buy KMI at the market.

Then Sell to Open the January 29th - $15 call for every? 100 shares you buy.

The January 29th - $14 calls are quoted at $.66 to $.75.

Try and sell them for $.70.

If the calls are assigned this Friday, the return will be 7.4% for four days.

Use a 1/2 allocation, which based on the nominal portfolio of $100,000 would be 300 shares, rounded to the even 100 share lot.

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