AMLN, My first trade on the 11K challenge

OK, so the bearish stocks (DE, CREE, RRGB) have not bounced yet to a level that I would consider safe. Perhaps it will take some time. Perhaps they will never be wise choices.

In the meantime, I have been following AMLN for a month. Back on June 13, AMLN triggered my system with a strong jump in heavy volume. The catalyst checked out as the new drug to treat diabetes was showing good results.

http://finance.yahoo.com/q/h?s=AMLN&t=2005-06-13

This is precisely the kind of catalyst I am interested in. Fundamentally, the company has been losing money, but this drug might turn it all around, and the interest in the stock on that day showed so.

On earnings, however, the stock took a bit of a tumble, but now it seems poised to rally to the high 20's, and that should give us good profit.

My Elliott wave anlysis checks out too. The chart below shows that a down pattern was completed in early june. We will try in the month ahead to find stocks that make a initial jump after a long but fully complete correction pattern.

AMLN could easily go to $30 in the months ahead. The evindence is that AMLN may form a double zigzag, which is a sharp pattern UP. So let's enter a trade tomorrow morning.



As proposed in my challenge, I will not exceed the 2,000 investment. I will place the trade at or near the money ($22.5). The long month will be Jan, the short will be October.

As I get confirmation, I will post the image in this blog, as well as the account status, as we go. I will immediately thereafter enter a suitable stop loss, contingency order.

Here is the trade:



Here is the confirmation of my trade, early in the morning of Aug. 19th



We have now one position in the account. We will keep track of the progress we make.

BEFORE TODAY:



TODAY: