QIHU: Spread closed

I closed my position in QIHU last week for a loss of $591.10.   The loss was within my risk tolerances but for an option trade I should have adopted a smaller risk profile on this one.   I wisely hedged the position once it started to move against me.  But I probably would have been better off hedging with stock instead of shorting the 17.5 puts with a lesser amount.

This was a stock that I fell victim for the anticipated "home run" as there were numerous articles claiming this is a fraud.

Anyway the stock just went parabolic.  However, It's one to watch because there is divergence on this move and lower volume.  That being said, I'm not going to stand on the tracks of a freight train and hope it slows down.   If I decide to short it will be on the next spike following a pull back.  If it cannot push the MACD and the RSI shows a divergence then and only then will a short position look attractive.

QIHU

So its Earnings Day.

A new report from Citron alleging fraud.

Earnings beat by .08, AH run.  wild day.      These are the type of stocks where I'm glad I have options
Instead of short shares.  Either it's fraud and its worthless or it's actually putting up the reported numbers and which case it soars.   Anyway, it's likely that the momentum buyers make a run at it tomorrow.  We'll see.

Position Updates

After 5 red bars, the impulse bars  went blue for 2 bars, on an up move.   There was no follow through after the up move,  closing down on the second bar.  The MACD did not go positive.   No reason to cover yet.

PZE:   This was a poor stock choice.   On the chart, it's setting up decently with a nice  flag.   However, the volume is terrible.  Only 17.7k shares on Friday.  This was a trade that is too thin for trading and I should have passed.    I'm slightly down on this position.

QIHU:

I have July 15 puts.  The chart does not look terrible as there MACD is showing divergence and the selling pressure has been lower on subsequent downward moves.  

That being said, Picking up puts  was not a "chart" trade.   This company has been dogged by fraud allegations.  Some of the research that I reviewed for this trade includes:
Stock Citron
Delloit Watch
The Street.

If QIHU is a fraud then it will fall regardless of the chart.  Earnings come on on Feb 22.