SOLD -2 ABB 100 FEB 09 12.5 PUT @1.20

I went long ABB by shorting its February 12.5 Puts. ABB is holding its 12 support very well on this bloodbath day on the market.

I'm selling puts instead of buying the shares because I want to keep my 50% cash available for a potential rally soon.

[caption id="attachment_1036" align="aligncenter" width="500" caption="ABB Ltd."]ABB Ltd.[/caption]

Upside: Inverse head and shoulder forming. Positive divergence on indicators at this neck level.

Resistance: \$14

Downside: Diminishing volume for past couple of months. 200 day MA still down and 10 day MA just turned downward too.

Support: \$12

Bottom line: So many stocks and indices seem to be tittering at their supports today. I even considered entering into FAS or UWM for a bounce move. But I decided to be safe and placed my bet on strength and clearer signs. Since I entered when ABB is trading at \$12.17 and my stop is \$11.90 or so, I consider this to be a low risk trade for a potential Obama rally next week.

Target: \$15

Stop: Just below \$12.