RR,
The credit on that trade was $192.00, with a possible Max Loss of $305.00 (though I would close out long before it got that bad). So there's a Possible Net Gain of 62.95% over 6 months, with a Max 1.59 Risk/Reward ratio.
As to TA, one could argue the last higher low was 300.00, and it hasn't undercut that level yet. But I also look at it more broadly in terms of the 3 year move, seeing all that support in the last half of 2011.
I certainly wouldn't buy the stock here expecting it to make new highs anytime soon. But going sideways and healing for a while around 300 seems more likely to me than collapsing much further. The point has been made, so now there should be some short covering, plus bargain hunters buying or re-buying at cheaper prices after the pullback/correction. We'll see soon enough.
CMG is still making plenty of money, just not as much growth to come near term as previously predicted. It's certainly not dying, so the stock could start heading north again after a while, just at a slower clip. The next couple of Earnings Reports should clear up the picture a bit.
I like selling Put Spreads after pullbacks/corrections in uptrends to get better credits. Setting the Strikes below the new support level and then seeing if it holds. Of course when I'm wrong, I have to eat the loss!
As you know, the beauty of a Credit Spread is the stock doesn't have to go up for one to make nice % gains. Just staying at or anywhere above that line will do.
