Who needs call options when you have resource tickers? [ARP]

This is my first post on ARP (ATLAS Resource Partners).  It is yet another used-to-be 30 something dollar ticker which has been reduced to penny stock status by the collapse in resource prices.  Yes they loved it at $32 and now they just fraking hate it at $0.67 which was the low of the day.  And why not hate these things?  They are all leveraged and they are all bleeding.  The market's challenge right now has less to do with caring about who makes a profit than it does with worrying about who is going to survive.  Given that I think we are very close - couple weeks tops - to a very powerful vee shaped bounce in oil, I don't think the current surviving players will BK that quickly.  And those which do not BK are going to get the shit bought out of them when oil gets back into the high $50s/low $60s as my current model predicts it will.

Because of this I have been waiting to see if I can catch the deep vee 2nd wave on some of these resource tickers.  This is always a bit tricky because it assumes that the prior bottom was the real near term bottom and that the current sell off was in fact a deep 2nd.  In the case of SUNE, it was actually the 5th wave down.  But in the case of ARP I am thinking that it was a deep vee 2nd which is likely complete as of today's close.  Given that they sold me as much as I wanted for 67 cents per share with a very low spread today, I just have to treat this like a non-expiring call option. 

When you buy a call option (or any kind of option for that matter) with a longer expiration, you generally have to give up 15% or more just to get in because the spread is usually that wide.  Thus, you really have to be committed to it because you can't easily get out.   Of course if you are correct about that bet, the gains can be mind blowing.  But the odds for failure are high as well because even if your thesis is correct, it might not play out before your options expire.  Case in point: I have $5k USD worth of GE options that I bought 12-18 months ago that are going to expire worthless in just a few days.  The market meltdown will probably happen afterward.  You can't win them all...

So buying ARP as if it were a call option provides benefit from a spread perspective but there is another interesting aspect about it as well: an 18% dividend.  This is another company which cut the dividend to the common shareholders without eliminating it completely the way GLNCY did.  I guess they wanted to avoid a shareholder revolt.  But at 67 cents there is not much more to lose and so I think if they cut the divvy right now there would be little downside.  So whereas GLNCY mgt was not that committed to the divvy, ARP mgt seems committed to it.  Let me go out on a limb and suggest that a care for or care less attitude about dividends likely depends on the compensation strategy for the respective CEOs...

At some point all of these insurance companies and investment funds and pension funds are going to stop being scared by the rapid collapse and they are going to be picking through the rubble looking for survivors with big divvies.  Who wouldn't like to buy a company that cut the divvy but is still an 18% payer?  All they are waiting on is to see who survives so they can rush in before everyone else does and buy up the survivors.

In any case, enough babble, why did I wait until now to buy?  Yeah, the chart.  The chart and nothing else.  Not because of fundamentals.  Not because of CNBS stories.  Not because of de-listing notices or because of the analyst estimates, all of which are meaningless at worst and lagging indicators at best.

My read of the chart calls the December low  wave 5 down and it counts 5 waves up off the bottom and only 3 waves back down into a deep vee 2nd.  Does this setup HAVE to play out per my model?  I think you know that I know it doesn't.  All I am saying here is that the odds favor the indicated action and this is all we gamblers can ever fairly ask for.  Only a child hopes to receive more than this from anyone at any price.