11:15pm (EST)
Ford (F, $7.39, up $0.27)
December 6 calls (FLI, $1.85, up $0.20)
Entry Price: $1.25 (5/18/09)
Exit Price: $2.50
Return: 48%
Stop: $1.45
December 7 calls (FLJ, $1.20, up $0.13)
Entry Price: $1.00 (5/18/09)
Exit Price: $1.50-$2.00
Return: 20%
Stop: 75 cents, raise to $1.00
Action: Another new 52-week high for Ford. Nothing else I can add here.
Cisco Systems (CSCO, $21.98, up $0.26)
October 20 calls (CYQJD, $2.55, up $0.10)
Entry Price: $1.50 (6/2/09)
Exit Price: $3.00
Return: 70%
Stop: $2.00
Action: The stock hit a high of $22.40 and the call options traded as high as $2.92 which was a stone’s throw away from our exit target. Tech remains strong and we’ve been in this trade for 2 months now. It is starting to pay dividends and it wouldn’t have been a bad idea to close half the trade up at those levels. That makes it a risk-free trade from here on out.
Bank of America (BAC, $13.97, up $0.45)
November 15 calls (BYOKO, $1.26, up $0.11)
Entry Price: $1.50 (6/12/09)
Exit Price: $2.25
Return: -17%
Stop: If the stock falls below $11, close the position.
Action: Shares broke $14 today and you gotta love the action in BofA this week.
IBM (IBM, $117.86, up $0.60)
August 105 calls (IBMHA, $13.00, up $1.20)
Entry Price: $3.40 (7/14/09)
Exit Price: $12.00 (7/24/09 1/2 the trade was closed)
Return: 253%
Stop: $11.00, raise to $12
August 115 calls (IBMHC, $4.00, up $0.50)
Entry Price: $1.05 (7/16/09)
Exit Price: $2.00 (7/24/09 1/2 the trade was closed, other half sold at $3.25 yesterday)
Return: 245% together
Stop: CLOSED
Action: We were taken out of the 115’s on Wednesday and we have raised the stop on the 105’s call options. Yeah, the 115’s traded as high as $5.13…
Cerner (CERN, $65.57, up $0.44)
August 70 calls (CQNHN, $0.75, down $0.60)
Entry Price: $1.30 (7/27/09)
Exit Price: $2.20
Return: -42%
Stop: Lifted
Action: The calls opened at 25 cents and I said to “play the rebound” meaning we knew the stop was going to get hit and we knew this was an earnings trade. The options have another 3 weeks before they expire.
Microsoft (MSFT, $23.81, up $0.01)
August 23 calls (MSQHQ, $1.07, down $0.06)
Entry Price: $0.78 (7/27/09)
Exit Price: $1.60
Return: 99%
Stop: CLOSED
Action: I’ve been talking all week about this being a “short-term” trade and how we were going to be out by Friday. The exit price was $1.60 and the calls hit a high of $1.59. If you will notice this was a penny shy of $1.60. Now, if you didn’t close the trade then you were greedy. It is important to remember that once an exit target is reached you follow your game plan. I probably should have listed an exit target of $1.56 which is exactly a 100% return but I rounded up.
Visa (V, $67.21, up $0.23)
August 70 calls (VEHHN, $0.85, down $0.30)
Entry Price: $1.60 (7/27/09)
Exit Price: $3.20
Return: -47%
Stop: Lifted
Action: This was the other earnings trade we left open. The calls traded as high as $2.00 today as Visa tried to clear $70 but they faded along with the stock the rest of the day. This was a profitable trade when the calls traded above $1.60. I’ll keep it on the books since I didn’t provide an update at 1:00 pm on the trade but the 80 cent stop was lifted.
Like I said, I don’t do a lot of earnings trades but I couldn’t resist the charts on Visa and Cerner.
Rick@MomentumOptionsTrading.com
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Halftime Hits
Friday, July 31st, 2009
12:10pm (EST)
The Dow is on track for its best month in decades and the S&P 500 and Nasdaq are back at last October’s highs. We still have a couple of hours of trading left in the day but it’s time to start looking towards next week.
The bulk of earnings hit the market this week and will start to taper off from here on out. I’ve mentioned the bulls will be looking for the “next” catalyst to take us higher and maybe they have already found one. The talking heads were calling for a pullback and were preparing for a pullback before yesterday’s huge rally.
Now, there will be a pullback or drops here and there but keep the technicals and fundamentals in focus. We have come a long way from the March lows and just like the sell-off was overblown this rally could have legs that run too far to the upside as well. The point is there will be jostling between the bulls and bears but the back half of the year is looking pretty bullish.
Near term we can continue to enjoy the rally and there is more money on the sidelines than Wall Street thinks. Things are improving but unemployment is at double-digits and we still have to be careful of the land mines out there. We are taking quick profits and our trading strategies are tight. We are banking 100% gains and moving on to other trades.
This is still a trader’s market and nobody knows where the market will be at next Friday or next month. All we can do is make educated guesses and play what we are seeing. I’ll be back Sunday night with an update unless I’m late getting back in town. I try to do the Weekly Wrap every Sunday but I may skip this week. If so, I’ll see you Monday morning.
Ford (F, $7.91, up $0.52) continues to push $8 and is looking golden to hit $10 by year-end if not sooner.
Rick@MomentumOptionsTrading.com
Tags: Cash for Clunkers blog, Ford
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