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Thursday, March 25th, 2010
10:05am (EST)
For those of you who rely on our Twitter posts and cell phone alerts, they are triggered when we when update the site. We wanted to send out this alert so that you check your email on some important trade updates. We are rolling on our Best Buy (BBY, $44.22, up $3.04) play which is up over 200% but we have some other trades that are breaking out as well. Check the Members Area for the updates.
 Best Buy: 10-Minute Chart
Tags: BBY, Best Buy
Posted in Hot Stocks | Comments Off
Thursday, March 25th, 2010
9:10am (EST)
The market took a breather on Wednesday after breaking through key technical resistance levels on Tuesday. Although Wednesday was a down day, the major averages held those previous levels which now become short-term support.
The Dow fell 53 points, or 0.5%, and finished at 10,836 as 22 of its 30 stocks ended in the red. The index traded to a low of 10,825 but still held 10,800 which is what we were looking for given the backdrop of yesterday’s events.
The S&P 500 slipped 6 points to settle at 1,167 but held the 1,150 level. We would still like to see a break above 1,175 which should get us to 1,200+.
The Nasdaq took the worst beating as it dropped 17 points, or 0.7%, and closed at 2,398.76. The index broke below our 2,400 level by a smidgen but still looks strong.
Best Buy (BBY, $41.54, up $0.03) released earnings before the bell and easily beat Wall Street’s expectations. The company reported a profit of $779 million, or $1.82 a share, versus $570 million, or $1.35 a share in the year earlier period. Analysts were looking for $1.79 a share.
Revenue increased to $16.6 billion versus expectations for $16.1 billion. The company says it expects a profit of $3.45-$3.60 a share for the year which was better than the $3.37 analysts had predicted.
Shares are up 8% in early action to $44 and our subscribers are going to catch some of that action. We went long and strong on Best Buy call options last Thursday which were up 45% after yesterday’s close. They should double today for a massive return.
Futures are pointing towards a strong open after jobless claims came in better-than-expected this morning. Dow futures are up 36 points to 10,823 while the S&P 500 futures are higher by 5 to 1,170. Nasdaq 100 futures are up 8 points to 1,960.
Tags: BBY, Best Buy Earnings, option picks, option signals, options alerts, stock options trading
Posted in Earnings, Market Analysis, Market Commentary | Comments Off
Wednesday, March 24th, 2010
1:05pm (EST)
The bears have ruled today’s session but the damage has been minimal as the bulls try to add to this week’s gains.
The Commerce Department reported new home sales fell unexpectedly to the in February as the bad winter weather kept buyers out of the market. New home sales fell 2.2 % last month to a seasonally adjusted annual sales pace of 308,000. Wall Street was hoping sales would rise to 320,000.
In other economic news, Durable goods orders rose 0.5% last month, slightly below expectations for 0.7% growth. However, it was the third straight month orders rose which is a good sign.
We mentioned the Portugal news this morning and the market is also dealing with rhetoric that the passage of a financial-overhaul bill is on its way.
Despite these worries, the Dow is only down 35 points, or 0.3%, to 10,853. The index hit a low of 10,826 but held 10,800 which is what we wanted to see.
The S&P 500 has dropped 5 points, or 0.4%, and is trading at 1,169, while the Nasdaq is off 13, or 0.5%, to 2,402.
Stocks have struggled for much of the day but Sprint (S, $4.04, up $0.21) is up 5% after unveiling its 4G Android phone, the HTC Evo, adding yet another rival in the smartphone race. The phone won’t be available until this summer but it has some cool bells and whistles.
We don’t like buying options on stocks under $5 but there is a ton of action in the Sprint April 4 calls (S100417C0004000, $0.28, up $0.14) which have doubled today. The 52-week high for the stock is $6 so investors are seeing an opportunity.
Tags: option picks, option signals, options alerts, Sprint 4G, stock options trading
Posted in Economic News, Market Analysis | Comments Off
Wednesday, March 24th, 2010
9:05am (EST)
“Buy when you are scared to death; sell when you are tickled to death.” - Market Maxim
That was our exact feeling in February after the market stalled in mid-January and was trending lower. From our February 25th, 9am update:
“We continue to feel the current volatility is pointing towards a big move for the market and Greece’s debt is not NEW news. It’s hard to imagine the bulls giving up here and today’s open will be nasty. However, we think there is one more move higher before the Dow fades, and it will be interesting to see how well the bulls battle back this morning.” (END)
At the time, the Dow was at 10,374 and its futures were down 87 points going into the open. By our afternoon update, the index was down 150 points and Wall Street analysts were calling for a break below 10,000. So what did we do? We started looking for call options as a bullish way to play the market.
It was hard for us to believe the rally was really over and first quarter earnings were stellar. However, we knew coming off the “Santa Claus” rally that the bulls might rest which is why we went longer out on some of our option trades in January. We weren’t ready to start buying put options because we didn’t think the Dow would fall below 10,000.
That day, the Dow fell to a low of 10,155. That was 700 points and nearly a month ago. We have been talking about Dow 10,800 and how we could power higher if we got through this level…mission accomplished.
The Dow finished Tuesday with a triple-digit gain, adding 102 points, to close at 10,888. The index hit a high of 10,893 today as 28 of its 30 components ended higher.
Caterpillar (CAT, $62.41, up $2.46), which we had on our Watch List in the Members Area, exploded 4% higher and added some fluff to the Dow’s final outcome.
The S&P 500 closed 1 point under our 1,175 target after adding 8 points, or 0.7%, to settle at 1,174. Next stop…1,200. if all goes well.
The Nasdaq, which has been teasing us by kissing our 2,400 target, finally closed above this level and finished at 2,415, up 20 points, or 0.8%. Tech continues to shine and could be on its way to 2,500.
Of course, that was yesterday and this morning the market has a new set of problems to deal with. Futures were slightly lower but got worse after Fitch Ratings slashed Portugal’s debt rating. Don’t forget Ireland, Greece, and Spain.
There are worries this morning that the economic recovery will be slower than other countries that use the euro, hurting Portugal’s ability to repay its debt. Debt problems in Europe have been one of the few events that spook this market so we will see how much of a role this plays in today’s action.
The market got some good news when the Durable Goods figures were released but futures are still pointing towards a slightly lower open. As we head to press, Dow futures are down 34 to 10,794 while the S&P futures are off 5 points to 1,165. Nasdaq 100 futures are lower 6 by to 1,956.
We have a lot to cover in our Members Area so let’s get to it.
Tags: CAT, Caterpillar, DJIA, option picks, options trading
Posted in Market Analysis, Market Commentary | Comments Off
Tuesday, March 23rd, 2010
12:45pm (EST)
The bulls continue their March towards new highs (no pun intended) as the President signs our nation’s new health bill today. The passage of the landmark legislation is now official and many of the changes will take place this year.
Obama said it gets the wheels rolling on ”desperately needed reforms” sought by generations of Americans. He also said America can afford this bill so we shall see.
In economic news, existing home sales fell less than expected as the National Association of Realtors reported sales of previously occupied homes fell 0.6% last month to an annual rate of 5.02 million units. Wall Street had expected sales would fall to 5 million.
Despite some turbulence, the Dow is flying higher and is up 44 points to 10,830. The S&P 500 is up 3 points to 1,168 while the Nasdaq is enjoying a 6 point pop and is at 2,402.
Folks, if we can hold these levels, we could be setting our sights and our next set of targets for the indexes we have been mentioning all week. We would list them but you already know the deal if you have been following us.
Turning to earnings, Walgreen’s (WAG, $35.74, up $0.31) is getting a slight nudge higher despite reporting numbers that failed to match expectations. The company reported a profit of $669 million, or $0.68 a share, versus $640 million, or $0.65 a share, in the year earlier period.
Sales rose 3% to $17 billion but Wall Street was looking for Walgreen to earn $0.71 a share on $17.2 billion in revenue. Although they missed, Walgreen’s earnings matched depressed expectations and gross margins came in better-than-expected which is why shares are seeing a little bump.
We have a lot to discuss in our Members Area and a few of our trades are making explosive moves today to the good. We also have a NEW trade that we will be going after so let’s get to it!
Tags: option picks, option signals, options alerts, stock options trading, WAG, Walgreen's earnings
Posted in Earnings, Market Commentary, Stock Earnings | Comments Off
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Best Buy (BBY) Blowing Up
Thursday, March 25th, 2010
9:10am (EST)
The market took a breather on Wednesday after breaking through key technical resistance levels on Tuesday. Although Wednesday was a down day, the major averages held those previous levels which now become short-term support.
The Dow fell 53 points, or 0.5%, and finished at 10,836 as 22 of its 30 stocks ended in the red. The index traded to a low of 10,825 but still held 10,800 which is what we were looking for given the backdrop of yesterday’s events.
The S&P 500 slipped 6 points to settle at 1,167 but held the 1,150 level. We would still like to see a break above 1,175 which should get us to 1,200+.
The Nasdaq took the worst beating as it dropped 17 points, or 0.7%, and closed at 2,398.76. The index broke below our 2,400 level by a smidgen but still looks strong.
Best Buy (BBY, $41.54, up $0.03) released earnings before the bell and easily beat Wall Street’s expectations. The company reported a profit of $779 million, or $1.82 a share, versus $570 million, or $1.35 a share in the year earlier period. Analysts were looking for $1.79 a share.
Revenue increased to $16.6 billion versus expectations for $16.1 billion. The company says it expects a profit of $3.45-$3.60 a share for the year which was better than the $3.37 analysts had predicted.
Shares are up 8% in early action to $44 and our subscribers are going to catch some of that action. We went long and strong on Best Buy call options last Thursday which were up 45% after yesterday’s close. They should double today for a massive return.
Futures are pointing towards a strong open after jobless claims came in better-than-expected this morning. Dow futures are up 36 points to 10,823 while the S&P 500 futures are higher by 5 to 1,170. Nasdaq 100 futures are up 8 points to 1,960.
Tags: BBY, Best Buy Earnings, option picks, option signals, options alerts, stock options trading
Posted in Earnings, Market Analysis, Market Commentary | Comments Off