1:05pm (EST)
We mentioned in our Weekly Wrap that the bulls could test the upper end of the recent trading range and they got a couple of golden nuggets this morning to fuel the rally. If you missed the charts from Sunday afternoon, check them out again and you will see how close the bulls are pushing resistance. The one thing we want you to take away from the Weekly Wrap is this:
“We have been seeing 1% moves in a choppy market but now we are starting to see 2%-3% moves, and on a weekly basis, 4%-5% swings. This is telling us something and it could mean we are going to see even bigger price swings in the weeks and months ahead.”
As far as today’s action, sales of new homes jumped last month although it was the second-weakest month on record. New home sales rose to 330,000 in June from May’s revised reading of 267,000, which was nearly a 25% increase. Sales for April and March were also revised downward but the news was better-than-expected.
In corporate news, FedEx (FDX, $83.12, up $4.16) gave the bulls a boost after raising its earnings forecast for the quarter and rest of the year. The company said they were seeing more volume than anticipated in the current quarter and lifted their range to $1.05-$1.25 from a prior range $0.85-$1.05. For the full year, FedEx estimated earnings of $4.60-$5.20 a share, up from a prior view of $4.40-$5.

FedEx looks cheap at these levels and its 52-week high is $97.75. However, we would like to see more volume here in the U.S. before jumping on the bandwagon. We played FedEx earlier this year on the way up and at some point late this year or early next, FedEx will be a $100 stock. We just don’t think today’s news will propel it to new highs over the near-term.
Biotech has gotten hot again and there are a number of names on the move as M&A rumors pick up. Genzyme (GENZ, $66.83, up $4.31) is up another 7% today, adding to Friday’s breakout move from $54 to $62, on takeover chatter. There is speculation that Sanofi Aventis (SNY, $29.61, up $0.26) is looking to acquire Genzyme and there are others that could join the race to get this prized jewel.
As we head to press, the Dow is enjoying a 60 point pop, or 0.6%, and is at 10,484. The S&P 500 is up 9 points, or 0.8%, and is at 1,111. Meanwhile, the Nasdaq is showing a 16 point pop, or 0.7%, and was last seen trading 2,285.
We are watching the 1,110 level on the S&P 500 as a sign to see if the bulls will push 1,125. There are layers of technical resistance from here on up and the bears are still holding the fort down but this clears the way for a test higher.
As volatility picks up, we should get the break we are looking for and we are ready to pounce. While it may appear the bulls are ready to ride the rocket ship again, we remain cautious to the downside. However, we have both call and put options on our Watch List so we will be ready either way. Subscribers, check for the important updates in the Members Area.
Tags: call options, FDX, FedEx, GENZ, Genzyme, how to trade options, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, put options, stock options trading, volatile options
This entry was posted
on Monday, July 26th, 2010 at 1:06 PM and is filed under BioTech, Company Commentary, Earnings, Market Analysis, Market Commentary.
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FedEx (FDX), New Homes Sales Lift Market
1:05pm (EST)
We mentioned in our Weekly Wrap that the bulls could test the upper end of the recent trading range and they got a couple of golden nuggets this morning to fuel the rally. If you missed the charts from Sunday afternoon, check them out again and you will see how close the bulls are pushing resistance. The one thing we want you to take away from the Weekly Wrap is this:
“We have been seeing 1% moves in a choppy market but now we are starting to see 2%-3% moves, and on a weekly basis, 4%-5% swings. This is telling us something and it could mean we are going to see even bigger price swings in the weeks and months ahead.”
As far as today’s action, sales of new homes jumped last month although it was the second-weakest month on record. New home sales rose to 330,000 in June from May’s revised reading of 267,000, which was nearly a 25% increase. Sales for April and March were also revised downward but the news was better-than-expected.
In corporate news, FedEx (FDX, $83.12, up $4.16) gave the bulls a boost after raising its earnings forecast for the quarter and rest of the year. The company said they were seeing more volume than anticipated in the current quarter and lifted their range to $1.05-$1.25 from a prior range $0.85-$1.05. For the full year, FedEx estimated earnings of $4.60-$5.20 a share, up from a prior view of $4.40-$5.
FedEx looks cheap at these levels and its 52-week high is $97.75. However, we would like to see more volume here in the U.S. before jumping on the bandwagon. We played FedEx earlier this year on the way up and at some point late this year or early next, FedEx will be a $100 stock. We just don’t think today’s news will propel it to new highs over the near-term.
Biotech has gotten hot again and there are a number of names on the move as M&A rumors pick up. Genzyme (GENZ, $66.83, up $4.31) is up another 7% today, adding to Friday’s breakout move from $54 to $62, on takeover chatter. There is speculation that Sanofi Aventis (SNY, $29.61, up $0.26) is looking to acquire Genzyme and there are others that could join the race to get this prized jewel.
As we head to press, the Dow is enjoying a 60 point pop, or 0.6%, and is at 10,484. The S&P 500 is up 9 points, or 0.8%, and is at 1,111. Meanwhile, the Nasdaq is showing a 16 point pop, or 0.7%, and was last seen trading 2,285.
We are watching the 1,110 level on the S&P 500 as a sign to see if the bulls will push 1,125. There are layers of technical resistance from here on up and the bears are still holding the fort down but this clears the way for a test higher.
As volatility picks up, we should get the break we are looking for and we are ready to pounce. While it may appear the bulls are ready to ride the rocket ship again, we remain cautious to the downside. However, we have both call and put options on our Watch List so we will be ready either way. Subscribers, check for the important updates in the Members Area.
Tags: call options, FDX, FedEx, GENZ, Genzyme, how to trade options, momentum options trading, Momentum stocks, option picks, option stock picks, options alerts, options newsletter, options track record, put options, stock options trading, volatile options
This entry was posted on Monday, July 26th, 2010 at 1:06 PM and is filed under BioTech, Company Commentary, Earnings, Market Analysis, Market Commentary. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.