MomentumOptionsTrading.com Midday Update for 6/26/2014
Bears Back on the Prowl
The bulls were looking to extend their Wednesday gains and make another run at all-time highs today but the bears have been relentless in their pursuit in getting below key support levels.
The trading range that is developing is hinting at lower lows but there is still another half of trading to go and the bulls will be fighting just as hard to hold support.
Nike (NKE, $76.08, down $0.39) will report their numbers after the close and will weight on the Dow Friday. Analysts are expecting the company to earn 75 cents a shares on $7.34 billion in revenues.
There are 26 suit-and-ties that follow Nike with a high estimate of 80 cents a share with a low estimate of 70 cents a share. This means there is a good chance of a big beat or miss.
Bed Bath & Beyond (BBBY, $56.26, down $4.85) is sinking 8% after lowering their outlook and missing Wall Street estimates. I mentioned there could be a dip to double-nickels if they came up short and today’s low checked in at $54.96.
The August 55 calls (BBBY140816P00055000, $1.10, up $0.60) have doubled on the move. I had recommend these calls back in May and was whipsawed out of the trade for a slight profit earlier this week after shares popped past $61.
I should have looked at the July puts but there was also the chance of the company beating estimates so I stayed on the sidelines.
I have played Nike’s earnings from time-to-time over the years, usually bullish, but I am not as confident this time around. However, I don’t like making short bets against Nike.
Heading into the final hours of trading, the Dow is down 83 points to 16,784 while the S&P 500 is lower by 9 points to 1,950. The Nasdaq is declining 18 points to 4,361 and the Russell 2000 is slipping 5 points to 1,177.
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