MomentumOptionsTrading.com Midday Update for 6/27/2014
Nike (NKE) Beats but Can’t Save Dow
The blue-chips needed to gain 100+ points today to break-even for the week. A good earnings report from Nike (NKE, $78.13, up $1.27) after Thursday’s close looked promising but futures were weak throughout the night.
Nike reported a profit of $0.78 a share on sales of $7.4 billion after Thursday’s close and beat estimates by 3 cents. Shares have traded to a high of $79.15 and came within shouting distance of its 52-week high just north of $80.
I mentioned I’m usually pretty bullish on Nike when they report as they have waxed Wall Street’s estimates in seven of the past eight quarters. However, the options premiums were expensive and the momentum wasn’t there to take a chance on the call options.
I have talked about a possible trading range forming this week and into next with lower lows but also mentioned the bears like to take the elevator down.
New highs are still possible next week and into July but the bears are dropping clues and pushing support which is causing Wall Street a little worry.
Monday is the last trading day for June and the second quarter. While Tech and the small-caps are showing strong gains for the month, the Dow is in danger of giving back its gains if the index can’t hold 16,717.
I have also mentioned there are a ton of trades I’m looking at, both long and short, that I’m planning to use going into July, August and September. With the portfolio light, there is no need to rush into new trades as the premiums will likely suffer if the trading range continues.
I have a good feeling higher highs are in store for July but I’m also prepared to go short if a top is in. It just depends on the clues I get over the next week or so.
In the meantime, June has been an incredible month as the Daily portfolio is now showing a gain of nearly 150% on a $10,000 trading account. The overall success rate is nearly 70% for all of my trades. Knock on wood.
Heading into the second half of trading, the Dow is declining 37 points to 16,808 while the S&P 500 is off by 2 points to 1,955. The Nasdaq is higher by 8 points to 4,387 and the Russell 2000 is gaining 4 points to 1,184.
I will be back Sunday night with the Weekly Wrap and on Monday morning with the Daily. Until then, have a great weekend everyone!