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Upgrades Could Keep Momentum Going

Monday, March 8th, 2010

9:00am (EST)

Futures are trading in a narrow range this morning as we get ready for the upcoming week. There is little economic data due out during the first half of this week and earnings are coming to a crawl so Wall Street will be looking for other cues to give the market direction.

Asian markets surged last night in their first trading session following the upbeat U.S. jobs report but the European markets fell slightly.

The good news, if you are bullish, is that there are a lot of upgrades on stocks this morning that could get the bulls in a buying mood.

Research In Motion (RIMM, $69.50, down $0.48), Yahoo (YHOO, $16.06, up $0.25) and U.S Steel (X, $58.90, up $2.26) all got upgrades and are showing higher bids in pre-market trading.

yhoo030810

x030810

M&A (mergers and acquisitions) activity continues to pick up… American International Group (AIG, $28.08, up $1.37) is selling one of its major foreign subsidiaries (Alico) to MetLife (MET, $38.92, up $0.81) for $15.5 billion. It is the second major sale for AIG this month as the company tries to get leaner and meaner.

aig030810

The Entertainment stocks could get a pop after seeing “Alice in Wonderland ” bring in a whopping $116 million in its opening weekend – a record for a 3-D film. We knew Alice would be a hit and the total easily surpassed all other films in release and gave Walt Disney (DIS, $33.22, up $0.65) an even bigger opening than “Avatar.” Imax (IMAX, $13.72, up $0.40) also benefitted as their theaters were packed all weekend long.

Earnings:

Monday: Casey’s General Stores (CASY, $31.86, up $0.21), Kronos Worldwide (KRO, $15.69, down $0.27), ResCare (RSCR, $9.53, up $0.34), TiVo (TIVO, $17.50, up $0.97) and Value Line (VALU, $25.42, up $0.45).

Tuesday: Boston Beer Company (SAM, $50.54, up $0.74), Dick’s Sporting Goods (DKS, $25.19, up $0.83), J. Crew Group (JCG, $45.61, up $1.55), Kroger (KR, $22.74, up $0.05), Overstock.com (OSTK, $13.43, up $0.35) and Tootsie Roll (TR, $28.17, up $0.87).

Wednesday: American Eagle Outfitters (AEO, $16.74, up $0.01), Bon-Ton Stores (BONT, $11.78, up $0.68), Elbit Systems (ESLT, $60.58, up $0.09), Gymboree (GYMB, $45.15, up $0.40), Hot Topic (HOTT, $6.71, up $0.08), Men’s Wearhouse (MW, $25.17, up $0.74) and Vail Resorts VPFG, $15.48, up $0.18).

Thursday: Aeropostale (ARO, $25.56, up $0.56), Goldcorp (GG, $40.37, up $0.80), National Semiconductor (NSM, $14.67, up $0.04), Pall Corp (PLL, $41.32, up $0.68), Piedmont Natural Gas (PNY, $26.74, up $0.35) and Smithfield Foods (SFD, $19.09, down $0.36),

Friday: AnnTaylor Stores (ANN, $18.50, up $0.53), Citi Trends (CTRN, $29.50, up $0.13) and Kirkland’s (KIRK, $18.81, up $0.81),

As we head to press, Dow futures are up 7 points, S&P 500 futures are up a point while the Nasdaq 100 futures are up 2. Current subscribers, check the Members Area for the updates.

Tags: AIG, DIS, met, option picks, option signals, options alerts, RIMM, stock options trading, x, YHOO
Posted in Company Commentary, Earnings, Market Analysis, Market Commentary | Comments Off

Going For Four

Wednesday, March 3rd, 2010

1:00pm (EST)

The bulls are trying to extend their recent winning streak to four sessions as they continue to push the market higher. As we go to press, the Dow is currently at 10,461, up 55 points, while the S&P 500 is higher by 7 points to 1,125. The Nasdaq is showing an 11 point pop and stands at 2,292.

We mentioned in our Weekly Wrap that our targets were 1,175 for the S&P 500; 2,275 for the Nasdaq; 10,800 for the Dow over the next few weeks. As you can see, the Nasdaq has already powered through our initial target but we also said the index should show the most strength as the market moved higher. The next level of resistance could come in at 2,325.

There is plenty to talk about today but the one company we want to mention in our afternoon update is Joy Global (JOYG, $55.55, up $4.06). The company reported earnings today and they crushed Wall Street’s estimates.

Joy Global Inc. - Hourly Chart

For the first quarter, the company earned $76 million, or $0.73 a share, versus $85 million, or $0.83 a share, in the year-ago period. Although these numbers were slightly below last year’s results, Joy Global raised 2010 estimates as they are seeing many areas of their business pick up. Wall Street had expected earnings of $0.64 a share.

We were recently stopped out of call option trade on Joy Global against our wishes although we had a feeling we had a Tiger by the tail. We profiled the March 55 calls (JQY100320C00055000, $2.38, up $1.40) on February 18, at $1.10, and they would have been a sweet double for us but we were just a little early on the trade.

We don’t like going back to a trade after getting stopped out but we should have kept our eye on Joy.

In any event, we still LOVE the current trades we have on the books as one of them is approaching a 150% return in just over a week. Some of our other trades are also showing a nice pop today and we cover them in the Members Area.

We have been super busy over the last few days but we are still updating our 2010 trades in our Members Area as they come. Once we close some of the current ones out, we will make the closed trade(s) information available to non-members.

We still believe 2010 offers a lot of opportunities for some fat profits but what we are seeing is that we have to be a little quicker with our trigger finger. In 2008, the market was conducive for buying put options while in 2009 call options worked well. The difference with 2010 is that we are in a range bound market (for now) where as 2008 was straight down and 2009 was straight up.

This means we have to take quicker profits and cut our losses sooner but we are adjusting well. We will be back in the morning with another update but don’t forget Friday will be a huge day for the market as we get the unemployment numbers before the bell. As such, we are trying to close positions and take “half profits” on some of our trades ahead of the event. Subscribers, check the Members Area for the important updates.

Tags: option picks, option signals, options alerts, stock options trading
Posted in Company Commentary, Earnings, Hot Stocks, Market Analysis, Market Commentary, Trading Psychology, Trading Tips | Comments Off

M&A Heats Up

Monday, March 1st, 2010

1:00pm (EST)

The bulls came out in a buying mood this morning as mergers and acquisitions (M&A) activity continues to pick up and more information about a possible European bailout of Greece has lifted the market.

At midday, the Dow is up 80 points, or 0.8%, to 10,404, while the S&P has climbed 10 points, or 0.9%, to 1,114. The Nasdaq is showing the most strength as the index is up 31 points, or 1.4% to 2,270.

We mentioned the AIG (AIG, $26.30, up $1.53) news this morning and in other M&A activity, OSI Pharmaceuticals (OSIP, $56.41, up $19.39) is up a whopping 52% after getting a buyout offer from Japanese drugmaker, Astellas Pharma. The $3.5 billion takeover offer for OSI Pharmaceuticals is being presented directly to shareholders after being rebuffed several times by executives at OSI.

osip

We saw some action in shares of OSI last week but we didn’t think a buyout was right around the corner. Too bad. The March 35 calls (GHU100320C00035000, $20.90, up $18.70) are up 850%…

In economic news, the Commerce Department said personal spending rose 0.5% in January. Wall Street was looking for an increase of 0.4%. However, personal income edged up 0.1%, below the 0.4% forecast by the pencil pushers. It was the slowest growth in income in four months.

Meanwhile, the Institute for Supply Management (ISM) said its manufacturing index fell to 56.5 in February from 58.4 in January. Wall Street was looking for a print of 58. The one silver lining was that the report sees manufacturing employment improving. The ISM releases its services industries index on Wednesday.

Before we go, we thought we would mention the strength Sandisk (SNDK, $31.95, up $2.80) is showing today after the company boosted its first-quarter guidance to reflect more demand for memory chips. The 9% pop has the stock at a new 52-week high. Sandisk was on our Watch List but we just missed bagging a 200% return…

sndk

We have some other trades that are doing really well today but obviously we are disappointed we didn’t pull the trigger on Sandisk last week. Current subscribers, check the Members Area for the juicy updates.

Tags: Mergers and Acquisitions, option picks, option signals, options alerts, OSI Pharmaceutical, OSIP, Sandisk, SNDK, stock options trading
Posted in Company Commentary, Earnings, Market Analysis, Market Commentary, Mergers and Acquisitions, Option Trades | Comments Off

Bulls Ready To Run

Monday, March 1st, 2010

9:05am (EST)

Futures are pointing towards a higher open this morning following reports of a new bailout package for Greece. The foreign markets rallied overnight on growing hope that the European nations will announce a bailout deal to help Greece with its mounting debt problems.

The market is also getting a lift after American International Group (AIG, $28.23, up $3.46) agreed to sell its Asian life insurance business to Britain’s Prudential PLC for $35.5 billion. It’s the biggest deal yet made by AIG since it received multiple bailout packages from the government during the credit crisis but the company is still bleeding. AIG reported disappointing fourth-quarter results Friday and continues to lose massive amounts of cash.

aig

In other earnings news, Dish Network (DISH, $20.07, up $0.10) reported a profit of $179 million, or $0.40 a share, versus $217 million, or $0.48 a share, in the year earlier period. Wall Street had been expecting $0.32 a share.

Dish Network

As we head to press, Dow futures are up 27 points to 10,338 while the S&P 500 futures are higher by 1,106. The Nasdaq 100 futures are showing a 6 point pop and are at 1,824. We profile a NEW TRADE this morning in the Members Area so let’s get to it…

Tags: AIG, DISH, Dish Network, option picks, option signals, options alerts, stock options trading
Posted in Company Commentary, Earnings, Market Analysis, Market Commentary | Comments Off

MomentumOptionsTrading.com Weekly Wrap for 2/28/10

Sunday, February 28th, 2010

7:30pm (EST)

The market stayed in a tight trading range on Friday as volume was light following another snow storm that hit the upper east coast. The blizzard that hit New York City kept a lot of traders away from Wall Street and light volume days can be choppy and violent, meaning huge swings, but the market stayed near even for much of the day.

We mentioned the good economic data we got on Friday which seemed to help the bulls case. The Commerce Department reported a 5.9% increase in 4Q gross domestic product (GDP), versus Wall Street’s estimate of 5.7%. Meanwhile, the February Consumer Sentiment Survey from University of Michigan was little changed at 73.6 and in-line with expectations.

The Dow managed to pull out a 4 point gain to close at 10,325 but lost 77, or -0.7%, for the week. However, the index added 2.6%, or 258 points, for the month of February.

The S&P 500 added a little over a point to settle at 1,104 but lost 5 points, 0.4% for the week. The good news is that the index gained 2.9% for the month, or 31 points.

Finally, the Nasdaq added 4 ticks on Friday to finish at 2,238. The index shed just 5 points, or 0.3%, for the week and ended February with a solid gain of 4.2%, or 90 points higher.

Once again, the targets we set back in August will now come into play and they are: 1,175 for the S&P 500; 2,275 for the Nasdaq; 10,800 for the Dow. Although we are still getting mixed signals as far as market direction, we think there is a chance of a decent rally and a retest of the January highs over the next few weeks could come into play.

As far as economic news this week, there are quite a few reports we will need to watch but the big one will be Friday’s unemployment update.

Bad weather could be blamed for a small rise in the February unemployment rate as the number of people filing first-time unemployment claims may have jumped, in part because of the weather. The jobless rate fell to 9.7% in January from 10% in December but is expected to come in at 9.8%.

On Monday, we get a look at January personal income and spending as well as January construction spending. The market will also digest the Institute for Supply Management’s (ISM) figures on the February manufacturing index.

On Wednesday, the Federal Reserve will release its Beige Book and on Thursday the government’s revised figures on fourth-quarter productivity are due along with reports on January factory orders and January pending-home sales.

As far as earnings (quotes from Friday’s close):

Monday: AnnTaylor Stores (ANN, $17.21, up $0.90), AutoZone (AZO, $165.93, down $0.15), Churchill Downs (CHDN, $35.58, up $0.54), Dish Network (DISH, $19.97, up $0.10), Dress Barn (DBRN, $24.86, up $0.03), Foot Locker (FL, $12.97, up $0.20), H&R Block (HRB, $17.28, down $0.06), Kenneth Cole (KCP, $11.72, down $0.46), National Healthcare (NHC, $36.79, down $0.38), Public Storage (PSA, $82.19, up $0.28), Perfect World (PWRD, $39.39, up $2.04), PetSmart (PETM, $27.22, down $0.27) and TiVo (TIVO, $9.48, down $0.13).

Tuesday: Bank Of Montreal (BMO, $53.17, down $0.65), Cooper Tire & Rubber (CTB, $17.54, up $0.35), Diamond Foods (DMND, $34.85, down $3.86), Domino’s Pizza (DPZ, $12.49, up $0.06) and Staples (SPLS, $25.76, down $0.17).

Wednesday: Big Lots (BIG, $33.50, up $0.60), BJ’s Wholesale Club (BJ, $36.17, up $0.18), Canadian Solar (CSIQ, $19.12, down $0.17), Cinemark Holdings (CNK, $16.11, up $0.08), Famous Dave’s of America (DAVE, $6.68, up $0.09), Joy Global (JOYG, $50.79, up $0.56), Royal Bank Of Canada (RY, $54.05, up $0.10) and Sun Healthcare Group (SUNH, $8.89, up $0.09).

Thursday: Anheuser-Busch InBev (ABI.BR, $36.76, up $0.51), Ciena (CIEN, $14.34, down $0.347), Costco Wholesale (COST, $60.97, down $0.43), Del Monte Foods (DLM, $11.72, down $0.16), Overstock.com (OSTK, $12.31, down $0.15), Nash Finch (NAFC, $35.27, down $0.10) and Wendy’s / Arby’s Group (WEN, $4.88, up $0.10).

Friday: Urban Outfitters (URBN, $32.30, up $0.32) and Vivus (VVUS, $8.40, down $0.01).

Speaking of earnings, Berkshire Hathaway (BRK/A, $119,000, up $1,000), (BRK/B, $80.13, up $0.73) reported over the weekend and said net income rose to $3 billion, or $1,969 per Class A share, from $117 million, or $76, a year earlier, on revenue of $30 billion for the quarter.

For 2009, net income jumped 61% and came in at $8.1 billion, or $5,193 per class A share, versus $5 billion, or $3,224 per class A share, in 2008. Berkshire’s net worth rose nearly 20% in 2009 which is the way Mr. Buffett prefers to measure the company’s performance.

No doubt, this will be a story the market follows and Mr. Buffet will be on TV talking about the results on Monday. We will be back in the morning to give you an update on where the market is headed and a full review on all of the current open positions in the portfolio.

As we head to press, Dow futures are higher by 45 points to 10,356 while the S&P 500 futures are up 6 to 1,109. The Nasdaq 100 futures are showing a 10 point pop and are at 1,828. If things hold, we are going higher at the open Monday morning…

Tags: option picks, option signals, options alerts, stock options trading
Posted in Earnings, Market Analysis, Market Commentary, Weekly Wrap | Comments Off

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No fancy spreads. No iron condors. No need to watch the markets all day long.

LAWRENCE O.
Hey Rick! Here is an update on what your picks have done in my accounts.

1) Great call on the JoyG March 55. I bought when you said, then bought again on one of the dips. Booked 80+% profit. Made enough to pay for your service for years to come.

2) Also booked profits on your Berk Feb 74 (80%) and threw a major chunk of change at the March 75’s (190+%). I would have never known that Buffet's stock had split if it weren’t for your service. Bought the shares also for the long haul. Won’t look at them for another 20 years. Great job on getting us in before the indexes did.

3) Took profit on your Imax March 12.5. 20 cent trailing stop at 1.90 yesterday. Not sure what the profit on that was, but profit is profit.

I see that you took a loss on some of these. It’s all good. I look to trade your “ideas” not your exact calls. I THANK YOU! For your ideas and commentary. Keep up the good work. And keep those ideas coming.

C.J.
Loving this subscription so far! I got into the BRK feb 76 calls the day you talked about right before the split...now up over 300% (0.70 to 2.475)! Keep the good picks coming and let's see some OSIS and EMC upside soon! Just wanted to share my positive enthusiasm on your newsletter...it gives us individual investors great ideas on not only the options market, but also the broader equity market! Case in point is BRK...I can't always read the breaking business news but its easy to read your twice daily updates on my smartphone...helped me get some BRK shares immediately after the split which I will hold for the long haul! Thanks again!

SHAUN
Aloha Rick - Thank you so much for the great CL pick. I am not sure if there was buy-out/merger news or what but at 3PM today Colgate-Palmolive absolutely EXPLODED to the upside, and my calls turned into green candy when they went from 1.40 to 3.8 in a matter of seconds! I even sold a few for over 4.0! Much thanks and keep the solid picks up my friend, honestly. Only a fool would scoff at 267% gains... Peace!

MICHAEL K.
I like the fact that you ask for comments from subscribers. Good customer service. By the way, am enjoying the service so far. Some good
profitable calls. Keep up the good work.

PARAG P.
Woo hoo! Out for 50% on WMT this am. Making up for my depression for getting out of pcln for a 30% gain monday :( you the man! any word on the manual? My friend Mike ( who I sent to your service) told me he emailed you about your integrity in reporting fills. I echo that sentiment big time.. keep it up! Cheers!

JAY P.
Hi Rick, as a new member all I can say is, 'show off' LOL, with PCLN.

MIKE
Rick, I am a new subscriber to your service, and I want to say I am impressed. I am impressed by your results, but more than that I am impressed by your reporting of your fills. You could have easily said you got that Wal-Mart call today for 80 cents, instead you reported 98 cents! Good job and keep it up, I watched the reporting of the fills first, and then I subscribed. Thank You.

TRISH D.
Hi, good morning. I jumped the gun a little on this one (PCLN). But still made $1,675.00 profit!! Very happy!! Keep up the good work!! Thanks.

MIN L.
Hi there, I have joined recently, and I am very happy to tell you that I am up over $10,000 on your picks in a month. I started on 10/7 with the Intel pick. I'll be your member for life. Please don't quit on us. Also, I am learning a lot about options. I didn’t get in your recent APOL and that gold trade and only had one loss on CHK. I appreciate all the DD you do. I enjoy your market commentaries. Best advice site period, and I have tried a few here and there. Again, you guys rock!

JOE G.
Thanks be to Momentum Options Trading for providing me with some fantastic wins. I just started with this service and am up nearly 50% in less than a month. There have been losses, but if I manage them properly, I will continue the best efforts given on the blog (in which there are no complaints). What a great cause for humanity. I feel more confident about my trades and continue to play the wins. Best of all, I am now keeping my regular paychecks in the bank! Thank you!

GREG F.
Rick - I wanted to say thanks for getting me started on the right foot with your service. I have made six trades since starting on October 22, 2009. Five are winners and One loser netting me $6,245. Thanks again and keep the trade recommendations coming.

NOEL
I got into the Nike 60 Call at 1.85, sold at 5.00, also bought a 55 put at 1.05, but got stopped out at .35. What a ride! $2830.00 in the black even with the put. It's right at 100% return. I hope earnings season coming up is going to look like this trade.

TODD F.
Nice call on Nike. I think I'll go buy a pair with my profits! : ) I did the straddle for safety but still made 62% on the trade. Not bad for less than 24 hours. If Goldman is right, then the Nov 70s or 75's could be a steal today.

PAUL H.
What a sweet way to get introduced to Momentum. My first trade based on your picks and it a 2X. Thank you!

NOEL
“Limit order was set at 1.60 on RIMM so it sold. I may have left some money on the table but you can't go broke making a profit. That was a fun trade. Thank you. Good call. I’ve been watching and trading Rick's advice since March. It’s usually a fun ride, but I give him heck when it's wrong to. :) ”

CHRISTIAN
“Your service rocks! I made bank on Dendreon last week! The other thing I have to say is that it took me quite a while to find a REAL options trading service like yours. Most of what’s out there is 99% scam and very sketchy. Momentum Options Trading is the first service I found that I can trust and seriously make money with.”

JOHN
“I made $420.00 on ANF in 2 days. Thanks for the trade and updates on getting out of the trade.”

CHARLES M.
“I did follow a lot of your trades with 1-2 contracts per trade and YTD I’m up 108%. I try not to follow blindly by not entering all of your trades and sometimes entering the ones you don’t. I entered AIG a few weeks ago against recommendation – that one hurt.”

BRYAN C.
“I have been following you for several months and am interested in the new service. I hate to see the free service go away but as they say, “all good things must come to an end”. My ability to join will be greatly influenced by the monthly fee so I’m very curious to see the new prices. Thanks for making April a great month for me and my family.”

JOHN H.
“I have really enjoyed the past month since finding your blog. You have made some great calls. I would appreciate info. on the new options mentoring program. Thanks.”

JEFFREY
“Hi Rick, I have been following your blog for several months now and I would like to be including on the list for your new service and to receive more information about it. And yes I was a Dendreon winner with your tips. Turned $280 into $7700, and literally saved my butt.”

ED
“I made over 6k on your Dendreon trade, and I’m very interested in learning how you pick and trade options. Sign me up.”

GREG
“Rick – Wow what a day! I got in at the Dendreon calls at $2.25. Thanks to for your advice. I appreciate that. This company has a lock on this type of therapy and no one else in the world is close. Kind of reminds me of the type of companies that Peter Lynch and Warren Buffet suggest that investments be made in. Companies that can build a moat around their business model, that allows them to charge a premium for their product or service. In other words - a monopoly.”

KEN
“Hi Rick, Thank you so much for the Dendreon trade, I made almost $10,000 with that trade with a little over $2,000 investment. You have shown me the power of options trading. Again, thank you so much for all your inputs.”

GARETT
“Hi Rick, thanks for the encouragement to play the dendreon calls! did freaking great! Got in the first lot at $1.44 on 3-24-09, sold at $2.45, 70% not bad. Bought it back at $2.30 on 4-7-09 closed out on 4-14-09 for 454% gain! Wow! I love it when that happens. So, thanks the encouragement to get back in when others were saying sell, sell, sell. Keep up the good work.”

TERENCE
“Rick – Thanks for Dendreon – it has made all the headlines today! I missed on RIMM earlier, but I’ve been holding onto DNDN calls since 3rd week March. Of course today it all paid off today, as DNDN rocketed up.”

Archive for the ‘Earnings’ Category

Upgrades Could Keep Momentum Going

Going For Four

M&A Heats Up

Bulls Ready To Run

MomentumOptionsTrading.com Weekly Wrap for 2/28/10