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Microsoft (MSFT) Keeps Momentum, Shares Up

Friday, January 20th, 2012

9:00am (EST)

The bulls rolled out the red carpet after the bell on Thursday as a number of companies were set to report earnings.  Despite the high profile events, the market moved higher as Tech once again led the way.

The Dow gained 46 points, or 0.4%, to finish at 12,625.  The blue-chips closed on their highs for the day which opens the door for a test up to 12,800 as the index ended above our near-term 12,600 target.

The S&P added a 6-pack, or 0.5%, to settle at 1,315.  The index managed to stay in the green all day after testing the breakeven level shortly after the open.  We said there could be fluff up to 1,325-1,350 on the close above 1,300 which would be nice for the bulls to hold going into the weekend.

The Nasdaq jumped 18 points, or 0.7%, and ended at 2,788.  Tech made a run at our 2,800 target but fell short after kissing a high of 2,793.

Yesterday’s news is actually today’s headlines as we have a ton of stocks in play ahead of the open.  Most noticeably, Google (GOOG, $639.57, up $6.66) shares are down a whopping 10% (like we predicted) after the company missed Wall Street’s estimates.  It seems the gains on Thursday ($6.66) were a sign of bad things to come. 

Google was down over $60 at one-point last night in extended trading and in pre-market action, shares are down $50 to $590.   

Elsewhere in pre-market trading, Intel (INTC, $25.63, up $0.24) is up 2% after they beat estimates and offered in-line guidance for the current quarter.  International Business Machines (IBM, $180.52, down $0.55) is trading higher to $185 despite missing analysts’ revenue targets but did up guidance going forward.

And finally, Microsoft (MSFT, $28.12, down $0.11) is pushing $29 after reporting a profit of $6.6 billion, or $0.78 a share, on revenue of $20.9 billion for the quarter.  This was slightly below last year’s showing of $0.77 a share on sales of $19.95 billion for the quarter, but slightly ahead of the 76 cents the suit-and-ties had penciled in.

Shares of Microsoft are at $28.77, up $0.65, ahead of the bell.  We currently have open trades on this name so look for possible Profit Alerts if we take action.  We have a $35 price target on Microsoft by summertime but we want to take advantage of today’s possible pop to lock in profits on our February call options.

Futures are pointing towards a mixed open and look like this:  Dow (-16), S&P (-3), Nasdaq (flat). 

We also have some other current open trades that we may take action on this morning and we have raised the HARD STOPS for a few of them in case there is a pullback.  With the weekend here, we may lock-in some triple-digit profits!  Subscribers, check the Members Area for the updates and stay locked-and-loaded.

Google (GOOG) Drops $30+

Friday, April 15th, 2011

8:50am (EST)

The bulls got their second straight win on Thursday but the margin of victory matched Wednesday’s slight gains.  The bears dominated the early action after hearing initial jobless claims rose by 27,000 week-over-week to 412,000.  Wall Street was looking for 385,000 and the jump back over 400,000 was the headline shocker.  This was the first time in more than a month initial claims exceeded 400K which caused the weakness at the open.

Financial stocks also broke down (again), after rallying past their 50-day moving averages last week.  The lack of leadership from this sector is really starting to weigh on the bulls and we mentioned yesterday that it will take another quarter or two before they bottom or start to rebound.  We took a chance that there would be a slight rally but we got punched in the face by JPMorgan (JPM, $44.97, down $1.28) which told us to wake up.

Oil was also up and closed above $108 a barrel but somehow, someway, the bulls got a “W”.

The Dow added 14 points to finish at 12,285 but traded to a low of 12,163.  The index did reach a high of 12,305 which was prior support but is now acting like resistance.  The break below 12,200 has our attention as it appears 12,000 could come into play as early as next week.

The S&P was up less than a point and remained at 1,314 after trading down to 1,302.  We mentioned on Monday the close below 1,325 spelled 1,300 for the index.  More importantly, a break below 1,300 leads way to 1,275-1,250.

The Nasdaq was down a point and closed at 2,760 but made another “lower, low” after falling to 2,733.  We have outlined 2,700-2,650 as the bears next near-term target area.

There are a few major earnings reports we will cover today but let’s focus on Google (GOOG, $578.51, up $2.23) which announced their numbers after the close yesterday.  The company was expected to earn $8.11 but profits came in at $8.08 a share. 

Revenue surged 27% to $8.6 billion but after commissions to its ad partners, Google’s revenue came in at $6.54 billion.  This was still ahead of analysts’ estimates for revenue of $6.33 billion but expenses have ballooned at the company which is on a hiring spree and included a sweet 10% raise the company gave to ALL its employees at the beginning of the year.

Google has its fingers in a lot of pies so it makes sense that the company wants to attain the best and brightest workers to grow their business but Wall Street is impatient.

We said last night shares would be at $600 or $550 in after-hours and they were.  Although it’s only a 5% move, the headline will be Google is down $30 at the open.

Futures are pointing towards a flat start this morning.  The Dow futures are lower by 2 points t o 12,226 while the S&P 500 futures are up a fraction to 1,310.  The Nasdaq 100 futures are down 2 points to 2,298.

We have added some new names to our Watch List and we may release a trade today for either our Daily newsletter or Weekly Wrap.  If so, expect a Trade Alert before noon and after 10am.  Subscribers, check the Members Area for the updates.

Google’s (GOOG) Earnings After the Bell

Thursday, April 14th, 2011

1:25pm (EST)

It’s all about the notes…

We have been busy today, folks, and there are a lot of good stories to talk about so we are going to be quick because we have a lot to go over in our Members Area.

The bears dominated the early action this morning but the bulls have fought back as we head towards the second half of trading.

The Dow is down 13 points to 12,257 while the S&P is off by 3 points to 1,311.  The Nasdaq is lower by 14 points to 2,747.

Google (GOOG, $577.00, up $0.72) announces earnings after the bell.  We will be listening to the company’s conference call with a Bob Segar classic in the background…Turn the Page.  All eyes will be on the company’s CEO, Larry Page, who recently took back the gig to run Google.

Google doesn’t make the dramatic moves like past years after posting their numbers but this time could be different.  If we had to guess, we think shares hit $600 or trade down to $550 in after-hours trading. 

We will be back in the morning with a full update. 

Freeport-McMoRan Splits, Options Back in Play

Friday, February 4th, 2011

1:05pm (EST)

We often get asked why we don’t recommend options on stocks like Apple (AAPL, $345.21, up $1.77), Google (GOOG, $609.59, down $0.56) or IBM (IBM, $163.46, down $0.07).  These stocks show tremendous price action and there are numerous, other, momentum stocks we do follow but shy away from trading options on. 

Trust us, we would love to trade options on the “high-flyers” and we have in the past and do from time to time but one thing these companies all have in common is that their shares trade in the triple-digits.  This means option premiums are expensive and instead of buying options that are $1, you are paying $5, or even $10 for a near-term slightly out-of-the-money call or put.  So, if you like to buy 10 contracts for every trade then instead of spending $1,000, you are spending $10,000.  Big difference.

We like to use 5% moves in a stock to make 100% on our option trades and it is a lot easier doing it on stocks that are under $100.

To give you an example, Google call options are/were very popular for years after the company became public.  Our editor-in-chief, Rick Rouse, use to recommend these types of trades back in the day and here is a breakdown of one of his trades.

In October 2005, Google was just under $300 a share heading into earnings and of course, they knocked the cover off the ball as they were smashing estimates quarter after quarter back then.  The November 310 call options were at $10 when he profiled the trade and by mid-November the stock was at $400.  The options were at $90 and the return was 800%. 

You could also buy just 1 option contract on the higher priced stocks but most of the times the bid/ask is wide enough to drive a tank through and volume is light.  By playing options on stocks under $100 there is more liquidity and closer strike prices to where the stock is currently trading at.

Although we do occasionally play options on the high-flyers, we were glad to see Freeport-McMoRan (FCX, $56.89, up $0.63) do a 2-for1 stock split this week.  We love playing this name and you will see over the years we have used calls AND puts when it comes to trading Freeport.  It just depends on the trend.  

While it is so true that stocks splits don’t mean a thing - instead of owning 50 shares of a $100 stock, you now own 100 shares of a $50 stock on a 2-for-1 – stock splits are helpful when it comes to playing options.

Freeport has become a pure-play on copper (and gold to a degree) and has just become another candidate for our Watch List.  We aren’t profiling any options just yet because we want to do a little chart work over the weekend but you can bet our subscribers will be seeing this name in the future.  Now, if we could only get Apple or Google to do a 10-for-1 stock-split.

Next week should be busy and we have few high-profile earnings announcements we are watching.  Cisco Systems (CSCO, $22.05, up $0.14) and Walt Disney (DIS, $40.52, up $0.02) will report earnings, as well as Akamai Technologies (AKAM, $47.84, down $0.27) and Advanced Auto Parts (AAP, $63.72, up $1.24) just to name a few.

We are also working with a new auto-trading partner, Stifel-Nicolaus, and we will be posting more information in the coming weeks on how you can sign up through our website to have our option recommendations filled for you automatically.  For those of you that want a head start, go here

We are excited to bring them on board and we are working with a few other partners (OX) to cover some of the other brokerage firms our subscribers use.  If you have a request, please let us know and we will look into it.

As we head to press, the market is mixed but is showing signs of moving higher into the closing bell.  The Dow is down 3 points to 12,059 while the S&P 500 is off less than a point to 1,306.  The Nasdaq is higher by 6 points to 2,760.

We released 2 new trades earlier today and we are closing another one to lock in profits.  This brings our track record for 2011 to 10-out-of-11 winning trades with 3 triple-digit winners!  If you wanna see the results, trade by trade with exact entry and exit prices and on what day they were opened and closed, email us.

We will be back on Sunday night with the Weekly Wrap.  Until then, have a great weekend!


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Trader Comments:

    REGINA L.
    I just want you to know that I love the way you write and explain everything. I am new to this, and have lost 50% of my account until I met you guys. Iit is slowly coming back. I will be calling to set up a year
    of membership rather than the one quarter. Thanks again, and LOVE YOU ALL.

    STEVE T.
    Rick, I appreciate the advice. I think I will just sit back and utilize your selections only for awhile. This will obviously save me a great deal of money in commissions. I have gone thru your entire site including the video on money management. This has brought me to the stark realization that I have been trading too much for too little. I definitely have not been "swinging for the fences", but I also think I have been getting impatient with trades and getting out too fast. This has no doubt caused me too trade too much. I like, and definitely agree on, the advice on money management. Thanks for the help.

    SCOTT H.
    Thank you!!! I held on to the NFLX position since Nov. 13 at a cost of $1.89. Sold ½ on April 14th for a 540% return and the other ½ upon earnings for 702% return. Total profit of $11,615 a 621% return. Keep the recommendations coming and thanks to you and your team for the service you provide.

    PETER G.
    Rick & Team, GREAT Call on NKE for my two trading accounts:
    1) Entry at .65, out at 1.45, 1.55 Profit = $415
    2) Entry at .60, out at 1.75, 1.50 Profit = $485

    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.”

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