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Monday, April 16th, 2012
1:30pm (EST)
The market is mixed as we head into the second half of trading as the blue-chips are up while both the S&P 500 and Tech are trending lower. Futures were pointing towards a nice pop at the open but the Nasdaq has been weak for much of the session after a positive open. Apple (AAPL, $587.49, down $17.74) and Google (GOOG, $606.29, down $18.31) were leading the Tech sector lower, as both try to hold down the $600 level.
As far as economic news, Retail Sales rose 0.8% in the month of March. Excluding autos and gasoline, the core reading was up 0.7%, versus forecasts for an increase of 0.5%. The Empire Manufacturing Index came in at 6.56, which was well below expectations for a print of 18 while the Housing Market Index for April came in at 25, versus expectations for a reading of 29. And finally, Business inventories were up 0.6% in February, matching expectations.
Citigroup (C, $34.07, up $0.66) is up 2% after reporting better-than-expected earnings but missing on sales. The company reported a profit of $1.11 a share on revenue of $19.4 billion. Wall Street was expecting $1 a share on revenue of $19.8 billion.
As we head to press, the Dow is up 90 points to 12,939 while the S&P is up less than a point to 1,370. The Nasdaq is down 21 points to 2,990.
One of our current trades was stopped out today. Lululemon Athletica (LULU, $73.02, down $0.49) traded higher at the open and our Hard Stop was triggered. We made a nice 25% return in under 2 weeks and we may be back to play this name again, soon. Subscribers, check the Members Area for the updates.
Tags: AAPL, C earnings, GOOG
Posted in Apple, Economic News, Google | Comments Off
Friday, April 13th, 2012
1:50pm (EST)
We remember watching an interview a few years ago with Google founders Larry Page and Sergey Brin who went on record and said they would never split the company’s stock. They mentioned how Warren Buffett has never split Berkshire Hathaway’s (BRK.A, $119,276, down $897) stock and most Wall Street analysts will tell you stock-splits don’t really do anything but create more outstanding shares.
We guess the two heavyweights had a change of mind.
Although it’s not an “official” stock-split, Google did announce a stock “dividend” which it is calling a 2-for-1 stock-split after topping Wall Street’s estimates. The company reported a profit of $10.08 a share versus estimates for $9.65 a share. Revenue did miss by a smidge though, as the company came in at $8.14 billion versus calls for $8.15 billion.
The split is designed to preserve the control of the company by its two co-founders and its corporate structure. The newly created non-voting stock will trade on the Nasdaq but no immediate time table was given.
If this is the case, they could do two classes of Google stock as GOOG.A and GOOG.B. The “Baby Berk’s” are Berkshire Hathaway’s Class B shares (BRK.B, $79.39, down $0.67) so we would imagine Google will likely have the same deal and we will officially dub them the Baby Goog’s.
We have one share of the Baby Berk’s on our office wall as a tribute to Mr. Buffett and we may add a Google “B” share whenever they come out. Believe it or not, you can still get a stock certificate for many of the well-known companies and we like to collect one or two every year. The artwork for some of America’s companies on a stock certificate is our way of collecting “art”. (Go to OneShare.com to get a complete list.)
With the adaption of eBooks and an all digital world, there will come a day when the “stock certificate” will disappear so we thought we would collect some history before they too become extinct.
As far as the market, the bears have taken control of the session and will likely when the week.
The Dow is down 68 points to 12,918 while the S&P is off by 11 points to 1,376. The Nasdaq is lower by 34 points to 3,021.
We have a lot to cover in our Members Area as we are closing another winning trade which will make our 7th of the week and we are lowering our Hard Stop on another position that is profitable. Subscribers, please pay careful attention to the trade instructions.
We will be back Sunday night with our Weekly Wrap and the chart work for each of our open positions. Until then, have a great weekend, everyone!
Tags: Berkshire Hataway stock, BRK-A, class a stock, GOOG stock split, Google earnings, Google stock split
Posted in Earnings, Google, Market Analysis, Market Commentary | Comments Off
Thursday, April 12th, 2012
12:40pm (EST)
Futures were pointing towards a strong open this morning but took a hit after an unexpected spike in jobless claims and a mixed PPI (Producer Price Index) report.
Initial Claims came in at 380,000, up 13,000, versus expectations for 355,000, while Continuing Claims came in at 3.25 million versus a forecast for 3.33 million. Producer prices for the month of March were flat versus calls for an increase of 0.3%. The core reading was up 0.3% versus the expected increase of 0.2%.
In earnings news, Google (GOOG, $644.52, up $8.56) will report their quarterly numbers after the close and their results will likely have a huge impact on where Tech and the Nasdaq go from here. In January, shares fell from $639 to $585 after the company disappointed Wall Street with their results but in October 2011, shares rallied from $558 to $591, after Google announced better-than-expected earnings.
In July of 2011, shares of Google moved from $529 to $597 and in April of last year, shares fell from $578 to $530. Given the last 4 quarterly results, there is no reason to not believe shares won’t move another $50+ in after-hours trading tonight and on Thursday.
The near-term out-of-the-money “normal” options are expensive to trade on Google but there are WEEKLY options for those who want some action.
The April 700 calls (GOOG120413C00700000, $2.10, up $0.70) could be used to play a run to $700 while the April 600 puts (GOOG120413P00590000, $3.75, down $2.65) could be used for a possible break below $600. As you can see, these options are still pretty expensive and they expire THIS Friday.
If we used both options together as a “strangle option trade”, the total cost would be $5.85 which means we would need Google to be at $705 or better for us to be profitable if shares rise on an earnings beat. We would need the stock to test $595 or worse if there is a miss or lowered guidance. While we like the setup, we don’t like the risk/ reward because a 10 contract trade on each side would cost nearly $6,000. One contracts\ of each would cost $585.
We normally like to trade 10 or 20 contracts for all of our positions and sometimes we will trade 30 or 40 depending on price. However, we never like to leverage more than $1,000-$2,000 on any one position so this is what we mean when we say the options or premiums are expensive.
We are going to watch from the sidelines as Google takes the field after the close. While we do think a 7%-8% move is possible, anything less would crush the premiums if shares stayed in between $600-$700.
As far as the market, the Dow is up 147 points to 12,952 while the S&P 500 is higher by 15 points to 1,383. The Nasdaq is showing a 35 point pop and is at 3,051.
We opened 3 new trades today to go along with our current option plays so let’s go see where we are at. Subscribers, check the Members Area for the latest updates.
Tags: goog earnings, Google call options, Google strangle trade, Google Weekly options, strangle option trade
Posted in Earnings, Google, Market Analysis | Comments Off
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.
Tags: GOOG, IBM, INTC earnings, momentum options, MSFT
Posted in Earnings, Google, Market Commentary, Trade Update, Yahoo / Microsoft | Comments Off
Monday, November 28th, 2011
9:00 (EST)
The market continued its recent slide as the bears had their best bull feast in nearly 80 years as Wall Street fell 5% last week. The recent selling pressure became much more serious as all of the indexes fell below their 50-day moving averages (MA) with the bears stretching their winning streak to seven-straight sessions.
The headline news read like a Vegas betting parlor as a number of European countries face further risks of defaulting. Germany was the latest country which showed a chink in the armor after trying to raise $6 billion euro but was only able to raise a little over half of it. Spain also went to the well and was successful in its bond auction but the yields came at a hefty price. Italy faces a huge crisis in 2012 if they can’t raise more dough, and they are trying, but it’s costing them an arm-and-leg.
The news here at home continues to come in better-than-expected and this week will be big with a number of month-end reports due out. As far as the charts, they have been stretched which often happens when headline news trumps the technical picture. The bears have clearly had the advantage and at some point there will be a rebound but until Europe can figure out its mess, the market will be held hostage.
The Dow slipped 26 points, or 0.2%, to finish at 11,232 on Friday’s shortened session. We went into the week looking for 11,600 to hold but that level was taken out on Monday. Our next downside targets were 11,400 and then 11,200, which held, but there is risk down to 10,800 this week if current levels don’t hold. If the bulls can get past 11,400 (black line, purple circles) then they could make a run back towards 11,600 and then 12,000 but the news has got to be awfully good. For the week, the Dow dropped 564 points, or 4.8%, and is now down 346 points, or 3% YTD…
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If you are not a subscriber but would like to read more about where the market is headed and to take a closer look at our chart work along with our current trades, please click here. Since early August we have made 48 recommendation, both calls and puts, and have hit on 40 out of 48 trades for a winning percentage of over 80%! Some of our recent winners include:
+169% on Joy Global (JOYG) call options in 2 days
+137% in Research In Motion (RIMM) put options in 3 weeks
+130% in Spreadtrum Communications (SPRD) call options in 4 weeks
+164% in FedEx (FDX) put options in 6 days
+184% in Goldman Sachs (GS) put options in 5 days
+191% in O’Reilly Automotive (ORLY) call options in 17 days
+100% in VMWare (VMW) call options in 4 days
We are one of the fastest growing stock options trading advisors on the internet. We offer powerful call and put option trades aimed at triple-digit returns for our Daily newsletter. Our Weekly Wrap Covered Call Portfolio strides for double-digit returns on a monthly basis. Sign-up now and receive access instantly!
Futures are pointing towards a strong start for today’s session and look like this: Dow (+255), S&P 500 (+34), Nasdaq 100 (+53). We recommended 4 new trades on Friday and after two weeks of being patient and building new positions, hopefully we get the surge we have been expecting. Subscribers, check the Members Area for the updates.
Tags: Dow, Momentum stocks, stock options trading advisors
Posted in Apple, BioTech, China, Commodities, Company Commentary, Covered Calls, Earnings, Economic News, Entertainment Stocks, European Union (EU), Financial Stocks, Futures, Gold, Google, Hot Stocks, IPOs, Market Analysis, Market Commentary, Mergers and Acquisitions, Money Management, Oil, Option Trades, Rick's Account, Sectors, Stock Earnings, strangle option trades, Trade Update, Trading Psychology, Trading Tips, Uncategorized, VIX, Watch Lists, Yahoo / Microsoft | Comments Off
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Google (GOOG) Beats Estimates, Announces Stock-Split
Friday, April 13th, 2012
1:50pm (EST)
We remember watching an interview a few years ago with Google founders Larry Page and Sergey Brin who went on record and said they would never split the company’s stock. They mentioned how Warren Buffett has never split Berkshire Hathaway’s (BRK.A, $119,276, down $897) stock and most Wall Street analysts will tell you stock-splits don’t really do anything but create more outstanding shares.
We guess the two heavyweights had a change of mind.
Although it’s not an “official” stock-split, Google did announce a stock “dividend” which it is calling a 2-for-1 stock-split after topping Wall Street’s estimates. The company reported a profit of $10.08 a share versus estimates for $9.65 a share. Revenue did miss by a smidge though, as the company came in at $8.14 billion versus calls for $8.15 billion.
The split is designed to preserve the control of the company by its two co-founders and its corporate structure. The newly created non-voting stock will trade on the Nasdaq but no immediate time table was given.
If this is the case, they could do two classes of Google stock as GOOG.A and GOOG.B. The “Baby Berk’s” are Berkshire Hathaway’s Class B shares (BRK.B, $79.39, down $0.67) so we would imagine Google will likely have the same deal and we will officially dub them the Baby Goog’s.
We have one share of the Baby Berk’s on our office wall as a tribute to Mr. Buffett and we may add a Google “B” share whenever they come out. Believe it or not, you can still get a stock certificate for many of the well-known companies and we like to collect one or two every year. The artwork for some of America’s companies on a stock certificate is our way of collecting “art”. (Go to OneShare.com to get a complete list.)
With the adaption of eBooks and an all digital world, there will come a day when the “stock certificate” will disappear so we thought we would collect some history before they too become extinct.
As far as the market, the bears have taken control of the session and will likely when the week.
The Dow is down 68 points to 12,918 while the S&P is off by 11 points to 1,376. The Nasdaq is lower by 34 points to 3,021.
We have a lot to cover in our Members Area as we are closing another winning trade which will make our 7th of the week and we are lowering our Hard Stop on another position that is profitable. Subscribers, please pay careful attention to the trade instructions.
We will be back Sunday night with our Weekly Wrap and the chart work for each of our open positions. Until then, have a great weekend, everyone!
Tags: Berkshire Hataway stock, BRK-A, class a stock, GOOG stock split, Google earnings, Google stock split
Posted in Earnings, Google, Market Analysis, Market Commentary | Comments Off