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Wednesday, July 27th, 2011
1:10pm (EST)
Despite a choppy market, Initial Public Offerings (IPO’s) are hot this week as we have counted at least a dozen companies making their debut. The biggest name on the docket is Dunkin Brands (DNKN, $28.04, up $9.04) which priced at $19 on Tuesday after the bell and opened for trading this morning.
The parent of Dunkin’ Donuts and Baskin-Robbins ice cream chains had planned to raise in the ballpark of $375 million by offering 22 million shares at a price range of $16 -$18. Obviously, shares priced above this range and are having a successful showing, up nearly 50%.
We talked about the company’s IPO in our Weekly Wrap on Sunday and mentioned there are more than 15,500 Dunkin’ and Baskin-Robbins stores around the world. There are 71 Dunkin’ Donuts stores in China and room to grow. The company has also signed an agreement to open 500 new stores in India over the next 15 years and it is aggressively pushing into Russia and Ukraine.
Dunkin Brands also makes money by franchising the Dunkin Doughnuts model and they have decent operating margins but our feeling is that the coffee stocks could be ripe for a pullback.
We have loved reporting the news on the way up on many names you already know: Starbucks (SBUX, $39.37, down $0.81) which finally hit our $40 price target, Peet’s Coffee & Tea (PEET, $58.04, down $2.18) which has hit out $60 price target, and Green Mountain Coffee Roasters (GMCR, $89.02, down $3.04) which is pushing $100. We have been telling you their story since the stock was in the $30′s.
Of course, these stocks could continue to go parabolic but at some point they could get whacked. The good news is that since we know these companies so well and the charts, we will know exactly the right time to short them, or buy put options.
With that said, one IPO that could slip under the radar is premium tea retailer, Teavana (Proposed Symbol: TEA) which will price after the bell. The company plans to raise roughly $100 million by offering 7 million shares at a price range of $13 to $15.
Teavana offers premium tea products and could do well as investors overlook this name to get into Dunkin Brands. Shares will likely start trading on Thursday.
As far as the market, it has tested our lower-end targets today, which we expected, and we have bounced a little off the lows. The good news is that the charts have been right on calling this market. This has helped keep our emotions in check as the circus in Washington reaches its high wire act.
Although there seems no resolution in sight, the market will turn on a dime, if and when, Congress announces some sort of progress on the debt-limit. We are hopeful something gets done by Friday as the bulls try and hold support.
As we head to press, the Dow is down 114 points to 12,387 while the S&P 500 is down by 18 points to 1,313. The Nasdaq is getting slammed for 50 points and is at 2,790.
We will be back in the morning with our next update but we have 2 NEW TRADES for our Daily publication which we are releasing right now! Subscribers, check for the updates.
Tags: About options trading, DNKN, DNKN IPO, IPO’s, option trading, stock and option, stock exchange, stock to buy, stock trading, trade online, trading futures, trading online, trading system, what are stock options, what is a call, what is option trading
Posted in IPOs, Market Commentary | Comments Off
Friday, June 17th, 2011
12:20pm (EST)
After 6-staright weeks of losses, the bulls are trying to end that streak which depends on today’s rally holding. Futures were pointing towards a so-so open but
The Dow started the week at 11,951 and is currently up 83 points to 12,044. If the bulls can hold 12,000 and win the week then next week is a toss-up in what has been a down week, historically, over the past two decades. More on this in a minute…
The S&P 500 is higher by 9 points to 1,276 after starting the week at 1,270. The bears will try to keep the index below 1,275 as the bulls look to make a push back to 1,300.
The Nasdaq is showing a 8 point pop and is at 2,631. Tech started the week at 2,643 and has reached a high of 2,648 but if 2,650 is not broken, and held, then it favors the bears next week.
In IPO news, Bankrate (RATE, $14.50, down $0.50) made its debut this morning by ringing the opening bell and offering shares to the public. The company priced its offering at $15 last night which was the mid-point of the expected range but shares are down 3% on their first day of trading.
Ringing the bell hasn’t been too kind to companies trying to make a big splash this week. Pandora Media (P, $12.87, down $0.39) is still sinking after hitting a high of $26 on Wednesday in its debut. LinkedIn (LNKD, $67.06, down $1.21) is down 45% on its 1-month anniversary after hitting a high of $122.70 on its first trading day.
With all options for the month of June expiring today, we wanted to go over next week’s landscape real quick.
The week after June Quadruple Witching has produced an average loss of over 1%, on average, for the Dow over the past 11 years and 18 of the last 20 years. In other words, there is a 90% chance the market corrects further next week but nothing is a given.
As you can see, Tech is still struggling and the Financial stocks face further downside risk. However, the bulls have been known to climb a wall of worry and we are still in a “trading range” which means anything can happen.
The market is up today on hopes Greece gets a bailout and Monday will be a big day as we should get more news on the embattled country.
On the good news department, Research In Motion (RIMM, $27.42, down $7.91) continues to get spanked behind the woodshed as shares are now down over 20%. The plunge has meant a windfall for our current put option recommendation. Our subscribers are working on a 300% return…
That is all we have for today and we hate to see the week end as we are now holding 4 triple-digit winners in our portfolio. We have been making some sweet calls lately and we have been saying NOW is a great time to be putting some money to work. For those who want to take your trading to the next level, come join us.
Also, our Weekly Wrap which will be closing out another profitable trade today. Folks, this publication is quickly becoming a hit and it is hands down a bargain. If you haven’t given it a try, you should, as it is packed with trading ideas. We profile two stocks a week that could be on the verge of big moves as we do an in-depth technical and fundamental analysis of the companies we profile.
For those of you looking for a deal, if you purchase a 1-year subscription to our Weekly Wrap, we will ship you a copy of our options trading manual, How to Trade Options on Momentum Stocks, at no charge (an $895 value). The course also comes with monthly (bi-monthly videos) which show you how to find you own triple-digit winning option trades.
And one last fun factoid before we go, Krispy Kreme Doughnuts (KKD, $9.39, up $0.60) is at fresh 52-weeks highs. Imagine that. We did.
We will be back Sunday night and until then, relax, get some sun, and have a great weekend! We hope you take advantage of our offer.
Tags: call options, futures options, high beta stocks, Hot stocks, initial public offerings, IPO’s, LNKD, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading course, P, Pandora IPO, RATE, Research In Motion earnings miss, RIMM, stock market options, weekly options, what are options
Posted in IPOs, Market Commentary, Strategies | Comments Off
Wednesday, June 15th, 2011
12:30pm (EST)
After a big surge past resistance yesterday, the market is now testing support as the bears are trying to hold yesterday’s gains to a 1-day rally. The bulls were behind the 8-ball early as futures were weak for much of last night and into this morning. Of course, they got worse after hearing this morning’s lousy economic numbers.
The Empire Manufacturing Survey for June came in negative,-7.8 for June, versus expectations for a print of 10.0. Last month, the report came in at 11.9. The Consumer Price index (CPI) for May increased by 0.2%, which was actually higher than the 0.1% pop that was penciled-in. Core CPI increased by 0.3%, versus expectations for a 0.1% increase. Not bad, but not great either.
In IPO (initial public offering) news, Pandora Media (P, $220.13, up $4.13) made its New York Stock Exchange (NYSE) debut this morning by ringing the opening bell. The company priced 14.7 million shares last night at $16 which raised $235 million.
If we break it down even further, the offering raised about $96 million for the company, while current investors cashed in for $139 million by selling a total of 8.7 million shares.
Demand was strong for a company that is not profitable as shares reached a high of $26 shortly after the open. The IPO price was raised a few times as earlier this month Pandora projected its offering would sell for $7 to $9 a share. Then the range was upped to $10 to $12 a share at the end of last week.
Now that it’s official, Wall Street is giving Pandora a market value of $2.5 billion. That’s a steep price for a company that has lost, oh…$100 million over the last decade? On the other hand, Pandora has nearly 100 million registered users who spend a ton of time listening to music so the advertising revenue is there. Had shares came out at $7-$9 then maybe we would have seen value but not at these levels.
As far as the indexes, the Dow is back below 12,000 as it is currently down 155 points to 11,920. This will likely be the key battle ground going into the close and is a nice round number ahead of tomorrow’s jobs report.
The S&P is off by 19 points to 1,268 which is nearly halfway between the 1,300 resistance level and 1,250 support area. The Nasdaq is showing a decline of 36 points to 2,642 and is dancing around our 2,650 target. The bulls will look for a break above 2,675-2,700 while the bears eye 2,600-2,550.
We mentioned Thursday will be another big day on Wall Street as the market digests the latest Initial Claims and Continuing Claims numbers an hour before the bell. Housing Starts and Building Permits for May are also due out before the open with the Philly Fed Index for June due out shortly afterwards.
As we look ahead to Friday, expect volatility with June “quadruple witching”. This is an event where stock index futures, stock index options, stock options and single stock futures all expire on the same day. Worse yet, for the last 8 years, the week after has not been pretty for the market.
The bulls are trying, we give them that, but the bears have been resilient in testing the lower levels of support that we outlined on Monday morning. In any event, the rest of the week could be explosive and we wouldn’t be surprised by a massive move to the downside – or upside if the employment numbers come in strong.
We will also get a peak at Research In Motion’s (RIMM, $35.26, down $0.50) numbers on Thursday as they will announce their quarterly results. We have been dead-on with the stock’s recent decline and our latest put option recommendation on RIMM is up 80%. Time to ring the register on half.
Subscribers, check the Members Area for the important trade updates and we will see ya’ in the morning with a fresh update.
Tags: call options, high beta stocks, Hot stocks, momentum options, Momentum stocks, NYSE:P, Pandora Media IPO
Posted in Hot Stocks, IPOs, Market Commentary | Comments Off
Tuesday, May 24th, 2011
1:00pm (EST)
After a decent start, the market has given back all of its gains and is slightly negative for the session. Oil, gold and silver are up; the dollar is weaker while the euro is higher. This has led to mixed emotions with the bulls trying to recover from yesterday’s losses while the bears continue to apply the pressure.
The bulls got some good news from the housing sector as New Home Sales for April increased over 7% to 323,000 units, which was better than the 300,000 units that had been penciled in. KB Home (KBH, $11.43, down $0.01) and PulteGroup (PHM, $7.60, up $0.07) got a little pop on the news but are basically flat for the session. One of these days (or years) these two stocks will be a “Buy” but not until the housing market is on its own two feet.
The Dow is down 11 points to 12,369 after trading to a high of 12,422. We are still looking for the 12,350 level to hold and if the bulls can rally into the close then we should see a continued rebound for the rest of the week.
The S&P is lower by 2 points to 1,315 but has traded to a high of 1,323. We mentioned this morning we were looking for a push back above 1,325 but the bulls will need to hold current levels or risk a test down to 1,300.
The Nasdaq is off by 10 points to 2,749 and just below our downside target of 2,750. A close below this level would not be good, mentally, for the bulls. Tech has traded to a high of 2,767 and will need a run back towards 2,800 to keep the pressure on the bears.
In IPO news, Yandex (YNDX, $35.00, up $10.00) is up 40% after making its debut this morning. The company is Russia’s most popular search engine and, coincidently, the largest U.S. initial public offering in the Internet sector since Google (GOOG, $519.61, up $1.22).
The intense demand for Yandex comes just a week after LinkedIn (LNKD, $88.80, up $0.50) went public. Yandex took in over $1.3 billion in its offering by selling a little over 50 million shares for $25 each. The deal values the overall company at about $8 billion.
Yandex’s could be a company to watch going forward, unlike some of the Chinese Internet companies, because they have a strong business model being driven by online advertising.
Of course, we will wait for the options to come out before we get serious about trading Yandex and we are hearing LinkedIn options will start to trade this week or next. Stay tuned…
Before we go, we wanted to remind everyone we are offering our option trading manual, How to Trade Options on Momentum Stocks, at no charge (a $895 value) if you order a 1-year subscription to either our Weekly Wrap or our Daily publication. The course includes ongoing training videos that covers the markets in present conditions so you will get a feel for direction.
This offer will only last for another week and we plan on doing our next video update this weekend. In it, we will talk about WEEKLY options, covered calls and LEAPs, which are longer-term options. Folks, we also ship the trading manual to your doorstep.
If you are really serious about learning how to trade and use options for your overall investing strategies then this course is for you. It will also make you a better stock trader as you will learn how to read charts to see if shares are in a downtrend or uptrend. You also get a better deal on our Daily by going with the 1-year subscription and we want you as a subscriber for the long haul while you learn. To get more information on our option trading course, please click here.
We will be back in the morning with a full update.
Tags: call options, high beta stocks, Hot stocks, LNKD, momentum options, Momentum stocks, option tips, options, options mentoring, options trading course, stock market options, weekly options, Yandex IPO, YNDX, YNDX IPO
Posted in IPOs, Trading Psychology, Weekly Wrap | Comments Off
Thursday, May 19th, 2011
1:45pm (EST)
The bulls got off to a good start this morning after hearing initial unemployment claims decreased by 29,000 to 409,000 for the week. The news came before the bell and was better than the 420,000 number that had been expected.
The market then came off its highs after hearing Existing Home Sales for April fell nearly 1% to 5 million units. Meanwhile leading economic indicators fell 0.3%, versus expectations for an increase of 0.1%. The Philadelphia Fed’s manufacturing survey was a shocker, coming in at 3.9 and significantly lower than the expected reading of 20.
Despite the mixed economic news, the market is once again pushing its highs for the day.
The Dow is up 44 points to 12,604 while the S&P is higher by 4 points to 1,344. The Nasdaq is showing a 12 point pop and is at 2,827.
Wall Street had a warm welcome for its latest initial public offering (IPO) as LinkedIn (LNKD, $104.00, up $59.00) made its official debut by ringing the opening bell on the New York Stock Exchange this morning. As you can see, the offering was well accepted as shares have nearly doubled in their first few hours of trading as investors are snapping up shares of the online networking company.
Due to strong demand, LinkedIn’s pricing for the IPO was raised to $45 a share following Wednesday’s close which was well above the initial target of $32 to $35 a share. A current prices, LinkedIn has a market value of nearly $10 billion, the highest for a U.S. Internet company since Google (GOOG, $533.41, up $3.60) went public nearly 7 years ago.
Of course, there are no options available on LinkedIn, yet, but this is a name we will be trading down the road. The volatility will likely continue for a few months and when the options list, we will let you know.
Our current trades are getting some nice pops today so let’s get to the action. Subscribers, check the Members Area for the updates.
Tags: call options, high beta stocks, Hot stocks, LinkedIn IPO, LNKD IPO, momentum options, Momentum stocks, NASDAQ:LNDK, option tips, options, options trading course, stock market options, strangle option trades, weekly options
Posted in Hot Stocks, IPOs | Comments Off
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IPO Market Heats Up
Wednesday, July 27th, 2011
1:10pm (EST)
Despite a choppy market, Initial Public Offerings (IPO’s) are hot this week as we have counted at least a dozen companies making their debut. The biggest name on the docket is Dunkin Brands (DNKN, $28.04, up $9.04) which priced at $19 on Tuesday after the bell and opened for trading this morning.
The parent of Dunkin’ Donuts and Baskin-Robbins ice cream chains had planned to raise in the ballpark of $375 million by offering 22 million shares at a price range of $16 -$18. Obviously, shares priced above this range and are having a successful showing, up nearly 50%.
We talked about the company’s IPO in our Weekly Wrap on Sunday and mentioned there are more than 15,500 Dunkin’ and Baskin-Robbins stores around the world. There are 71 Dunkin’ Donuts stores in China and room to grow. The company has also signed an agreement to open 500 new stores in India over the next 15 years and it is aggressively pushing into Russia and Ukraine.
Dunkin Brands also makes money by franchising the Dunkin Doughnuts model and they have decent operating margins but our feeling is that the coffee stocks could be ripe for a pullback.
We have loved reporting the news on the way up on many names you already know: Starbucks (SBUX, $39.37, down $0.81) which finally hit our $40 price target, Peet’s Coffee & Tea (PEET, $58.04, down $2.18) which has hit out $60 price target, and Green Mountain Coffee Roasters (GMCR, $89.02, down $3.04) which is pushing $100. We have been telling you their story since the stock was in the $30′s.
Of course, these stocks could continue to go parabolic but at some point they could get whacked. The good news is that since we know these companies so well and the charts, we will know exactly the right time to short them, or buy put options.
With that said, one IPO that could slip under the radar is premium tea retailer, Teavana (Proposed Symbol: TEA) which will price after the bell. The company plans to raise roughly $100 million by offering 7 million shares at a price range of $13 to $15.
Teavana offers premium tea products and could do well as investors overlook this name to get into Dunkin Brands. Shares will likely start trading on Thursday.
As far as the market, it has tested our lower-end targets today, which we expected, and we have bounced a little off the lows. The good news is that the charts have been right on calling this market. This has helped keep our emotions in check as the circus in Washington reaches its high wire act.
Although there seems no resolution in sight, the market will turn on a dime, if and when, Congress announces some sort of progress on the debt-limit. We are hopeful something gets done by Friday as the bulls try and hold support.
As we head to press, the Dow is down 114 points to 12,387 while the S&P 500 is down by 18 points to 1,313. The Nasdaq is getting slammed for 50 points and is at 2,790.
We will be back in the morning with our next update but we have 2 NEW TRADES for our Daily publication which we are releasing right now! Subscribers, check for the updates.
Tags: About options trading, DNKN, DNKN IPO, IPO’s, option trading, stock and option, stock exchange, stock to buy, stock trading, trade online, trading futures, trading online, trading system, what are stock options, what is a call, what is option trading
Posted in IPOs, Market Commentary | Comments Off