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S&P 500 Triggers Fresh High/ VIX Dips Below 13.50/ New Trade!!!

Tuesday, April 1st, 2014

1:10pm (EST

The bulls are going for the hat trick today as they try to seal the deal on 3-straight winning sessions.  The S&P 500 has hit an all-time intraday peak of 1,884.60, we’re not fooling, and the VIX has dipped below 13.50.

Before we cover the indexes, we wanted to provide a quick update on a trade from our Weekly Wrap earnings section.

Shares of CalMaine Foods (CALM, $62.95, up $0.17) are trading slightly higher again today following Monday’s 9% surge and spike north of $64 on better-than-expected earnings.

The company reported a profit of $1.77 a share on revenue of $395 million.  Wall Street was looking for $1.41 a share on revenue of $360 million.  On the surface, this is a huge beat on the top and bottom lines.  Our research showed this possibility.

Here was the write-up from Sunday night’s Weekly Wrap (quotes from 3/28/14):

“CalMaine Foods (CALM, $57.51, up $0.60)

April 60 calls (CALM140419C00060000, $0.75, up $0.10)

April 55 puts (CALM140419P00055000, $0.65, down $0.10)

Thoughts:  The option chains only trade in $5 increments and this kept us out of a possible trade on Friday along with the bid/ ask widening.

In late December, the company beat estimates by 3 cents and revenue was $25 million above estimates.  Shares were at $60.37 but traded flat the following session, down 14 cents on 12/31/13.  The first day back in 2014, shares fell nearly $3 to close at $57.40 and were below $50 by the end of January.  Shares are right at December levels and there is a chance another move of $10, either way, comes by the end of April.

The 52-week peak is north of $60 and a break above this level will likely lead to some fluff to $65 on a blue-sky breakout.  However, if the company disappoints, shares could easily fall below $55 and test $50.  The late January and early February low was $48.90 and this level would likely be tested if the company totally drops the ball.  A break below the “double bottom” could lead to a further breakdown to the mid to lower $40′s.

The company has beat and tied estimates the past 3 quarters and missed in the prior one before those.  The last two have been a beat by 4 cents, a match, and the two before were wild with a 52-cent beat and 13-cent miss.

There are only 2 suit-and-ties with estimates and they are expecting earnings anywhere from a profit of $1.22 or $1.59 (a share).  Needless to say, the chance for a huge beat or miss will be there.

This could make the headlines although investors won’t know there are only 2 analysts covering a $57 stock.

The cost for both options would have been $1.40-$1.50 on Friday.  We would have needed to get into them on Friday as the company reports before Monday’s open.

The breakeven point is for shares to make a move above $61.50 or a drop below $53.50.  Another worry was that shares will have to make the move in the next 3 weeks.

We can “follow” the trade for education purposes  and if shares trade flat we could look at a trade with May options.” (END)

The April 60 calls (CALM140419C00060000, $3.40, up $0.10) opened at $1.70 on Monday and closed the day 400% higher after ending at $3.30.  They traded to a high of $4.20 and today they have traded to $3.90.

The April 55 puts (CALM140419P00055000, $0.20, down $0.05) folded like a cheap lawn chair as they lost over half their value and have no “bid”.

The losses on the put options, even at 100%, would easily have been offset by the call options and why we suggested a possible strangle option trade.

The aforementioned trade could have been entered for $1.50 ahead of last Friday’s close and would have easily been a triple-digit winner but we hesitated and it cost us.

No worries as we have been building up cash for possible 1Q earnings trades that start next week.  Still, we should have pulled the trigger as we did a lot of research on the trade.  Hopefully, the next one we do will make it easier for any newbies to try a strangle option trade.

As we make the turn, the Dow is up 62 points to 16,520 while the S&P 500 is gaining 8 points to 1,880.  The Nasdaq is advancing 47 points to 4,246 and the Russell 2K is popping a 6-pack to 1,179.  The S&P 500 Volatility Index ($VIX, 13.41, down 0.47).

We have another New Trade today and we have updated our current ones.  Subscribers, hit the Members Area for the updates and stay close to your email inboxes into the close in case we have additional Trade Alerts.


Uh Oh, Watch the Close

Thursday, August 8th, 2013

12:50pm (EST) 

We said this morning today would be an important test for the bulls as the Dow and S&P 500 try to halt a 3-session slide.  The Nasdaq and Russell 2000 are also trying to avoid a 3-day skid and as we head towards the second half of trading the market is up but has been mixed.

The bulls were looking good ahead of the start of trading but the opening pop and drop wasn’t a good technical setup.  The talking heads are pushing the panic button but we have given you specific downside targets to watch and confirm before pulling the trigger on short positions.

We have also given you bullish target that would signal the next leg higher and while today could have some “negative” headline if the bears win again, as long as support holds there is no need to throw the baby out with the bathwater.

We listed several index option trades on our Watch List this morning inside the Members Area to play the market’s next breakout or breakdown.  If you did not write then down or put them on your Watch List then do so now.  All of the call and put options we listed were around a buck ($1) or less and they have the potential for gains of 100+% on the market’s next major move.

These will be the easiest way to play the next major move and if volatility picks up like we believe it will, these option trades could also be perfect setups to use as strangle option trades as.  The returns could have mid to high double-digits but because the positions are hedged, your gains (and losses) would be less compared to a directional trade.  However, if we remain in a trading range, a good possibility, this strategy could also be a double-edge sword.

This is why it is important to be patient and let the market come to you.  Trust us, we are so ready to take a trade today but the mixed action isn’t given us the clues we need.

We have closed some monster trades this week for gains up to 175% so while we can be a little aggressive, we don’t need to push the envelope.  There are also a few earnings trades we are watching for next week and with our index plays, we have plenty of ammo for when we do pull the trigger on new trades.

We are still winding down some of our trades from July and we should be in great position to play the next major move by using September and October options.

As we head to press, the Dow is up 49 points to 15,520 while the S&P 500 is up 7 to 1,698.  The Nasdaq is higher by 20 points to 3,674 and is just a point away from 3,675 while the Russell 2000 is higher by 4 points to 1,048.

Again, get these trades ready in your cue by posting them on your desktop or in your Watch List for your brokerage accounts.  We have updated them again along with our current trades in our midday update so let’s go see how things look.  Subscribers, hit the Members Area.

Bulls Take a Breather

Friday, July 12th, 2013

1:15pm (EST)

The major indexes have traded in a tight range following yesterday’s push to new all-time highs.  There are a number of factors in play that are balancing things out as the Financials are showing a little strength while the Transports have taken a hit.

JPMorgan Chase (JPM, $55.30, up $0.16) and Wells Fargo (WFC, $42.70, up $0.90) knocked the cover off the ball with their earnings reports while United Parcel Service (UPS, $86.05, down $5.40) warned Wall Street they won’t make their numbers.  Shares of JP and Wells are up moderately higher while UPS is getting slammed for trying to sneak in a miss.

The big difference we are seeing from this week’s push to new highs and the one in May is that the current rally appears that it could stick around for another week or two.  The surge to new highs in May was met with a quick reversal.  With the major indexes at and near all-time highs they will need to close above their intraday highs from May to continue the momentum.

We aren’t sure if it will happen today but a slightly higher close or a flat ending to the week should be bullish through next Friday.  Next Friday is also July option expiration day that will make things interesting along with the huge flow of earnings that will start to pour in.

The Dow is currently down 47 points to 15,413 but if we take out Boeing (BA, $100.00, down $6.88), the Dow would be near even.   The S&P 500 is off by 2 points to 1,672.  The Nasdaq is down 2 points to 3,577 while the Russell 2000 is advancing a point to 1,034.  The small-caps have triggered another all-time that no one seems to be talking about and is a bullish sign for next week.

We have some last minute updates in what has been a very profitable week as we head to the Members Area.  We can’t wait to break down the charts and do some digging for more possible winning trades for next week as we have already taken third and half profits in a few of our current trades.  Along with our current trades, our Watch List has been white-hot as well.

We will be back Sunday night with the Weekly Wrap (now 26-3 for the year and 70-5 since the start of 2011) and the Daily on Monday morning.  We have recommended nearly 100 trades for the Daily so far this year and we are happy to say for those of you that have taken ALL of our trades, you should be up over 100% for 2013.  Overall, we are hitting on nearly a 70% win rate for all of our trades.

Let’s go see where we are at with our current recommendations and if we do not send out a Profit Alert, have a great weekend, and be sure to check out the chart work for next week when the Weekly and Daily come out.

Amazon, Facebook, RIMM Key for Tech

Tuesday, January 29th, 2013

12:30pm (EST)

The bulls are trying to gather momentum for a final push to new all-time highs and their journey will likely depend on the help or hurt that’s (AMZN, $270.69, down $5.35) and Facebook’s (FB, $31.27. down $1.20) earnings provide.

Amazon is on deck after today’s close and Facebook will be announcing their numbers Wednesday.  Amazon carries a rich premium and will need to trounce Wall Street’s numbers while Facebook will have to show strong growth in its mobile division.  We haven’t studied the numbers but we have listed a Facebook option trade on our Watch List.

The trade could do very well depending on Facebook’s numbers and shares will likely move 10% or more one way or another.  The downside is they disappointment the suit-and-ties and shares fall below $30.  For this you would use put options to try to double your money.  If shares make a run at $38 on a beat-and-raise, then call options would be your best bet for a triple-digit win.

We will likely stay on the sidelines but we are afraid if we do, shares could rocket like Netflix (NFLX, $164.23, up $2.12) did last week.  The earnings trade we profiled was one of the biggest returns we have ever seen (4,000+%) and it showed how a 40 cent option went to over $14 and then $30,  Amazing.

Facebook doesn’t have the power to move $100 after earnings but a $5-$10 move is not out of the question.

Research in Motion (RIMM, $15.08, down $1.11) will introduce its new Blackberry 10 model at 10am (EST) on Wednesday and the Fed will give a statement in the afternoon.  Tomorrow is lining up to be a big day for news and nonfarm payroll are due out Friday morning.

Hold on tight because we might get white knuckles going into the weekend and the start of February.  We love thrill rides and this market is setting up to take us on a wild trip.

We have a lot to cover with today’s trades so let’s get on it.  As we head to press, the Dow is up 57 points to 13,939 while the S&P 500 is higher by 5 points to 1,505.  The Nasdaq is down 5 points to 3,149.

We have a NEW TRADE and we are closing half positions on another trade that is up 23%.  Subscribers, check the Members Area for the updates.

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Trader Comments:
    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. REGINA L.

    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. STEVE T.

    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. SCOTT H.

    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 PETER G.

    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. LAWRENCE O.

    Loving this subscription so far! I got into the BRK feb 76 calls the day you talked about right before the 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 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! C.J.

    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! SHAUN

    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. MICHAEL K.

    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!
    PARAG P.

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

    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. MIKE

    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. TRISH D.

    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! MIN L.

    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! JOE G.

    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. GREG F.

    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. NOEL

    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. TODD F.

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

    “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. :) ” NOEL

    “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.” CHRISTIAN

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

    “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.” CHARLES M.

    “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.” BRYAN C.

    “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.” JOHN H.

    “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.” JEFFREY

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

    “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.” GREG

    “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.” KEN

    “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.” GARETT

    “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.” TERENCE

    Jan. 31 2012
    Rick, new member...Studied all current trades, did some chart work,picked ZNGA, PEP, MGM...Sold on Feb. 2 for $3600.00 profit...Cost for 1-year membership to your newsletter was less than $1000.00..All I have to say..Thank you. John H –

    Rick, I purchased 10 contracts of the Nike March 85 puts Thursday afternoon for $2.00. Thing is, I was upset because the puts went down to $1.60 or so before the market closed. Well, needless to say Nike didn’t impress Wall Street and when I turned on the computer this morning the puts were worth $7.10! Sold them for a $5,100 profit!. Thanks again, you are the MAN. Chuck J-

    Hi Rick,

    I will start off with a thank you for your time and dedication to all
    the research you and your team commit yourself to. This is not me just being excited about the profits I have accumulated aka (bank) ! You have helped me get back to the passion I had of researching stocks/options. Keith N-

    Hi Rick,

    I want to share my great results on GMCR. Based on your comments on February 15th, I bought 20 options at $0.28. They closed today at $7.00, which is a 2,300% gain. My $560 dollars turned into $14,000 in less than a month. In decades of trading, this is my single best trade ever. Thank you! By the way, the Dow was down 228 points today and I could care less. What a great trade. It proves the amazing power of options. I am so grateful for your service, which calls it straight all the time, your options trading manual, and most of all, your amazing skill
    at finding winning trades. I have attached a copy of the trade from
    my brokerage screen.

    Hi Rick,

    Wow!! my account it up 70% since i joined last month and market is going the opposite direction. Really appreciate your service. I just wanted to drop a note to say THANK YOU. Hope to be with you guys for a very long time. Mel


    Great call on Fosl I bought the may 120 puts for 3.70 yesterday morning just sold for $32.00 today
    Keep up the great work
    Thank you, Henri

    Rick –

    I bought 10 Deckers Outdoor (DECK) May 55 puts at $0.50 on 4/26/12 and sold them on 4/27/12 for $1.65. I made $1150 in one day. Thanks. I knew something good would happen sooner or later.
    HOW THE HECK did you know Green Mountain Coffee (GMCR) was going to go down 20 points???!!!! I bought 10 of the May 35 puts at $0.49 and then 5 more at .30. I sold them at 5.80. Thank you again.
    You have made a believer out of me. Alan

    Rick –
    I have only been a member for about 6 weeks but I have done well on most of the trades. My first two were QQQ and SPY a month ago and since then I've gotten into the groove and been doing well.
    I try to execute the trades that you recommend as soon as you send them out, sometimes I can't and I miss the Entry price. However, sometimes when I miss the Entry, the price goes down and I get a better price.
    That's exactly what happened with GMCR.
    You recommended it at around $.81 I think, but by the time I got to it, the price was $.27. I bought 100 Puts on Wednesday May 2, 2012 and sold half of them 24 hours later at $5.95 for a nice 2,203% gain. As per your recommendation, as GMCR went above $30 I sold the remaining 50 Puts at $5.50 for a slightly less 2,037% gain.
    On average that one trade netted me a 2,120% gain, entirely based on YOUR recommendation (and a little bit of luck). To put this in real terms, I risked $2,700 on Wednesday and pocketed $54,550 just 24 hours later.
    So uhh, let's do that again real soon!!
    Feel free to use my name. The tax guys have me on speed-dial already anyway. Dennis

    That was awesome on your GMCR pick, I know how risky it can been holding into earnings but you pulled it off. 
    I just started my autotrading with you today and am in on your QQQ play. I look forward this service. 
    I have a busy career and I have tried to follow and trade throughout the day and found it too hard. I hope you continue to have a great year, I plan to go along for the ride. I am starting slow but will pile more in once I have secured some profits. 
    Keep up the good work your trading has been spot on. I am sure you paid your dues to get this point in your career. Anthony


    Great call on GMCR!  I have been trading for about 15 years actively.  This may be the best trade I ever made.  Got in on Monday, April 30 and the stock was up from when you recommended it.  It went up further after I got in.  Here are the facts:
    Monday, April 30th: Bought 15 June 37's at $1.25= $1900 approx
    Thursday, May 3rd: Sold 15 June 37's at $9.30=$13,950
    Gain for the week: $12,050.
    I understand you will not get them all right.  It’s important to ride those winners and as you could tell from my selling price, I sold when the stock went to $28.10, so left a little on the table.  Who can complain.
    Keep the suggestions coming, looking for another jump on your FSLR, one that I have been riding very hard.
    Best regards, Bob

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