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Posts Tagged ‘AA earnings’

Family Dollar (FDO) Misses Estimates / Alcoa (AA) on Deck

Thursday, January 9th, 2014

1:00pm (EST)

We have been mentioning the start of 4Q earnings season is upon us and although the real action doesn’t start until next week, there have been some exciting plays this week.

We cover possible earnings trades each and every week in our Weekly Wrap and from time-to-time some of these trades make it to our Daily as official recommendations.  We list possible call and put trades on the companies reporting and the research can be time consuming as there are a lot of factors to consider.

We often mention a 5%-10% move in a stock can often lead to 100+% returns with the right options.  Stocks often make their biggest moves before, during, and after the announcements and these events happen 4 times a year.  By using technical charts, past earnings announcements and reactions, we often get a good feel on where a stock is headed.

We profiled several trades this week including Sonic (SONC, $19.33, up $0.14) for Monday, Apollo Education Group (APOL, $31.03, up $0.27) and Container Store Group (TCS, $37.25, down $1.76) for Tuesday, and WD-40 (WDFC, $72.46, down $3.09) for Wednesday as they announced this morning.

All of these stocks made tremendous moves after reporting their numbers this week but we didn’t feel comfortable trading them for various reasons.  We had the direction nailed on 3 of the 4 and could have made some loose change but the one trade we profiled that we really liked was Family Dollar Stores (FDO, $61.76, down $4.58).

Shares are down 7% here were our comments Sunday night along with the chart work from the Weekly Wrap (quotes from prior Friday’s close).

Family Dollar Stores (FDO, $66.41, up $0.35)

January 65 puts (FDO130118P00065000, $1.50, down $0.30)

Thoughts:  Earnings have come in higher by 2 cents the past 2 quarters but the prior 2 were misses of a penny and 6 cents.  The current forecast is for Family Dollar to report 69 cents a share on sales of $2.51 billion.  We believe they come up short for the recently ended quarter.

FDO Chart


The company reported earnings of 68 cents a share versus estimates for 69 cents.  Revenue also came in short at $2.5 billion as the suit-and-ties were looking $2.51 billion.  Same-store-sales were down 2.8% for the recently ended quarter.

Shares have traded to a low of $60.97 and the decline was enough to power the January 65 puts (FDO130118P00065000, $3.40, up $2.15) to a 172% return.

The other trade we profiled for today was Alcoa (AA, $10.55, down $0.28) and here is what we said in our Weekly Wrap:

Alcoa (AA, $10.57, up $0.04)

January 11 calls (AA140118C00011000, $0.19, up $0.03)

January 10 puts (AA140118P00010000, $0.11, flat)

Thoughts:  Shares have been on a roll since they were booted from the Dow and have moved from $8 to double-digits.  The stock had been mired in a trading range for years but the recent breakout could continue with a strong quarter.

The January 11 calls traded over 1,800 contracts on Friday and the January 10 calls (AA140118C00010000, $0.67, up $0.01) traded nearly 3,200 contracts.  Also of note, the January 10 puts traded over 2,500 contracts on Friday.

If our arm was twisted we would take a shot on the January 11 calls as a possible trade or even the February 11 calls (AA140222C00011000, $0.32, up $0.03) as a “safer” trade as they traded over 4,300 contracts on Friday.

AA Chart


We will likely sit on the sidelines with this one as well because of today’s news the company will settle a bribery charge.  Not the news a company wants Wall Street to hear before they confess their numbers.

Earnings season will carry on from here on out until mid-March before another quiet period.  First quarter earnings start in early April.

The upcoming earnings season is expected to be one of the most important periods in recent years as Wall Street plans for 2014.  We said volatility could get crazy this month and with tomorrow’s Nonfarm Payrolls report on deck, we are getting close to the eye of the storm.

We expected a flat to choppy session and so far that is how the action is playing out as both the bulls and bears have tugged on the rope.  One side could get muddy by the weekend as tomorrow should provide us with some good clues on the next near-term trend.

As we head to press, the Dow is down 18 points to 16,444 while the S&P 500 is lower by a point to 1,836.  The Nasdaq is declining 7 points to 4,158 as the battleground at 4,150 comes back into play.  The Russell 2000 is off 1 point to 1,158 and the S&P Volatility Index ($VIX, 12.88, down 0.01) is down a smidge.

We have another Profit Alert on a trade that is up 54% so let’s go ring the register and take partial profits.  Subscribers, check the Members Area for the updates and stay close to your email inboxes into the close in case we have additional Profit Alerts and/ or New Trades.

Special Note:  If you are NOT a member to the Weekly Wrap or your subscription has expired, get back on the bus!

Bears On a Roll but Futures Showing Higher Open

Monday, April 16th, 2012

9:00am (EST)

“While we should get the pullback we have planned on, we still have to guard for a snap-back rebound because the Fed could be in play again.  Many believe the Fed wasn’t going to act on another round of quantitative easing because the economy was “recovering” but the latest headlines are painting a different picture.

The important clues to watch for will be the major support levels we have just covered.  If they hold, and the Fed does do something, then the pullback could be mild.  If the bears gather enough momentum and crack several layers of support while the Fed sits idle, then we will be on the verge of a trend change.”  (4/8/2012 Weekly Wrap/ Monday Morning Outlook)

The bears had to wait 3 days to slow down the bulls momentum but Monday’s open was worth it for those who are short the market like us.  The major indexes opened to a sea of red and spent all session trying to hold down the second wave of support.  The first wave was cracked during the prior week which our chart work showed but the bulls were able to hold off the onslaught just long enough to be saved by the closing bell.  Although the market finished slightly off their lows and above our near-term support targets for the session, Tech didn’t as the Nasdaq closed below 3,050.

Tuesday’s session was a follow thru as the bears were able to push the second wave of support and then some as the Dow closed below 12,800 while the S&P tested 1,350.  The major indexes were on the verge of totally collapsing as each was down 3%-4% for the month following the 2% pullback.

The talking heads were thanking Alcoa (AA, $9.85, down $0.32) for better-than-expected earnings following their report after Tuesday’s close as the market made an expected bounce on Wednesday.  Alcoa’s surprise was nice but it wasn’t the catalyst for the rally, it was a simple bounce off support.  We closed 6 winning puts trades in the morning as we figured a test to resistance, which was prior support, was coming. 

Typically, after a break of a strong uptrend, a stock or the market will go back and test the rising channel that had been broken.  These types of patterns are known as bear flags or dead cat bounces so we knew there could a continuation on Thursday as the bulls made up less than half of Tuesday’s losses.

Futures were pointing towards a huge open on Thursday before the unemployment figures were released but were hammered after Initial Claims rose by 13,000.  It didn’t matter though as the market soared and reclaimed some support following a 1+% gain across the board.  The rally lasted throughout the day as Wall Street eagerly awaited Google’s (GOOG, $624.60, down $26.41) quarterly results and the hope of a better-than expected China GDP (Gross Domestic Product) number which was expected to come in at 8.4%.  There was Wall Street water cooler talk that China’s GDP number could come in at 9% or better.           

Well, one-out-of-two came true as Google beat estimates (but missed on revenue by a smidge) while China disappointed as GDP came in at 8.1%, down from 8.9%.  Futures were down heavy before Friday’s opening bell which was exactly what we wanted to see as we have been loading up on put options over the past few weeks.

Bears Going for 5th Straight Session Win

Tuesday, April 10th, 2012

12:15pm (EST)

The bulls made a slight push higher at the open but the gains were marginal before the major indexes turned negative.  The Nasdaq and the S&P tried to get the Dow going but the blue-chips are rapidly approaching a triple-digit loss as we head into the second half of trading.

Economic news has been light with Wholesale Inventories showing an increase of 0.9% for the month of February.  Wall Street was looking for an increase of 0.5%.

Some of the uneasiness can be blamed on 1Q earnings season which unofficially begins today after the closing bell.  Analysts have been saying for weeks that most companies will report lousy numbers and there have been a few pre-announcements by some companies who will miss the bar.

Alcoa (AA, $9.38, down $0.21) still has the honor of unofficially kicking things off and will announce their numbers minutes after the sessions ends with a conference call scheduled for 5:00pm (EST).  Wall Street has penciled a loss of 4 cents a share on revenue of $5.8 billion, on average.  The is a chance for a surprise as the range calls for a loss as high as 12 cents a share versus a profit of 7 cents a share. 

Last time out the company posted mixed results as they missed their earnings per share number but beat revenue estimates.  Shares have been range bound for 2012, trading in the $9-$10 area and the 52-week low is $8.45.  Alcoa is down nearly 50% from a 52-week high of $17.96 and some will argue much of the bad news has been priced into the stock.  However, if the company comes in with a wider-than-expected loss, shares could test 52-week lows.

We will be watching Alcoa’s numbers but we are more interested in Google’s (GOOG, $632.62, up $1.78) report which is due out after Wednesday’s close, and, JPMorgan Chase (JPM, $43.11, down $0.78) which will confess Friday morning.

As we hit the turn, the Dow is down 131 points to 12,798 (Bingo!) while the S&P is lower by 17 points to 1,365.  The Nasdaq down 42 points to 3,005.  While it may be hard for our non subscribers to believe we are rooting for a continued decline, our subscribers know the deal.  We loaded up on put options and all of them are doing super swell today.

We are taking profits on another triple-digit winner that is up 136% so pay attention to the trade instructions.  Subscribers, check the Members Area for the details.  

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    The portfolios can be found in the Members Area as well as past portfolios from 2008-2011. Overall, we are 621-273 on nearly 900 real-time recommendations that equals a success rate of 70%. This means, on average, 7-out-of-10 of our option trade recommendations make you money and we hope to have an even better success rate for 2013.

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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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