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Tuesday, January 10th, 2012
9:00am (EST)
The bears tried their best to keep the bulls underwater but the market continued to bounce off its lows into the second half of trading to finish in positive territory on Monday. Sentiment improved once the European markets closed and we face a few obstacles this week with some of their debt offerings but the market got off to a good start with Wall Street clearly focused on 4Q earnings.
The Dow added 33 points to close at 12,392 but reached a high of 12,409 which was all we were looking for after the open. The S&P 500 gained 3 points to end at 1,280 and kissed 1,282 on the cheek while the Nasdaq chipped-in with a 2 point pop to finish at 2,676.
We had some sweet pin action yesterday with a few of our trades and we have been giving you some nice option tips to start 2012 to get you on board. There are a lot of traders waiting for a pullback because we told you many of them took the last 2 weeks off in December and now they are trying to play catch up.
The Nasdaq jumped 43 points on the first day back to close at 2,648 and we said if Tech got over 2,650 things could get exciting. The close above 2,675 means the suit-and-ties and professional money managers have already missed 3% to the upside and could be chasing if the index breaks 2,700.
Alcoa (AA, $9.43, up $0.27) said some good things last night after the bell despite posting a loss for the quarter – its first in nearly a year – on lower aluminum prices. The company reported red ink of $191 million, or 18 cents a share, versus last year’s profit of $258 million, or 24 cents a share. Aluminum prices were down 12% in the fourth-quarter and nearly 30% from its April 2011 peak which hurt Alcoa to some degree.
The devil-in-the-details is that Alcoa took a one-time charge of nearly $160 million to shut-down some of its smelting operations which will help the bottom line over the long-haul. Otherwise, Alcoa would have checked in with a loss of 3 cents a share. Analysts had forecast a loss of 2 pennies a share.
The company did beat on revenue estimates, $6 billion versus a forecast for $5.7 billion, which was the best part. Alcoa also said global demand should grow by 7% this year which was ahead of the 6.5% that had been projected. In early action, shares are up 32 cents to $9.75.
Futures are showing a BIG open and look like this: Dow (+119), S&P (+14), Nasdaq (+24).
We will likely have another busy morning so stay on your toes for possible Profit Alerts or New Trades if our targets are hit or we see something else we like.
Subscribers, check the Members Area for the updates.
Tags: AA, Alcoa Earnings, Nasdaq, option tips
Posted in Earnings, Market Analysis | Comments Off
Tuesday, July 12th, 2011
12:40pm (EST)
The bulls were struggling to keep losses in check this morning but have gathered some momentum heading into the second half of trading as they try to make up for lost ground over the past few sessions. There has been strong support at the 50-day moving averages for the major indexes and these levels appear to be holding at the moment.
Economic news has been light with the U.S Trade Balance coming in at $50 billion versus estimates for a deficit of $44 billion. The surge in the trade deficit can be blamed on higher oil imports (and prices) but comes as no surprise. Although this number should improve in the coming months, chalk it up as a disappointment.
Later today, the FOMC’s minutes could provide a catalyst for either the bull or bears, depending on the wording, and will be released at 2pm (right coast time).
Turning to earnings, Fastenal (FAST, $34.92, down $1.08) is trading lower despite beating Wall Street’s expectations. The company reported earnings of $94 million, or $0.32 a share, on revenue of $702 million. The suit-and-ties were expecting profits of $0.30 a share on revenue of $688 million.
After Monday’s close, Fastenal announced a quarterly cash dividend of $0.13 a share and is on track to pay $0.51 a share for 2011 giving the stock a 1.4% yield based on current prices.
We listed Fastenal as a possible earnings trade in our Weekly Wrap but the company had missed in four of the last eight quarter so we weren’t sure on the direction. We did a big write-up on the company in our July 4 issue and said shares could fall to $34 which is where we would consider it a “Buy” as far as a quick trade. However, we still don’t like the options on the stock with resistance at $38.
As we head to press, the Dow is up 10 points to 12,516 while the S&P is higher by a point to 1,320. The Nasdaq is trying to join the party but is 9 steps back at 2,793.
It is still a coin toss on if the market remains in a trading range or breaks to new highs (or new lows). The Dow futures were down triple-digits this morning but turned on a dime on less-than-stellar headlines. Perhaps the market is thinking the same thing we are thinking which we talk more about in our Members Area.
Subscribers, check for the updates.
Tags: AA, Alcoa, binary options, call options, FAST, FAstenal earnings, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Company Commentary, Earnings, Market Analysis | Comments Off
Tuesday, May 10th, 2011
9:00am (EST)
The bulls passed a key test on Friday and Monday as they got wins on both days following yesterday’s pop. The market was flat for much of the morning session although commodities were rebounding following last week’s selloff. Oil, gold and silver all traded higher despite an early rally in the dollar which eventually closed lower for the day. There was a little activity in the M&A sector and Energy stocks were strong which provided enough leadership to keep the bears at bay.
Oil fell below $100 last week but rallied over 5% to close at $102.50 a barrel. Meanwhile, gas prices have hit $4 a gallon, on average in the U.S., and are approaching levels from a few years ago.
Gold had dropped below $1,500 last Friday but finished above this level at $1,503 an ounce. Silver surged 5% to close over $37 an ounce.
Nvidia (NVDA, $19.75, up $0.43) reached into its coffers and flashed $367 million in front of privately held Icera’s face to get a deal done. It was a great acquisition for the company as they may a bigger push into the 3G and 4G mobile market. The deal is expected to close within a month and should start to payoff in the back half of 2012.
Despite the lack of economic news and major earnings announcements, the Dow drifted higher to finish with a gain of 46 points to 12,684. The index traded to a high of 12,722 with Alcoa (AA, $17.53, up $0.38) leading the way with a 2% pop.
The S&P 500 added 6 points and closed at 1,346 but ran into the 1,350 roadblock once again. The index reached an intraday high of 1,349.44 and was just enough to keep the technical picture blurry for another day. We mentioned 1,350 as a key battle ground for the push back towards 1,375-1,400 or the breakdown to 1,325-1,300.
The Nasdaq managed a 15 point advance and settled at 2,843. We mentioned in our Monday morning update to watch for 2,850 which is exactly where the bulls backed off. Tech has shown some signs of breaking out but the bulls are having trouble with this area on their push to 3,000.
In M&A news this morning, Microsoft (MSFT, $25.83, down $0.04) has made a pitch to buy Skype for $8.5 billion in cash. It is the largest deal ever for Microsoft in its attempt to keep up with Apple and Google but we think they overpaid.
eBay (EBAY, $33.12, up $0.40) paid $2.6 billion for Skype back in 2005 and sold a majority of its stake for $1.9 billion in cash in a leveraged buyout. However, the company still owns 30% of Skype which it listed on its books for $620 million. With Microsoft’s bid, that stake has just ballooned to $2 billion which is pushing shares of eBay near its 52-week highs this morning.
Futures are pointing towards a strong start this morning. Dow futures are higher by 45 points; S&P futures are up 6 points; Nasdaq futures are up a dozen. Subscribers, check the Members Area for the trade updates.
Tags: AA, call options, eBay, high beta stocks, Hot stocks, momentum options, Momentum stocks, MSFT, NASDAQ: EBAY, NVDA, NYSE: AA, option tips, options trading course, Skype, stock market options, strangle option trades, weekly options
Posted in Hot Stocks, Market Commentary, Mergers and Acquisitions | Comments Off
Tuesday, April 12th, 2011
9:05am (EST)
Monday’s action followed last week’s script where the bulls started the session pushing resistance only to fade by the end of the day. The bears have slowly chipped away at support and yesterday’s action favored their camp, but they too, are lacking momentum despite having the headlines in their favor.
There was nervousness and excitement ahead of the start of earnings season as trading was choppy on reports Japan would have to raise their nuclear warning and on news that the International Monetary Fund (IMF) cut their estimates for U.S. economic growth.
The IMF waited until gas was nearly $4 a gallon but said that higher gas prices could slow the pace of the U.S. economy. Wall Street has been worried about the effects of higher oil and food costs on corporate profits so we expected to see a “sell the news” event once word got out.
The Dow did manage a 1 point gain to settle at 12,381 but traded to a high of 12,444. The blue-chips touched a low of 12,352 which has been solid support but a break below this level could lead to a test back down to 12,200-12,000 for the bears. Near-term resistance has been hard to clear at 12,500-12,600 for the bulls.
The S&P 500 slipped 4 points and closed at 1,324 which was slightly below our 1,325 downside target. There could be further weakness down to 1,300 while the bulls focus on getting back to 1,334 and above.
The Nasdaq fell 9 points to finish at 2,771 after falling to 2,760 in late day trading. Tech held 2,750 but we will be watching this level going forward. There is further risk down to 2,650 if broken while 2,800 remains near-term resistance.
Yesterday’s technical breakdown pushed both the S&P and Nasdaq below their respective 10-day moving averages. This was the first time since mid-March that both indexes failed their 10-day MA’s and bears watching.
Of course, the big news after the bell was Alcoa’s (AA, $17.77, down $0.15) first-quarter earnings which came in mixed. After an initial pop to $18-and change in after-hours trading, shares fell 3% after the company reported sales that came in below expectations.
The company earned $308 million, or $0.28 a share, versus a loss of $201 million, or $0.20 a share in the year ago quarter. Revenue rose over 20%, to $5.96 billion from $4.89 billion, helped by a 7% pop in aluminum prices.
Analysts were expecting profits of $0.27 a share on revenue of $6.08 billion.
Shares of Alcoa are trading at $16.98 in pre-market action, down 79 cents, or 4%.
As far as futures, they are pointing towards a lower open; Dow (-51) S&P 500 (-7), Nasdaq 100 (-10). Subscribers, check the Members Area for the updates.
Tags: AA, Alcoa's earnings, call option trades, chicken trades, momentum options, Momentum stocks, options trading course, put options, stock market options, stocks that trade weekly options, strangle option trades, weekly options
Posted in Earnings, Market Analysis | Comments Off
Friday, April 1st, 2011
1:35pm (EST)
Lots of good happenings today, folks.
We had a little trouble sleeping last night in anticipation of this morning’s nonfarm payrolls numbers. Futures were up overnight by about 0.2% and we had a pretty good feeling this morning that the bulls would push the tippy-top of resistance. The headlines for today’s unemployment report will be debated but we could care less. All we care about is price action and we said to stay long and strong.
The Dow is up 77 points to 12,396 and has kissed 12,416. The February and 52-week high is 12,423.
The S&P is higher by 9 points 1,335 while the Nasdaq is showing a 16 point pop and is at 2,797 but has touched 2,802.
The rally up to resistance is a strong indication the bulls will probably push our next set of targets for the market and we will go over them this weekend. We will also be doing a video for our course members who have purchased our trading manual, How to Trade Options on Momentum Stocks, either this weekend or next.
For those of you who have been in our “mentoring” program, these videos are designed to help you find your own option trades and to understand where the market could be headed over the short and long-term. We also cover possible trades, different option strategies and some chart work.
The start of 1Q earnings season is just around the corner and it is one of the best times to look for trades. Each week in our Weekly Wrap we highlight the companies that we think will move 5%-10% and we show you how to find call or put option trades to take advantage of the possible price swings in our videos.
Alcoa (AA, $17.57, down $0.09) will announce earnings on April 11 which ”officially” starts the season so we have all of next week to start getting ready for our trade setups. We currently have Alcoa on our Watch List as we feel shares could push $19-$20 on a good announcement.
The cost of our trading manual and video courses have been low because we wanted to give everyone the opportunity to get the options manual at an incredible price and for those of you who have supported us through the years. This weekend, the price is going up and we won’t be offering anymore deals as we start to promote the course more aggressively.
Currently, you can get our option course at no charge (shipping included) if you subscribe to a 1-year membership to our Weekly or Daily newsletter. Again, this will be our last weekend offering this promotion.
We are also going to cover WEEKLY options in our next video. We recommended our first trade with these types of options on Monday. We recommended the Potash (POT, $60.77, up $1.84) April 60 calls (POT110401C00060000, $0.71, up $0.50) at 33 cents and closed the trade yesterday for a small profit.
We were a little nervous that the $60 level would be tough to crack so we decided to get out of the trade and try again next week. As you can see, these options are up over 200% today and had traded down to 10 cents on Wednesday. Today they have traded up to 94 cents.
The reason we went with this trade and closed it yesterday is because it was part of our PLAN. Before we got into the trade we said to ourselves it would be a play on Mosaic’s (MOS, $81.13, up $2.38) earnings (which blew away Wall Street’s estimates yesterday). We thought Potash would easily break $60 if Mosaic popped 5%-10% but they didn’t. We also knew if Mosaic would have moved this much, Potash would have followed and we would have been out of the trade before Friday and the jobs report.
In any event, we blew it, to a degree, because we closed the trade a day early but the more important thing is that we followed our plan. However, there are over 50 stocks that trade Weekly options and we will cover that list in our video. You can bet we will hit a big trade like this one, soon.
We have a lot to cover in our Members Area, including a NEW TRADE, so we have to roll but we wanted to make you aware of our offer. We will be back Sunday night with the Weekly Wrap which has become a big hit with covered call investors. These trades are designed to make 5%-10% every month or two which adds up over a year.
Have a good weekend everyone and we expect the rally to continue into next week with new highs on the horizon.
Tags: AA, Alcoa Earnings, MOS, Mosaic, NYSE: AA, POT, Potash
Posted in Option Trades, Weekly Wrap | Comments Off
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Fastenal (FAST) Falls Back, FOMC Minutes Due
Tuesday, July 12th, 2011
12:40pm (EST)
The bulls were struggling to keep losses in check this morning but have gathered some momentum heading into the second half of trading as they try to make up for lost ground over the past few sessions. There has been strong support at the 50-day moving averages for the major indexes and these levels appear to be holding at the moment.
Economic news has been light with the U.S Trade Balance coming in at $50 billion versus estimates for a deficit of $44 billion. The surge in the trade deficit can be blamed on higher oil imports (and prices) but comes as no surprise. Although this number should improve in the coming months, chalk it up as a disappointment.
Later today, the FOMC’s minutes could provide a catalyst for either the bull or bears, depending on the wording, and will be released at 2pm (right coast time).
Turning to earnings, Fastenal (FAST, $34.92, down $1.08) is trading lower despite beating Wall Street’s expectations. The company reported earnings of $94 million, or $0.32 a share, on revenue of $702 million. The suit-and-ties were expecting profits of $0.30 a share on revenue of $688 million.
After Monday’s close, Fastenal announced a quarterly cash dividend of $0.13 a share and is on track to pay $0.51 a share for 2011 giving the stock a 1.4% yield based on current prices.
We listed Fastenal as a possible earnings trade in our Weekly Wrap but the company had missed in four of the last eight quarter so we weren’t sure on the direction. We did a big write-up on the company in our July 4 issue and said shares could fall to $34 which is where we would consider it a “Buy” as far as a quick trade. However, we still don’t like the options on the stock with resistance at $38.
As we head to press, the Dow is up 10 points to 12,516 while the S&P is higher by a point to 1,320. The Nasdaq is trying to join the party but is 9 steps back at 2,793.
It is still a coin toss on if the market remains in a trading range or breaks to new highs (or new lows). The Dow futures were down triple-digits this morning but turned on a dime on less-than-stellar headlines. Perhaps the market is thinking the same thing we are thinking which we talk more about in our Members Area.
Subscribers, check for the updates.
Tags: AA, Alcoa, binary options, call options, FAST, FAstenal earnings, futures options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option market, option tips, options, options mentoring, options trading, options trading course, stock market options, weekly options, what are options
Posted in Company Commentary, Earnings, Market Analysis | Comments Off