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Friday, February 3rd, 2012
9:00am (EST)
The market finished flat on Thursday ahead of this morning’s unemployment numbers with Tech showing strength while the blue-chips slipped.
The Dow fell 11 points to 12,705 while the S&P added a point to end at 1,325. The Nasdaq added 11 points to finish at 2,859 after kissing a high of 2,868.
Before we get into this morning’s action, we wanted to give you an update on Abercrombie & Fitch (ANF, $40.40, down $6.43) which dropped 14% yesterday. We have been watching this stock for over a decade so we know how it trades and we could fell this big breakdown coming which may not be done. This is one of the beauties of trading options because sometimes you can just feel a trade is going to be good and we have targeted a drop below $40 for 2 weeks.
Shares were downgraded on Monday but shares drifted higher throughout the week and we knew we were getting the perfect setup. In fact, as we have been closing trades this week, we had Abercrombie put options at the TOP of our Watch List. The company was expected to announce earnings next week and we have been telling our subscribers that they could report a terrible quarter.
It wasn’t too hard to figure out when some of our research revealed the company has been slashing prices for months and has been losing market share. Plus, with the warm weather, this pick was a no brainer.
Here were our thoughts with stock and option quotes from the Wednesday’s close:
Abercrombie & Fitch (ANF, $46.83, up $0.89)
February 42 puts (ANF120218P00042000, $0.65, down $0.25)
May 37 puts (ANF120519P00037000, $1.10, down $0.30)
Thoughts: We could be getting close for a nice entry point. The company will announce earnings on February 13 and we think it will be a terrible quarter. In fact, they could pre-warn Wall Street and we may open a position by Friday on ANF with one of these options.
There is a chance for a pop to $50 but a move below $42.50 will be our trigger point. However, we may enter early on a drop below $45. (END)
Needless to say, the put options had a monster day. The February 42 puts (ANF120218P00042000, $2.25, up $1.60) were up a whopping 240% and the May 37 puts (ANF120519P00037000, $2.30, up $1.20) easily gained over 100%.
Abercrombie pre-announced results Thursday and said profits were up 16% for the quarter but U.S. sales were up just 4% due to heavy markdowns. Looking ahead, the retailer said it expects profits of $1.10-$1.15 a share for the current 3 months versus the suit-and-ties expectations for $1.54.
Although we missed another golden opportunity yesterday from a trade on our Watch List, Abercrombie could be headed below $30 so we may get another opportunity to short this name. We will be doing some more chart work over the weekend and we will let you know on Monday how things are looking.
The good news is we do have 2 current 100% winners on the books with half-profits already taken in one of them.
As far as this morning’s action, it looks like a green open and our headline says it all.
Dow futures are up 101 points to 12,767 while the S&P 500 futures are higher by 12 points to 1,334. The Nasdaq futures are showing a 24 point pop and are at 2,515.
Subscribers, check the Members Area for the updates and once again, stay on the lookout for Trade Alerts this morning.
Tags: anf, ANF earnings miss, call options, unemployment rate
Posted in Company Commentary, Earnings, Market Analysis | Comments Off
Tuesday, January 24th, 2012
9:00am (EST)
The market ended mixed on Monday as nervousness over Greece’s debt woes held back the early momentum.
The Dow dropped a 12-pack, or 0.1%, to finish at 12,708. The blue-chips reached a peak of 12,764 shortly after the open and once gain traded up to our 12,750-12,800 targets. The low came in 12,665 while Wall Street was on lunch. The Dow spent the rest of the day trying to get back to even and made another brief trip into positive territory before the close but the bears got the win.
The S&P added a point, or 0.1%, to end at 1,316. The index mirrored the moves of the Dow as it made a high of 1,322 and came with a stone’s throw of tripping our 1,325 target. We said there could be fluff up to 1,350 earlier this month after the S&P took out both 1,275 and 1,300 and there will need to be a major catalyst that gets the bulls above 1,350. The low came in at 1,309 which was comfortably ahead of short-term support at 1,300.
The Nasdaq slipped a little over 2 points, or 0.1%, to settle at 2,784. The index broke through the 2,800 level about 40 minutes after the start of trading and kissed a high of 2,804.99 before finishing just below our target.
We have a lot to cover in our Members Area this morning as we are on the verge of closing 3 more triple-digit winning trades for January! We also have a few options on our Watch List that are thisclose to becoming official recommendations so stay on your toes.
As we head to press, futures look like this: Dow (-61), S&P (-8), Nasdaq (-12).
Tags: anf, COH earnings, PBR
Posted in Earnings, Option Trades | Comments Off
Friday, May 21st, 2010
11:30am (EST)
We thought we would give everyone a sneak peek into our exclusive Members Area as we close one of our trades today. We have been on a roll and we wanted to show you some of the profits our subscribers are making…in real time.
Our CLOSED track record is updated weekly and we will be adding some of our winners (and losers) for everyone to see. We also wanted to take this time to thank all of you who have written us with super comments.
MEMBERS AREA
Abercrombie & Fitch (ANF, $35.98, up $0.48)
June 35 puts (ANF100619P00035000, $1.95, down $0.35)
Entry Price: $1.05 (5/17/10)
Exit Target: $2.00+ (closed half at $1.90 on 5/20/2010)
Return: 86%
Stop Target: $1.50, raise to $2.00 (HARD STOP)
Action: We have closed the other half of this trade as our hard stop has been hit. The average selling price was $1.95 as we closed half at $2.00 and half at $1.90. The puts traded as high as $2.70 but the market has bounced back and we want to lock in some profits before the weekend hits.
We will be back at 1pm with another update.
Tags: Abercrombie & Fitch, anf, option picks, option signals, options alerts, stock options trading
Posted in Trade Update | Comments Off
Wednesday, October 7th, 2009
1:00pm (EST)
The bulls are taking a breather following the 2-day rally that has seen the Dow run-up 250 points. The index hit a high of 9,793 on Tuesday but is currently down 41 points to 9,689. Still, the momentum the bulls are showing points towards Dow 10,000 in the coming weeks.
I’ve mentioned most of the big earnings from this morning and the main one after the bell will be Alcoa (AA, $13.97, up $0.08). The stock has had a pretty good run this week heading into earnings and the option activity is pointing towards more upside.
The October 14 calls (AAJN, $0.63, up $0.02) have traded 14,000 contracts today while the October 14 puts (AAVN, $0.65, down $0.06) have traded only 4,000 contracts.
Wall Street is expecting the company to post a third-quarter loss of 11 cents per share on revenue of $4.5 billion. Last quarter, the company reported its third consecutive quarterly loss, but said some markets may be stabilizing.
In the year-earlier period, Alcoa earned 33 cents per share on revenue of $7.23 billion.
We will leave this trade alone but there is a NEW TRADE today in the Members Area. We were closed out of our Abercrombie & Fitch (ANF, $32.57, up $1.01) trade yesterday for a 27% gain so we have room to add one.
Subscribers, check the Members Area for the NEW TRADE.
Tags: AA, Abercrombie & Fitch, Alcoa, anf, options picks, options trading strategies
Posted in Hot Stocks | Comments Off
Sunday, October 4th, 2009
3:45pm (EST)
Special Note: We are sending today’s Weekly Wrap early. I am away on travel and hope to be back in the office by Monday morning. In case I’m not, this is Monday Morning’s Update. There is a NEW TRADE for Monday morning, Pepsico (PEP, $60.90, up $2.44), that is profiled in the Members Area. Our latest trade, Abercrombie & Fitch (ANF, $30.62, down $1.08) is up 50% in less than a week and we are hoping for the same returns, if not more, for the Pepsico trade. To read the latest update on all of our trades you must be a premium member which gives you full access to our Members Area. Our last closing trade in Nike (NKE, $62.02, down $0.48) netted our subscribers profits of up to 200%….
Market Commentary
It was no bull and all bear last week as the market fell 2% on average. Friday was setting up to be an explosive day as the Dow futures were down over 100 BEFORE the opening bell rang. However, the drop was marginal and although the bulls lost the week, Friday’s battle was a huge victory. The fact that the Dow lost only 20 points is clear indication the bulls aren’t going anywhere.
For the week, the Dow lost 177 points, or 1.8%, and closed at 9,487. The Nasdaq finished the week at 2,048, down 43 points, or 2%. The S&P 500 dropped 19 points, or 1.8%, and settled at 1,025.
The market was hit with a bunch of disappointing economic news and Friday’s unemployment report was suppose to be a canon ball going through paper for the bears. The fact that the bulls held their ground gives further indication there are buyers on the sidelines. It doesn’t matter if the market is overvalued or undervalued, it never does.
The market doesn’t care about our personal wins and losses and although we may be overbought at these levels you can’t deny the action and aggressiveness of the bulls since the March lows. The thing Wall Street forgets to realize is that the market came down from a much higher level as the Dow was standing at 14,000 in 2007…
A 50% drop in the Dow which is where we were in March when the Dow was at 6,500 would mean over a 100% return to get back to the 14,000 level. We certainly know that isn’t going to happen this year but I think it is important for us to remember where we came from. So I don’t buy into that “we have come too far, too fast” spit that we have been hearing. Those same pundits were calling for a “bounce” BEFORE we bottomed at 6,500 because they couldn’t believe the sell-off. Now it’s the opposite.
Third-quarter earnings should give us a better sense of whether companies managed to grow their revenues to produce earnings growth or if we see continued cost-cutting. This helped with 2Q earnings but the same theme might not work this time around.
The bears got a “little taste” of the bulls last week so you know they aren’t going anywhere either. We are still in a volatile, nervous market which means we could get some really big moves in October.
As we head to press, the Dow futures are down 36, S&P 500 futures are off by 6 while the Nasdaq 100 futures are lower by 8. Of course, the overseas markets will affect those numbers and things could change by Monday morning but it appears we could start the week slightly lower.
Subscribers don’t forget to check the Members Area for the latest trade and updates. The update is posted under the Monday, October 5th link.
Earnings
Monday: Mosaic (MOS, $46.18, down $0.25), Robbins & Myers (RBN, $22.60, down $0.41), RPM International (RPM, $18.08, up $0.20) and Team (T, $16.77, down $0.03).
Tuesday: AngioDynamics (ANGO, $13.80, up $0.05), Chattem (CHTT, $64.59, down $0.31), Pepsi Bottling Group (PBG, $37.25, up $0.76) and Yum! Brands (YUM, $33.15, up $0.02).
Wednesday: Acuity Brands (AYI, $30.98, down $0.18), Alcoa (AA, $12.82, down $0.10), Costco Wholesale (COST, $56.47, up $0.78), Family Dollar (FDO, $26.63, down $0.21), Helen of Troy (HELE, $18.83, up $0.13), Monsanto (MON, $74.93, down $0.18), Ruby Tuesday (RT, $7.89, up $0.13) and Wolverine World Wide (WWW, $24.14, down $0.07).
Thursday: International Speedway (ISCA, $27.09, down $0.16), Marriott International (MAR, $25.61, down $0.75) and Pepsico (PEP, $60.90, up $2.44).
Friday: Cantel Medical (CMN, $15.29, up $0.15) and Infosys Technologies (INFY, $47.85, up $0.60).
Rick@MomentumOptionsTrading.com
Tags: anf, momentum options trades, momentum stock picks, Nike, NKE, option blog, option trading picks, options mentoring, options trading, PEP, PepsiCo
Posted in Company Commentary, Economic News, Entertainment Stocks, Financial Stocks, Market Analysis, Market Commentary, Option Trades, Sectors, Stock Earnings, Strategies, Watch Lists | Comments Off
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Unemployment Rate Falls to 8.3%
Friday, February 3rd, 2012
9:00am (EST)
The market finished flat on Thursday ahead of this morning’s unemployment numbers with Tech showing strength while the blue-chips slipped.
The Dow fell 11 points to 12,705 while the S&P added a point to end at 1,325. The Nasdaq added 11 points to finish at 2,859 after kissing a high of 2,868.
Before we get into this morning’s action, we wanted to give you an update on Abercrombie & Fitch (ANF, $40.40, down $6.43) which dropped 14% yesterday. We have been watching this stock for over a decade so we know how it trades and we could fell this big breakdown coming which may not be done. This is one of the beauties of trading options because sometimes you can just feel a trade is going to be good and we have targeted a drop below $40 for 2 weeks.
Shares were downgraded on Monday but shares drifted higher throughout the week and we knew we were getting the perfect setup. In fact, as we have been closing trades this week, we had Abercrombie put options at the TOP of our Watch List. The company was expected to announce earnings next week and we have been telling our subscribers that they could report a terrible quarter.
It wasn’t too hard to figure out when some of our research revealed the company has been slashing prices for months and has been losing market share. Plus, with the warm weather, this pick was a no brainer.
Here were our thoughts with stock and option quotes from the Wednesday’s close:
Abercrombie & Fitch (ANF, $46.83, up $0.89)
February 42 puts (ANF120218P00042000, $0.65, down $0.25)
May 37 puts (ANF120519P00037000, $1.10, down $0.30)
Thoughts: We could be getting close for a nice entry point. The company will announce earnings on February 13 and we think it will be a terrible quarter. In fact, they could pre-warn Wall Street and we may open a position by Friday on ANF with one of these options.
There is a chance for a pop to $50 but a move below $42.50 will be our trigger point. However, we may enter early on a drop below $45. (END)
Needless to say, the put options had a monster day. The February 42 puts (ANF120218P00042000, $2.25, up $1.60) were up a whopping 240% and the May 37 puts (ANF120519P00037000, $2.30, up $1.20) easily gained over 100%.
Abercrombie pre-announced results Thursday and said profits were up 16% for the quarter but U.S. sales were up just 4% due to heavy markdowns. Looking ahead, the retailer said it expects profits of $1.10-$1.15 a share for the current 3 months versus the suit-and-ties expectations for $1.54.
Although we missed another golden opportunity yesterday from a trade on our Watch List, Abercrombie could be headed below $30 so we may get another opportunity to short this name. We will be doing some more chart work over the weekend and we will let you know on Monday how things are looking.
The good news is we do have 2 current 100% winners on the books with half-profits already taken in one of them.
As far as this morning’s action, it looks like a green open and our headline says it all.
Dow futures are up 101 points to 12,767 while the S&P 500 futures are higher by 12 points to 1,334. The Nasdaq futures are showing a 24 point pop and are at 2,515.
Subscribers, check the Members Area for the updates and once again, stay on the lookout for Trade Alerts this morning.
Tags: anf, ANF earnings miss, call options, unemployment rate
Posted in Company Commentary, Earnings, Market Analysis | Comments Off