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BBBY Takes a Bath/ Profit Alert (KOG)!!!

Thursday, April 10th, 2014 Midday Update for 4/10/2014

BBBY Takes a Bath/ Profit Alert (KOG)!!! 

12:20pm (EST)


Shares of Bed Bath & Beyond (BBBY, $63.75, down $4.16) are down 6% today after the company posted weaker-than-expected earnings results and lowered its outlook for the current quarter.

Bed Bath & Beyond matched Wall Street’s $1.60 a share target but they missed on revenue of $3.2 billion versus expectations for $3.22 billion as same-store-sales rose just 1.7%.

For the current quarter, the company forecasted earnings of $0.92-$0.96 a share versus the suit-and-ties calls for $1.04 a share.

Here were our thoughts on a possible earnings trade from our Weekly Wrap (quotes from 4/4/14):

Bed Bath & Beyond (BBBY, $69.22, down $0.58)

April 72.50 calls (BBBY140519C00072500, $0.80, down $0.20)

April 67.50 puts (BBBY140419P00067500, $1.25, up $0.20)

Thoughts:  Shares could move 10% or more on earnings and the trend feels lower.” (END)

We should have expanded our research a little more as the one in “our town” was recently shut down.  The company has been a Wall Street darling for years but competition in the space has picked up, especially online.

We listed both calls as puts as a possible strangle option trade for protection in case the company might have matched or beat expectations.

The April 67.50 puts (BBBY140419P00067500, $3.50, up $1.90) were at $1.60 ahead of Wednesday’s close and are up over 120% on the drop below $65.

The April 72.50 calls (BBBY140519C00072500, $0.03, down $0.37) were at 40 cents going into yesterday’s close and are naturally getting crushed.

Together, these options could have been purchased for $2 and at current levels the trade would have made 75% had we pulled the trigger yesterday.

We often mention earnings trades can be fun and difficult to trade because there are numerous factors involved in determining if shares are going to rally or pull a Tom Petty (Breakdown).  However, this one may have been a Captain Obvious as Bed Bath & Beyond continues to struggle.

This week’s bigger earnings announcements come tomorrow as JPMorgan Chase (JPM, $58.49, down $0.78) and Wells Fargo (WFC, $48.54, down $0.56) are scheduled to release their results.

The bulls need a solid report from both to end the week on a strong note as their is weakness today.

We have done well navigating the choppy waters as we have 4 current trades at or near triple-digit gains.  We haven’t purchased too many put options this year (or last) but we wanted some protection last week.  The stock we picked was an old short favorite of ours and continues to break down like a rented mule so feel comfortable holding the position.

The other trades are bullish option positions on stocks at or near 52-week highs.  The knuckleheads that say it’s been a stock picker’s market have been correct as these stocks have stayed under Wall Street’s radar.

We have raised our stops and have made a few of them Hard Stops in case there is further weakness this afternoon but we are still expecting the bulls to push new highs this month, possibly as early as next week.

As we make the turn, the Dow is down 143 points to 16,293 while the S&P 500 is lower by 23 points to 1,848.  The Nasdaq is getting spanked for 98 points to 4,085 and the Russell 2000 is off a double-deuce (22 points) to 1,137.  The VIX is at 14.65, up 0.83.

Subscribers, check the Members Area for the current updates and stay close to your computer and mobile devices as we could have additional Trade Alerts into the close.  We could also have New Trades for our Weekly Wrap as well.


Futures Pointing Towards Lower Open

Thursday, September 23rd, 2010

8:45am (EST)

The bulls tried to challenge current resistance levels but failed once again to break through for the third straight session as the market ended slightly lower on Wednesday.  There was no economic news to trade on and Wall Street seemed to ponder what the Fed’s announcement late Tuesday would mean going forward. 

Tech was weak but the Financial sector fell the most as bank stocks sank 1.6% on average following Tuesday’s 1% slide.  We continue to say the bulls will have a hard time taking the market to new highs without the help of the Financial sector and volume was lousy once again for the major exchanges.  Oh, and unemployment remains at 9.6%.  These are the three main catalysts we are watching to confirm a breakout but the longer we test resistance, the move convinced we are this market is going to hurt a lot of investors.

The Dow managed to hold the 10,700 level and finished the session at 10,739, down 21 points.  The bulls made a run at 10,800 but the action favored the bears after the first hour of trading.

The S&P 500 managed to hold 1,130 and finished at 1,134, down 6 ticks, after touching a low of 1,131.  The index traded up to 1,144 and 1,150 is our top.

The Nasdaq flirted with 2,350, yet again, as the index maxed-out at 2,355 but failed to match the intraday highs from Monday and Tuesday.  The index fell 15 points to finish at 2,334 and touched a low of 2,323.

If the bears can crack 10,600; 1,130; and 2,300; it will also confirm that the recent uptrend is losing steam which is how all of this is currently playing out on the charts.

Turning to earnings, Red Hat (RHT, $36.75, down $1.68) reported quarterly earnings of $24 million, or $0.12 a share, versus $29 million, or $0.15 a share, in the year ago quarter.  Excluding one-time items, the company actually earned $0.19 a share in the quarter, which was a penny better than Wall Street had forecast.


Revenue jumped 20% to $220 million while analysts were looking for $211 million.   Red Hat is an open source software solutions provider (think Linux) and is often mentioned in takeover chatter.  We currently have this one on our Watch List with some options listed but we stayed on the sidelines while the company briefed the Street. 

We like the longer-term prospects for Red Hat, buyer or no buyer, but wanted to see what they had to say in their conference call before placing our bets on where we think shares will be in 6 months.

Shares of Red Hat ended at $38.20, up $1.45, in after-hours trading last night and those gains have held in pre-market action this morning.

Bed Bath & Beyond (BBBY, $42.05, up $0.09) also reported after the bell on Wednesday and saw its shares pop 5% to $44.15 in extended trading after beating expectations and raising the bar going forward.


The company reported a profit of $182 million, or $0.70 a share, versus $136 million, or $0.52 a share, in the year ago quarter.  Revenue came in at $2.14 billion, up from $1.9 billion last year.  Wall Street was looking for $0.63 a share on revenue of $2.10 billion.

For the current quarter, Bed Bath & Beyond forecast earnings of $0.61-$0.65 a share, which was slightly than the $0.63 analysts had pegged for the company.  For the full year, they expect earnings grow as much as 20%.

And finally, how could we not mention the run gold is having?  The yellow metal hit a new all-time high of $1296/ ounce before settling at $1292/ ounce.  Meanwhile, silver continues to shine as it rallied to a new 2 1/2 year high of $21.15/ ounce before closing at $21.05 on Wednesday.

If you hold metals, you can thank the dollar which dropped nearly 1% and set a five-month low against other currencies yesterday.

As we head to press, Dow futures are down 77 points to 10,596 while the S&P 500 futures are off by 10 points to 1,120.  The Nasdaq 100 futures are lower by 14 points to 1,966.

We have TWO new trades we are trying to get into this morning and hopefully we are able to get in at our limit prices.  Subscribers, check the Members Area for the updates.

Bulls Bounce Back On Bank Strength

Thursday, April 8th, 2010

1:15pm (EST) 

The market has made its way into positive territory after spending much of today’s session in negative territory.  The charge has been led by financial stocks, which are now up after they were down sharply earlier this morning.

The retail sector has also helped the bulls’ case thanks in part to a bunch of stronger-than-expected monthly sales results.  In fact, the S&P 500 Retail Index is up 0.4% at the moment which has helped to limit the consumer discretionary sector’s slide to just 0.1%.

A disappointing report on initial jobless claims led to the weak open.  The Labor Department said initial claims for jobless benefits rose unexpectedly last week, jumping 18,000 to a seasonally adjusted 460,000.  Wall Street pencil pushers forecast a drop to 435,000.

As a result, the Dow is currently up 26 points to 10,923 while the S&P 500 is higher by 2 to 1,184.  The Nasdaq is showing a 5 point gain and is at 2,436.

Turning to earnings, Bed Bath & Beyond (BBBY, $46.35, up $1.88) reported a blowout quarter and we have mentioned the stock all week on our Watch List inside our Members Area. 

BBBY Hourly Chart

BBBY Hourly Chart

The company posted a 4Q profit of $226 million, or $0.86 a share, versus $141 million, or $0.55 a share, in the year ago period.  Revenue climbed 17% to $2.2 billion, as “3B” added 17 stores in the quarter.  Wall Street had expected earnings of 73 cents on sales of $2.1 billion for the company.

For the full year, 3B earned $600 million, or $2.30 a share versus the previous year’s profit of $425 million, or $1.64 a share. 

We have a lot to cover today in our Members Area so let’s get to it.

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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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