|
|
|
|
|
 |
|
|
 |
Tuesday, December 13th, 2011
1:40pm (EST)
The bulls are trying to power ahead following Monday’s pullback and got off to a good start despite more shaky comments from across the pond. Today’s rhetoric comes from German Chancellor, Angela Merkel, who said he was opposed to increasing the size of Europe’s bailout fund. The current ESM (European Stability Mechanism) has $500 billion euros which isn’t enough to cover Spain and Italy if they were to default. We have mentioned before if the EU can get this to $1 trillion it would do wonders for the market.
Here at home, Retail Sales were no help as they were up only 0.2% versus estimates for growth of 0.5% for November. Retail Sales less autos were also up 0.2% compared with forecasts for a 0.4% rise for the month.
Best Buy (BBY, $24.85, down $3.23) is down 12% after disappointing Wall Street with its quarterly numbers. The company reported a profit of $154 million, or $0.42 a share, versus $217 million, or $0.54 a share, for the year ago period. Revenue came in at $12 billion, up from $11.9 billion, for the same period. The suit-and-ties were looking for $0.52 a share on $12.1 billion.
We thought this could be a turnaround quarter for the company but they haven’t done anything exciting and continue to disappoint. Our chart work from the weekend showed Best Buy nearing resistance and an earnings beat could have gotten shares past $30. However, with the 10-cent miss, shares appear headed to the low $20’s where it still might not be a “Buy”. In other words, the company’s Best days could be over until it reinvents itself.
In IPO news (initial public offerings), Jive Software (JIVE, $15.00, up $0.03) priced 13.4 million shares at $12 and is showing a nice pop in its first day of trading. This is one of the “better” IPO’s coming public this week and, believe it or not, there is already takeover chatter surrounding the company.
Jive has a unique user platform and could be a good fit for IBM (IBM, $193.43, up $1.25), Microsoft (MSFT, $25.99, up $0.48), Oracle (ORCL, $31.32, flat) and SAP (SAP, $56.78, down $0.51), according to one analyst.
Elsewhere, one brokerage firm, Sterne Agee, couldn’t wait for Zynga (Proposed Ticker: ZNGA) to come public. The stock will make its debut on Friday, but they decided to jump the gun and initiated coverage of the stock with an “Underperform” rating. Yikes!
We will keep you updated on some of the other IPO’s coming out this week but we won’t be able to trade options on them until 2012 and they will be expensive. We aren’t sure if these two IPO’s will make our Watch List, but as you can see, analysts have already penciled in different expectations for the companies going forward.
As we continue to churn through this trading range, we are staying patient until we get the “all clear” sign from the bulls, or the bears. The upside resistance targets we have outlined or downside support levels we have gone over will come into play soon.
We will be adding some new option trade candidates to our Watch List tonight as we get ready for our next new batch of trades and we will be listing both call and put options. For those of you just joining us, stay patient as well.
As far as today’s action, the Dow is currently up 77 points to 12,098 while the S&P 500 is higher by a six-pack to 1,242. The Nasdaq is up a deuce to 2,614. Subscribers, check the Members Area for the updates.
Tags: BBY, Best Buy Earnings, IPOs, JIVE, ZNGA
Posted in Earnings, IPOs, Market Analysis | Comments Off
Tuesday, September 13th, 2011
1:00pm (EST)
Futures were pointing to a lower start this morning amid ongoing concerns about Greece and Italy but started to improve as we headed towards the opening bell. The market opened flat for the most part and drifted lower, before recovering and turning positive. Although the major indexes are now mixed, Tech is showing some strength.
Germany, the strongest country in the eurozone, is making its voice heard as they try to calm worries that Greece is heading for a default. The Germans rejected the notion that a Greek bankruptcy would provide a quick solution, like some have suggested, and say Europe instead needs to stick to its efforts to cut budget deficits and improve its competitiveness.
Meanwhile, Italy confirmed that they are in talks with China to persuade them to buy some of their bonds which was the catalyst for yesterday’s late-day rally.
Here at home, economic news has been light as well as corporate news although there is one company’s fall from grace we would like to highlight.
Best Buy (BBY, $23.11, down $1.82) continues to set fresh 52-week lows after kissing $22.74 earlier this morning. The company posted earnings that were well short of Wall Street’s forecast and shares are down another 7% on weaker sales.
The company earned 47 cents a shares on revenue of $11.35 billion but the suit-and-ties were looking for a profit of 53 cents a share on $11.5 billion. Best Buy also lowered their full-year guidance target to $3.45 a share, down from $3.55 a share, on sales of $51 billion-$52.5 billion. We aren’t “buying” it as we think shares will continue to struggle as consumers get thrifty.
We missed a sweet option trade on this one as the Best Buy September 25 puts (BBY110917P00025000, $1.94, up $0.97) have surged 100% today. Let’s see: stiffer competition, sluggish TV and video game sales, and lack of new products. Yeah, we missed the boat…
No worries, we have a trade we are releasing today that could do equally as well, if not better. In fact, if our price target for this stock, which is currently at $62, is hit, these options will make over 600%!
We said to get your Christmas shopping list ready and we are excited about this trade, folks!
As we head to press, the Dow is down 9 points to 11,051 while the S&P is up by 4 points to 1,166. The Nasdaq is also trading higher and is back over 2,500 – up 18 points to 2,513.
Subscribers, please check the Members Area for the important trade update and make sure you pay close attention to our instructions. We are using tight limit prices to establish positions for our NEW TRADE so we may have to be patient.
Tags: BBY, BBY earnings, bears, blue-chip stocks, bulls, Dow, Dow quotes, gold quotes, momentum, momentum options, Nasdaq, option mentoring, option trading course, S&P 500, VIX
Posted in Earnings, Market Analysis, Market Commentary | Comments Off
Tuesday, June 14th, 2011
12:35pm (EST)
The bulls are making some headway as futures were pointing towards a strong open this morning which has carried over into today’s session. Most of the gains were made at the open and have held but the important question will be if they hold into the close.
There were a number of economic reports that were bad, but not as fearful as analysts were expecting. Retail Sales for May fell by 0.2%, which was better than the expected forecast for a decline of 0.7%. Excluding autos, retail sales increased by 0.3% in May.
Elsewhere, the Producer Price Index (PPI) increased by 0.2% during May which was slightly higher than the 0.1% pop that had been expected. Core PPI also increased by 0.2%, which matched expectations.
Turning to earnings, Best Buy (BBY, $29.93, up $0.11) is up nearly 4% after beating Wall Street’s lowered forecast. The company reported a profit of $136 million, or $0.35 a share, versus $155 million, or $0.36 a share, in the year-ago quarter. Revenue came in at $10.94 billion.
Analysts were looking for a profit of $0.33 a share on revenue of $10.7 billion. In March, Best Buy said 2012 numbers would come in at $3.30-$3.55 a share versus estimates of $3.46 on revenue $51-$52.5 billion. They reaffirmed those numbers this morning but at the higher end of the range.
Beating a lowered bar is easy but Best Buy did a great job of focusing on some of their key markets which helped bring in new customers. The stock traded up to $31.32 at the open and the June 30 calls (BBY110618C00030000, $0.60, up $0.05) reached a high of $1.42 after opening at $1.20.
We profiled Best Buy for our Weekly Wrap in 2010 when shares were in the low $30’s and before they made a run to $45. The downfall since has shares at an attractive level but today’s pop shouldn’t be trusted. Due to the increased competition and depressed earnings, we would wait another quarter or two to see if the company has regained its footing before thinking of going long again.
As we head to press, the Dow is up 139 points to 12,091 while the S&P 500 is higher by 17 points to 1,289. The Nasdaq is advancing 40 points and is at 2,680.
We are releasing a NEW TRADE today and lately we have been hot. Our latest trade could make upwards of 400% if we are right. Shares are right at 52-week highs and we are expecting a breakout. Subscribers, check the Members Area for the latest updates and our newest recommendation!
Tags: BBY, Best Buy earning, call options, high beta stocks, Hot stocks, momentum options, Momentum stocks, option tips, options, options mentoring, options trading course, stock market options, weekly options
Posted in Earnings, Hot Stocks, Market Commentary | Comments Off
Tuesday, June 14th, 2011
9:00am (EST)
We didn’t expect much from Monday’s action as economic news was light and earnings are winding down to a trickle ahead of July’s big 2Q announcements. As such, the market ended flat for the session but we expect the action will pick up starting this morning as we have a number of headlines to report.
The Dow traded to a high of 12,011 but could only manage a 1 point gain and finished at 11,953. It was the Blue-Chips second-straight finish below 12,000 which has now become short-term resistance ahead of 12,200. Caterpillar (CAT, $95.44, down $1.35) and Hewlett-Packard (HPQ, $34.65, down $0.48) weighed on the index and accounted for 14 negative points. Short-term support remains 11,800-11,750.
We profiled Caterpillar last Monday inside our Members Area when shares were at $101 and said a test to $95 was coming, quickly. The July 95 puts (CAT110716P00095000, $3.20, up $0.45) were at $1.90 when we profiled the upcoming drop and the stock was at $101. Although it wasn’t an “official trade” the puts are up nearly 70% in a week which is where we would have taken profits.
As far as Hewlett-Packard, it looks like a falling knife we aren’t about to catch after hitting a fresh 52-week low of $34.60. We will have to check the chart but if further weakness is in store, we might have to add some put options to our Watch List.
The S&P 500 also added a point and settled at 1,271 after reaching a high of 1,277. The bulls were looking to hold 1,275 but still face pressure down to 1,250. Resistance is at 1,300 and then 1,325.
The Nasdaq slipped 4 points and closed at 2,639 after trading to an intraday low of 2,629. Short-term support is at 2,600-2,550 while resistance will come into play at 2,675-2,700.
Futures are soaring on a number of better-than-expected economic reports this morning and Best Buy (BBY, $28.82, up $0.39) is looking to open higher after beating Wall Street’s with their latest quarterly results. We will cover these stories in our afternoon update.
Dow futures are up 100 points to 11,985 while the S&P futures are showing are advancing by 14 points to 1,280. The Nasdaq futures are up 20 points to 2,240. We have a couple of MONSTER trades we are on the verge of closing which are up over 150% and 200%, respectively. We also have a few other option trades that we are also expecting to do well this week.
If you haven’t signed up with us yet or are nervous due to the current market volatility then don’t be. Remember, you can make just as much with put options in a lower trending market as you can with call options in a higher trending market so don’t be scared. Come get some action!
Subscribers, check the Members Area for the updates.
Tags: BBY, call options, CAT, high beta stocks, Hot stocks, HPQ, momentum options, Momentum stocks, option tips, options, options mentoring, options trading course, stock market options, weekly options
Posted in Market Analysis, Strategies, Trade Update | Comments Off
Tuesday, September 14th, 2010
12:40pm (EST)
After a rough start, the bulls have powered their way higher as the market continues to push towards the top end of its ranges. There are few economic reports worth mentioning and earnings are coming into play on a few stocks which have helped provide support as the bulls push forward.
The Commerce Department reported retail sales increased 0.4% in August which was slightly ahead of expectations. Excluding a decline in autos, retail sales increased 0.6% and posted the second straight monthly increase and the biggest gain since March.
Elsewhere, business inventories jumped in July by their largest amount in two years and business sales rebounded after two months of declines. U.S. businesses rose 1% in July from June to a seasonally adjusted $1.38 trillion versus expectations for an increase of 0.6%.
Turning to earnings, Best Buy (BBY, $37.07, up $2.42) is up 7% after smashing Wall Street’s expectations. The company reported a profit of $254 million, or $0.60 a share, versus $158 million, or $0.37 a share, in the year-earlier quarter. Revenue came in at $11.3 billion but the company’s gross margins offset the miss. Analysts are looking for a profit of $0.46 a share with revenue of $11.65 billion.
There were a ton of traders betting against Best Buy thinking they might cut guidance which is why we are seeing a big run-up in the stock today and the call options have exploded. We got some of that action. The company lifted guidance going forward by 10 cents and said it now sees earnings of $3.55 to $3.70 for the year.
And this just in, Cisco Systems (CSCO, $21.95, up $0.65) is going to start paying a dividend. This has provided another little boost for Tech as the indexes are near their highs for the session.
As we head to press, the Dow is up 34 points to 10,578 and is nearing our 10,600 target. The S&P 500 is higher by 4 points and is dancing around our 1,125 target while the Nasdaq is jumping 15 points and is right on our 2,300 target. Man, is this getting interesting!
As usual, we have a lot to cover in our Members Area so let’s get on it. We will be back Wednesday morning a full update.
Tags: BBY, CSCO, explain the concept of options, momentum options trading, NYSE: CSCO, option picks, option trading blog
Posted in Earnings, Market Analysis | Comments Off
|
|
|  | | | |
Get RSS Feed
Best Buy is Not a “Buy”
Tuesday, September 13th, 2011
1:00pm (EST)
Futures were pointing to a lower start this morning amid ongoing concerns about Greece and Italy but started to improve as we headed towards the opening bell. The market opened flat for the most part and drifted lower, before recovering and turning positive. Although the major indexes are now mixed, Tech is showing some strength.
Germany, the strongest country in the eurozone, is making its voice heard as they try to calm worries that Greece is heading for a default. The Germans rejected the notion that a Greek bankruptcy would provide a quick solution, like some have suggested, and say Europe instead needs to stick to its efforts to cut budget deficits and improve its competitiveness.
Meanwhile, Italy confirmed that they are in talks with China to persuade them to buy some of their bonds which was the catalyst for yesterday’s late-day rally.
Here at home, economic news has been light as well as corporate news although there is one company’s fall from grace we would like to highlight.
Best Buy (BBY, $23.11, down $1.82) continues to set fresh 52-week lows after kissing $22.74 earlier this morning. The company posted earnings that were well short of Wall Street’s forecast and shares are down another 7% on weaker sales.
The company earned 47 cents a shares on revenue of $11.35 billion but the suit-and-ties were looking for a profit of 53 cents a share on $11.5 billion. Best Buy also lowered their full-year guidance target to $3.45 a share, down from $3.55 a share, on sales of $51 billion-$52.5 billion. We aren’t “buying” it as we think shares will continue to struggle as consumers get thrifty.
We missed a sweet option trade on this one as the Best Buy September 25 puts (BBY110917P00025000, $1.94, up $0.97) have surged 100% today. Let’s see: stiffer competition, sluggish TV and video game sales, and lack of new products. Yeah, we missed the boat…
No worries, we have a trade we are releasing today that could do equally as well, if not better. In fact, if our price target for this stock, which is currently at $62, is hit, these options will make over 600%!
We said to get your Christmas shopping list ready and we are excited about this trade, folks!
As we head to press, the Dow is down 9 points to 11,051 while the S&P is up by 4 points to 1,166. The Nasdaq is also trading higher and is back over 2,500 – up 18 points to 2,513.
Subscribers, please check the Members Area for the important trade update and make sure you pay close attention to our instructions. We are using tight limit prices to establish positions for our NEW TRADE so we may have to be patient.
Tags: BBY, BBY earnings, bears, blue-chip stocks, bulls, Dow, Dow quotes, gold quotes, momentum, momentum options, Nasdaq, option mentoring, option trading course, S&P 500, VIX
Posted in Earnings, Market Analysis, Market Commentary | Comments Off