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Monday, March 21st, 2011
1:00pm (EST)
The bulls have continued last week’s late push on merger-and-acquisition (M&A) news which has helped push the major indexes back towards resistance. The market is off its session highs but only slightly despite some nasty housing numbers. Existing home sales for February came in at 4.88 million units, which was less than the 5.05 million that had been expected.
The news was released shortly after the market opened but the bulls ignored it and have even pushed the Homebuilding sector higher today. KB Home (KB, $13.31, up $0.22), which reports earnings this Friday, and Lennar (LEN, $19.79, up $0.12) have come off their highs but are seeing some action.
As far as M&A news, AT&T (T, $28.37, up $0.43) and Deutsche Telekom AG got the ball rolling early as they announced a $39 billion, cash-and-stock deal on Sunday in which AT&T will acquire T-Mobile from the company. In return, Deutsche Telekom will now own 8% of AT&T but the merger could face some headwinds with regulatory approval which is expected to take up to a year.
Elsewhere, Charles Schwab (SCHW, $17.44, down $0.11) has agreed to buy optionsXpress (OXPS, $17.70, up $2.37) for $1 billion as Chuck looks to expand his company’s options. Schwab will pay a little over 1 share of its common stock for each share of optionsXpress stock which, based on Friday’s closing price, gets the bid up to $17.91. Both brokerage firms will initially retain their separate brand identities and the deal is expected to close in the third quarter.
As far as the market, things are also looking up although the bulls need to close above resistance to keep the momentum going this week.
The Dow is up triple-digits, or 182 points, to 12,040 while the S&P 500 is higher by 19 points to 1,298. We are looking for a close above 12,000 for the Dow and 1,300 for the S&P. The Nasdaq is showing a 48 point gain and is at 2,691. The index has traded up to 2,699.70 but has once again failed to clear 2,700.
We have a lot to cover in our Members Area today, including a NEW TRADE! We think we have found a “safe” trade that should do well through this market volatility as shares continue to set new 52-week highs.
Tags: Charles Schwab, KB Home, NYSE< KBH, optionsXpress, OXPS Posted in Market Commentary, Mergers and Acquisitions | Comments Off
Tuesday, January 19th, 2010
9:10am(EST)
Futures are mixed as we head towards the opening bell this morning. Dow futures are lower by 20, S&P 500 futures are off by 2 while the Nasdaq futures are up 4 points.
There was plenty of action in E*Trade Financial (ETFC, $1.84, up $0.11) last Friday as over 60 million shares traded hands. There was a report that the company is in “advanced” talks regarding a sale.
It’s hard to get excited about a company who once dominated the online brokerage industry and a share price at less than $2. From 1998 through 1999 this was one of the highest of flying stocks as two-for-one splits were common and shares made new highs daily.
There has been a lot of speculation as to who might buy the troubled brokerage firm but E*Trade has brand awareness which should account for some kind of premium. TD Ameritrade (AMTD, $18.32, up $0.10) and Charles Schwab (SCHW, $19.00, down $0.18) have been in the mix as possible acquirers of E*Trade but we really don’t see an option trade with this one.
Option volume was brisk and the stock already trades like one. However, we are avoiding options on stocks that trade under $5.00 because of the risk. That still didn’t stop traders from placing huge bets on the February 2 calls (EUSBF, $0.12, up $0.07) which opened at 4 cents and returned 200% by the closing bell. Over 10,000 contracts traded.
The April 2 calls (EUSDF, $0.20, up $0.05) traded 3,000 contracts after opening at 14 cents. Considering this has been an ongoing rumor for some time and the fact that it would be safer to buy the stock, these two call options could expire worthless if no bid comes. Stay away…
We have updated the Members Area for our current trades and there a few trades we are watching this morning. If we see something, we will send out an alert.
Tags: alternative investments, asset management, blog Wall Street, buying call options, buying put options, call option trading, Charles Schwab, chicken option trades, Covered Calls, E*Trade Financial buyout rumors, financial, financial investment, funds, future option trading, futures trading, gold investing, guide to investment, guide to options, guide to options trading, hedge fund, hedge funds, how to invest, income, index funds, index options, invest, invest money, investing for dummies, investing market, investment, investment advisor, investment management, investment services, investment strategy, investments, journal Wall Street, momentum stock option trading, mutual investing, new Wall Street, on Wall Street, online option trading, online trading system, option call, option exchange, option investment, option picks, option price, option selling, option trade, option trade picks, option trading online, options, options alerts, options blog, options expiration, options mentoring, options newsletters, options signals, options track record, options trade, options trading, options trading strategies, private equity, put option trading, Rick Rouse, software options, stock, stock exchange, stock investment, stock market, stock market options, stock option trade pick service, stock option trading, stock price, stock quotes, stock share, stock trading, straddle option trades, strangle option trades, strategies options, support and resistance levels, the Wall Street, trading, trading option, trading options, triple-digit option trades, wall st, Wall Street, Wall Street article, Wall Street blog, Wall Street history, Wall Street online, wealth management Posted in Company Commentary, Market Analysis, Market Commentary | Comments Off
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M&A Activity Helps Bulls Push Resistance
Monday, March 21st, 2011
1:00pm (EST)
The bulls have continued last week’s late push on merger-and-acquisition (M&A) news which has helped push the major indexes back towards resistance. The market is off its session highs but only slightly despite some nasty housing numbers. Existing home sales for February came in at 4.88 million units, which was less than the 5.05 million that had been expected.
The news was released shortly after the market opened but the bulls ignored it and have even pushed the Homebuilding sector higher today. KB Home (KB, $13.31, up $0.22), which reports earnings this Friday, and Lennar (LEN, $19.79, up $0.12) have come off their highs but are seeing some action.
As far as M&A news, AT&T (T, $28.37, up $0.43) and Deutsche Telekom AG got the ball rolling early as they announced a $39 billion, cash-and-stock deal on Sunday in which AT&T will acquire T-Mobile from the company. In return, Deutsche Telekom will now own 8% of AT&T but the merger could face some headwinds with regulatory approval which is expected to take up to a year.
Elsewhere, Charles Schwab (SCHW, $17.44, down $0.11) has agreed to buy optionsXpress (OXPS, $17.70, up $2.37) for $1 billion as Chuck looks to expand his company’s options. Schwab will pay a little over 1 share of its common stock for each share of optionsXpress stock which, based on Friday’s closing price, gets the bid up to $17.91. Both brokerage firms will initially retain their separate brand identities and the deal is expected to close in the third quarter.
As far as the market, things are also looking up although the bulls need to close above resistance to keep the momentum going this week.
The Dow is up triple-digits, or 182 points, to 12,040 while the S&P 500 is higher by 19 points to 1,298. We are looking for a close above 12,000 for the Dow and 1,300 for the S&P. The Nasdaq is showing a 48 point gain and is at 2,691. The index has traded up to 2,699.70 but has once again failed to clear 2,700.
We have a lot to cover in our Members Area today, including a NEW TRADE! We think we have found a “safe” trade that should do well through this market volatility as shares continue to set new 52-week highs.
Tags: Charles Schwab, KB Home, NYSE< KBH, optionsXpress, OXPS
Posted in Market Commentary, Mergers and Acquisitions | Comments Off