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Thursday, February 11th, 2010
9:05am (EST)
The market traded in negative territory for the most part on Wednesday although the afternoon session saw more strength. Trading was choppy after lunch and the bears ended up taking the day as the Dow dipped 20 points to settle at 10,038.
The bulls stepped in when the Dow slipped to 9,962 a little while after the open and after hearing Big Ben’s plans to scale back the Fed’s support for the economy. This could mean rising interest rates but they can’t stay at zero forever, right?
As far as the other indexes, their losses were minimal as well. The Nasdaq shed 3 points and closed at 2,147 while the S&P 500 lost 2 points and will start the day at 1,068.
There are still dark clouds over the market and the PIGS (Portugal, Ireland, Greece and Spain) are a big concern. A meeting of the minds (European Union officials) is scheduled for today so the market will be hinging on every word that is leaked from the grapevine.
There have made no decisions on how to help Greece but the market is thinking France and Germany will come up with some kind of aid package. If the threat of a potential default starts to fade then it will be one less negative the bulls have to deal with.
We have a big day for earnings and here is the list of companies reporting. Some are in the process of reporting right now, before the bell. Those companies include Pepsi (PEP, $60.38, up $0.33), Philip Morris (PM, $46.81, down $0.04) and Viacom (VIA, $30.26, down $0.23).
Companies reporting AFTER the bell that could be set for big moves on Friday: Blue Nile (NILE, $50.91, up $2.25), Buffalo Wild Wings (BWLD, $47.61, up $0.80), Chipotle Mexican Grill (CMG, $99.51, down $1.14) and Panera Bread (PNRA, $72.37, down $0.20).
We take a look at some possible option trades on a couple of these names this morning in the Members Area. We will profile cheap out-of-the-money calls and puts and although there are risks, the rewards are a double or more in less than 24 hours.
Tags: Blue Nile, Buffalo Wild Wings, BWLD, Chipotle Mexican Grill, CMG, option picks, option signals, options alerts, Panera Bread, Pepsi, Philip Morris, stock options trading, Viacom
Posted in Company Commentary, Earnings, Market Analysis, Market Commentary | Comments Off
Wednesday, July 22nd, 2009
10:00am (EST)
Chipotle Mexican Grill (CMG, $91.23, up $2.53) will be reporting earnings after the bell today so I wanted to give you an update before they report. The stock is no stranger to the blog and is capable of making big moves with or without an earnings announcement.
What makes today’s earnings announcement more exciting is the technical level the stock is approaching. I profiled the August 95 calls (CMGHS, $3.40, up $1.10) yesterday when they were at $2.00 and said I liked positions up to $2.50. It was a “now or never” moment to jump on board and if you did, you are up nearly 50%.
What makes this trade so interesting is the fact that the stock is challenging its 52-week high of $92.39. If we can get a push above $93 it would be very bullish and we could see “blue-sky” territory. I use this term when a stock breaks a 52-week high and continues to run.
Of course, you could take a little off the table if you plan on playing earnings but this was an all or nothing trade for most of you. I did say I’d like to be out BEFORE earnings so that was the original plan. However, this position has a chance for a triple-digit gain if Wall Street gives them some earnings love.
Rick@MomentumOptionsTrading.com
Tags: Chipotle Mexican Grill
Posted in Option Trades | No Comments »
Tuesday, July 21st, 2009
10:30pm (EST)
Talk about a product(s) that sells itself. Every year, quarter after quarter, Apple (AAPL, $151.51, down $1.40) seems to impress us and Wall Street with a new gadget or an improved model on an already existing one. This quarter it was Apple’s new iPhone although it didn’t make its debut until June. Yet, Apple still sold 5 million units. Incredible.
The sales figure is even more impressive when you consider Apple cut prices in half on the older 3G models to $99. The Apple 3GS model was only on the books for 30 days and Apple would have crushed Wall Street’s numbers without it. I can see all of the analysts rushing in to upgrade next quarter’s numbers.
For you number geeks, Apple reported profits of $1.2 billion, or $1.35 a share, versus $1.1 billion, or $1.19 last year. Sales came in at $8.3 billion, up from $7.5 billion. For the upcoming quarter, Apple forecast earnings of $1.18-$1.23 on revenue of $8.7-$8.9 billion. Talk about sandbagging…expect Apple to blow by them as well with the back-to-school season right around the quarter. In after-hours trading, the stock was up $7 to $158+.
When I left you at 1pm today, I said the bulls could be resting for the afternoon push and that is just what we got. With Apple’s numbers and the way the stock is acting in after-hours, the bulls will be running again on Wednesday.
If that is the case, then we should see continued strength in our IBM (IBM, $117.04, up $0.60) and Cisco Systems (CSCO, $21.59, up $0.44) trades. For those of you who just joined us this week, it is too late to participate in these trades but the results will floor you.
On July 14th and 16th I told readers to jump on some IBM calls as a way to play an expected surge in the stock. Some of our subscribers closed out their IBM July 105 calls for profits up to 450%. I also profiled the August 105 calls (IBMHA, $12.00, up $0.30) at $3.40 and the August 115 calls (IBMHC, $3.70, up $0.20) at $1.05. Both call options have now returned 250%.
I bring this up not to make you newbies feel like you just missed out on some really good trades but because I don’t want anyone STARTING positions on any of these options. We have a lot of new faces this week so I want to be clear on what is going on. We have a stop of $10.00-$10.50 for the 105’s. And for the 115’s we have a stop of $2.25-$2.50. Bump those up to $11 and $3 if IBM continues higher on Wednesday.
For Cisco, I profiled the October 20 calls (CYQJD, $2.30, up $0.30) on June 2nd at $1.50. This position lost as much as 50% but I kept telling everyone to hang in there…Cisco is a $25 stock. I wish I would have told you do “double up” when these calls were at 75 cents a few weeks ago but I don’t trade that way. We don’t need Cisco to go to $25 to be profitable with this position as you can see. However, I will say this…these call options will be worth at least $5 if Cisco is at $25 by October 16th.
At current levels, the position is up 50%. Set stops at $2.00 to protect profits.
Both stocks were higher in extended trading and with the Apple news we should be able to ride the positions higher while moving our stops along the way.
BTW, Chipotle Mexican Grill (CMG, $88.70, up $0.40) was back at $90 in after-hours and the August 95 calls (CMGHS, $2.30, down $0.05) rebounded from the $2.00 bottom we saw at 1:00pm. The company reports after the bell on Wednesday…
Rick@MomentumOptionsTrading.com
Tags: Apple, Chipotle Mexican Grill, Cisco Systems, IBM
Posted in Apple, Earnings, Market Analysis, Option Trades, Trading Tips | No Comments »
Tuesday, July 21st, 2009
1:00pm (EST)
After a strong start, the market has slipped as all three major indexes are slightly down. The losses are minimal so maybe the bulls are resting for another afternoon rally.
Not much is happening with our positions and remember Chipotle Mexican Grill (CMG, $87.78, down $0.52) is reporting on Wednesday after the bell. The stock has popped over $90 and I profiled the August 90 calls (CMGHS, $2.00, down $0.35) yesterday afternoon. I said I like positions up to $2.50 when they were at $2.35 but I also said to use limit prices to see if you could get in at lower entries.
The calls have hit a high of $2.50 after the stock passed $90 but have now retreated. It’s now or never for those of you who like the thrill of an earnings play…
Another story I’m watching closely is DryShips (DRYS, $6.07, up $0.02) which is seeing some unusual options activity. The stock has been a frequent visitor here in the blog and is capable of explosive moves up or down. In fact, over the past couple of months we have seen moves from $6 to $11+ and $6 to $9. If you’ll look at a chart, you’ll see some interesting action developing.
There seems to be a lot of buyers of the August 7 calls (OOCHJ, $0.25, up $0.03) as nearly 9,000 contracts have traded thus far. Further out, there seems to be interest building in the September 7.50 calls (OOCIU, $0.35, 0.01) as 850 contracts have traded.
The company reports earnings next Friday and it is one of those plays that is an all-or-nothing gig. If the stock is setting up for another run at $8 or $10 then these call options will do well. We have numerous positions open so be careful with these. They are cheap out-of-the money plays and if you enter the icy waters, use LIMIT orders and split the Bid and Ask prices.
Rick@MomentumOptionsTrading.com
Tags: Chipotle Mexican Grill, DryShips
Posted in Earnings, Option Trades, Trading Tips | No Comments »
Monday, July 20th, 2009
12:30pm (EST)
Fairchild Semiconductor (FCS, $8.83, up $0.26) is one of the best performers in the chip sector today as it is enjoying a 3% pop. The August 10 calls (FCSHB, $0.25, up $0.05) were profiled last Thursday at 17 cents. These is a very cheap out-of-the-money call option on a stock I feel has a shot at $10+ over the next month. However, there is still a huge difference in the Bid and Ask. I want to explain this to our new readers and it is a tip that will pay for itself over and over again.
The current Bid is 15 cents meaning if you were to sell this option right now at the market you would get filled at 15 cents. The Ask is 25 cents so if you went to buy this option it would cost you $25 per contract. Here is where you would use “limit orders” to enter the position. You could buy or sell this option with a limit price of 20 cents. If you get a buyer or seller, fine, you went out and got in or out on YOUR terms. Remember this everytime you place a trade. Sometimes if a position is up HUGE, then yeah, you could do a market order to get out but otherwise ALWAYS stick to using LIMIT ORDERS.
The Bid and Ask could narrow if Fairchild keeps moving but I wanted to make sure I got this point across.
USEC (USU, $6.26, down $0.19) is slightly lower today but I’m expecting a pop in the August 7.50 calls (USUHU, $0.45, down $0.10) which were profiled at 52 cents last Thursday. This is a HIGHLY speculative play just like Fairchild and is based on an event happening. I’m hoping for a rally BEFORE the event with USEC.
That should cover all of the OPEN trades. What I’m looking at RIGHT now:
Chipotle Mexican Grill (CMG, $88.50, up $3.45) started off higher but has picked up steam over the past 90 minutes. Wow. The August 95 calls (CMGHS, $2.30, up $0.95) opened at $1.80 and they may be a good buy up to $2.50. They could also fall back a little so you could set LIMIT ORDERS at $2.00-$2.15. The company announces earnings on Wednesday and we have traded this one in the past. I’d like to be out BEFORE earnings but Chipotle can get some good love from Wall Street at times. Be careful with them and we will see where we are Tuesday afternoon…
Rick@MomentumOptionsTrading.com
Tags: Chipotle Mexican Grill, Fairchild Semiconductor, USEC
Posted in Company Commentary, Earnings, Option Trades | No Comments »
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Big Day For Earnings
Thursday, February 11th, 2010
9:05am (EST)
The market traded in negative territory for the most part on Wednesday although the afternoon session saw more strength. Trading was choppy after lunch and the bears ended up taking the day as the Dow dipped 20 points to settle at 10,038.
The bulls stepped in when the Dow slipped to 9,962 a little while after the open and after hearing Big Ben’s plans to scale back the Fed’s support for the economy. This could mean rising interest rates but they can’t stay at zero forever, right?
As far as the other indexes, their losses were minimal as well. The Nasdaq shed 3 points and closed at 2,147 while the S&P 500 lost 2 points and will start the day at 1,068.
There are still dark clouds over the market and the PIGS (Portugal, Ireland, Greece and Spain) are a big concern. A meeting of the minds (European Union officials) is scheduled for today so the market will be hinging on every word that is leaked from the grapevine.
There have made no decisions on how to help Greece but the market is thinking France and Germany will come up with some kind of aid package. If the threat of a potential default starts to fade then it will be one less negative the bulls have to deal with.
We have a big day for earnings and here is the list of companies reporting. Some are in the process of reporting right now, before the bell. Those companies include Pepsi (PEP, $60.38, up $0.33), Philip Morris (PM, $46.81, down $0.04) and Viacom (VIA, $30.26, down $0.23).
Companies reporting AFTER the bell that could be set for big moves on Friday: Blue Nile (NILE, $50.91, up $2.25), Buffalo Wild Wings (BWLD, $47.61, up $0.80), Chipotle Mexican Grill (CMG, $99.51, down $1.14) and Panera Bread (PNRA, $72.37, down $0.20).
We take a look at some possible option trades on a couple of these names this morning in the Members Area. We will profile cheap out-of-the-money calls and puts and although there are risks, the rewards are a double or more in less than 24 hours.
Tags: Blue Nile, Buffalo Wild Wings, BWLD, Chipotle Mexican Grill, CMG, option picks, option signals, options alerts, Panera Bread, Pepsi, Philip Morris, stock options trading, Viacom
Posted in Company Commentary, Earnings, Market Analysis, Market Commentary | Comments Off