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Monday, August 23rd, 2010
9:00am (EST)
Futures are pointing towards a slightly higher open this morning as mergers and acquisitions (M&A) have once again taken center stage.
Hewlett-Packard (HPQ, $39.85, down $0.91) has made a $1.5 billion bid for data storage provider 3Par (PAR, $18.04, up $0.01) this morning, just a week after rival Dell (DELL, $12.07, up $0.03) agreed to acquire the company for $1.1 billion.
Both HP and Dell have been looking to expand beyond personal computers and they see an attractive candidate in 3Par. HP it will pay $24 a share to acquire the company, or a 33% premium over Dell’s bid of $18 a share.
Elsewhere, HSBC Holdings (HBC, $49.30, down $0.63) is in talks to buy a controlling stake in Nedbank Group from Old Mutual for as much as $7 billion.
Potash (POT, $149.67, up $0.84) is higher in pre-market trading and over $152 after formally rejected BHP Billiton’s (BHP, $67.44, dup $0.09) offer and is getting interest from other companies (and countries).
M&A activity continues to heat up in the dog days of August as companies with strong balance sheets and excess cash go on the hunt for bargains. This positive catalyst could help the bulls’ case in holding current levels on the major indexes as potential acquisitions are a sign companies are confident the economy will grow and business will improve in the coming quarters.
Ahead we head to press, Dow futures are up 25 points to 10,227 while the S&P 500 futures are up 4 points to 1,074. The Nasdaq 100 futures are higher by 10 to 1,835.
We have a lot to cover this morning as we have made some adjustments to our exit targets for some of our trades. We also have a NEW TRADE we profile to replace a few that were closed from last week.
Subscribers, check the Members Area for the updates.
Tags: 3Par, BHP, Dell, HBC, HPQ, option picks, PAR, POT, stock options trading
Posted in Market Analysis, Mergers and Acquisitions | Comments Off
Friday, August 20th, 2010
9:00am (EST)
The bulls got a nasty wake-up call yesterday as the bears punished the market and are gathering strength to do some more damage.
The Dow ended Thursday with a loss of 144 points, or 1.4%, to close at 10,271. All 30 stocks that make up the Dow finished in the red as the index touched a low of 10,202. We mentioned support would come in at 10,200 but that level is likely to be taken out today, if not, next week.
The S&P 500 fell 19 points, or 1.7%, to settle at 1,075 and found support right at our 1,070 target. However, it now appears 1,050 will come into play with a possible test down to 1,000 again.
The Nasdaq declined 37 points, or 1.7%, and closed at 2,178. The index touched a low of 2,168 and it appears the next stops will be 2,150 and then 2,050.
As far as today, the market won’t have any economic news to deal with and earnings are light.
Dell (DELL, $12.04, down $0.15) announced after the closing bell on Thursday and told Wall Street they earned $545 million, or $0.28 a share. In the year ago period, Dell earned $472 million, or $0.24 a share. Revenue rose to $15.5 billion, from $12.8 billion, which topped the $15.2 billion analysts had predicted.
Not a bad quarter on the surface, but Dell’s gross profit margins fell and shares are 2% lower in pre-market trading.
Elsewhere, Hewlett-Packard (HPQ, $40.76, down $0.60) reported earnings of $1.8 billion, or $0.75 a share, versus $1.7 billion, or $0.69 a share, a year ago. Excluding items, the company would have earned $1.08 a share which matched analysts’ estimates. Revenue came in slightly ahead of expectations at $30.7 billion, up from $27.6 billion a year ago.
For the full year, HP expects to match the 4.50 a share Wall Street expects, and have revenue of over $125 billion, slightly higher than the $124.9 billion analysts have on the board.
Despite the relatively decent quarters, futures are pointing towards a lower open. Dow futures are down 37 points to 10,198 while the S&P 500 futures are off by 4 points to 1,067. The Nasdaq 100 futures are lower by 5 points, to 1,814.
Of course, we want the market to go lower because we are leveraged to the short side. Many of our current trades should get another pop this morning. Subscribers, check the Members Area for the updates.
Tags: Dell, HPQ, option picks, stock options trading
Posted in Earnings, Market Analysis | Comments Off
Thursday, August 19th, 2010
2:35pm (EST)
Sorry for the late update folks, but, we were watching the charts to see if support was going to hold today and wanted to wait an extra hour or so before sending this out…
The bulls got a double-whammy this morning and had their hopes of any rally off the Intel (INTC, $18.95, down $0.64) news wiped away after a couple of disappointing economic reports whacked the market.
The first one, weekly jobless claims, was another blow to the labor market and showed initial claims for unemployment benefits rose by 12,000 to 500,000 last week. The market had expected a number south of 478,000 and any number below that would have had the bulls on the run. Make that a stampede…
Another blow to the ego came when the Philly Fed manufacturing survey reported a negative 7.7 print for August after a reading of 5.1 last month. Wall Street was expecting the index to rise this month. And finally, the Conference Board reported its index of leading economic indicators rose 0.1% last month after dropping 0.3% in June. The pencil pushers were expecting a gain of 0.2%.
Earnings were a mixed bag once again with some of the Retailers doing better than others.
Gamestop (GME, $19.12, down $1.64) is down 8% after disappointing analysts with its latest quarterly results. The company reported a profit of $40 million, or $0.26 a share, versus $39 million, or $0.26 a share, in the year earlier period. Revenue came in at $1.8 billion matching analyst’s expectations but they missed by a penny and lowered guidance going forward.
The video game industry has not been strong in recent quarters and interest is waning due the lack of big hit, blockbuster games. There have been a few titles out that have done well but you know when Madden ’11 has already been discounted $10 before the football season starts, sales are struggling. Not a good sign for Electronic Arts (ERTS, $15.88, down $0.45) going forward.
There will be a lot of action after the closing bell today as Aeropostale (ARO, $23.46, down $0.03), Dell (DELL, $12.05, down $0.14), Hewlett-Packard (HPQ, $40.56, down $0.80) and Salesforce.com (CRM, $97.09, down $2.24) will be stepping up to the podium to announce their latest results.
The bulls might be a little depressed today but all of the negative news has been good news for our option trades.
As we head to press, the Dow is off a whopping 171 points, or 1.6%, to 10,246. The S&P is off by 20 points, or 1.9%, and is at 1,073. The Nasdaq is getting punished for a 39 point loss, or 1.8%, and is at 2,176.
Both the S&P 500 and Nasdaq should find support at 1,070 and 2,150 which is why we posted today’s update late. The Dow should find support at 10,200.
These levels have not been violated but the S&P 500 has kissed 1,070. If these levels fail to hold, the selling pressure could intensify going into the close and into Friday. We have updated all of our current trades and we can’t wait to get you inside the Members Area today. Subscribers, check for the updates.
Tags: Dell, GME, GOOG, HPQ, MOT, option picks, RIMM, stock options trading
Posted in Earnings, Economic News, Market Analysis | Comments Off
Friday, June 11th, 2010
1:05pm (EST)
As impressive as yesterday’s rally was, the bulls are getting no follow through after a lousy Retail Sales report dampened their spirits this morning. The market has been choppy but the bears are holding down any remaining bulls trying to go long over the weekend.
Retail sales fell 1.2% in May as the pencil pushers were looking for a rise of 0.4%. The troubling part was the fact that it was the first drop in sales in eight months. Not only that, the numbers came in well short of forecasts as the consumer cuts back.
As a result, the Dow is currently down by 35 points and is at 10,137 while the S&P 500 is lower by 3 points and was last seen at 1,083. The Nasdaq is showing a 6 point pop and is at 2,224.
Some stories we are watching…
We are keeping an eye on Dell (DELL, $13.11, down $0.05) going forward. There is news out today that the SEC is adding its CEO, Michael Dell, to its “usual suspects” list on the company’s business deals with Intel (INTC, $20.59, up $0.04). This will cause the company to delay its 10K filings.
Look, Dell once was a powerhouse but struggles to lead in any market category nowadays. The company has been buying up mom-and-pop businesses to get diversified and grow revenues but it just isn’t working. The 52-week low is $11.84 and that could be in danger.
BP (BP, $33.88, up $1.10) is trading up after saying it would make payments more urgently to people and businesses that have been impacted by the oil spill. However, our friends across the pond are getting a little tired of our strong language towards the company. The lasted talk on the dividend is that the company could place the checks to its shareholders in a separate account that would not be released until a later date. Yeah, like that is going to go over well for both sides.
Next week is options expiration for the June options and we still believe things are setting up for even more volatility. Today’s close will be big for the bulls if they plan to have any chance at taking the market higher next week. Friday’s have not been kind for the bulls and Monday’s have been a double whammy lately. This trend is telling you something so do yourself a favor and read this morning’s 9am write-up just below this article.
We will be back on Sunday night with a look back at the week and what to prepare for next week. Subscribers, check the Members Area for the latest updates on the current trades.
Tags: BP, Dell, momentum options trading, option picks, options alerts, stock options trading
Posted in Market Analysis, Market Commentary | Comments Off
Monday, November 23rd, 2009
12:45pm (EST)
The market is off to a strong start this week and we called it right in the Weekly Wrap last night. Futures were pointing toward a big day and the Dow is currently up 132 points to 10,450. All 30 Dow stocks are showing a gain and the index has traded as high as 10,495 this morning.
The S&P 500 is back over 1,110 and is up 16 points to 1,107. The Nasdaq is up 30 to 2,176.
Hewlett-Packard (HPQ, $50.82, up $0.78) is set to report earnings after the closing bell today. The stock is approaching its 52-week high of $51.43 which was set last week and there is a ton of action in the option pits.
Wall Street expects HP to report earnings of $1.13/ share on revenue of $30.4 billion for the quarter. There are 30 analysts that cover the stock and the high estimate is $1.14 while the low estimate is $1.09. This means there is a lot of room for upside price movement should the company beat expectations.
After the number Dell (DELL, $14.67, up $0.38) posted there could also be the surprise of an earnings miss. We don’t think that is the case as we actually feel HP has been taking Dell’s lunch money. The options look cheap for us to play a possible move to $55 should the stock get some legs to where we might make a double.
Current Subscribers, check the Members Area NOW for the new trade in HP.
Tags: Dell, Hewlett-Packard, momentum stock option trading, Netflix, option trading online, option trading picks, options mentoring, options newsletters, options track record, support and resistance levels, triple-digit option trades
Posted in Company Commentary, Earnings, Market Analysis, Option Trades | Comments Off
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Bulls Look Nervous Ahead Of Weekend
Friday, June 11th, 2010
1:05pm (EST)
As impressive as yesterday’s rally was, the bulls are getting no follow through after a lousy Retail Sales report dampened their spirits this morning. The market has been choppy but the bears are holding down any remaining bulls trying to go long over the weekend.
Retail sales fell 1.2% in May as the pencil pushers were looking for a rise of 0.4%. The troubling part was the fact that it was the first drop in sales in eight months. Not only that, the numbers came in well short of forecasts as the consumer cuts back.
As a result, the Dow is currently down by 35 points and is at 10,137 while the S&P 500 is lower by 3 points and was last seen at 1,083. The Nasdaq is showing a 6 point pop and is at 2,224.
Some stories we are watching…
We are keeping an eye on Dell (DELL, $13.11, down $0.05) going forward. There is news out today that the SEC is adding its CEO, Michael Dell, to its “usual suspects” list on the company’s business deals with Intel (INTC, $20.59, up $0.04). This will cause the company to delay its 10K filings.
Look, Dell once was a powerhouse but struggles to lead in any market category nowadays. The company has been buying up mom-and-pop businesses to get diversified and grow revenues but it just isn’t working. The 52-week low is $11.84 and that could be in danger.
BP (BP, $33.88, up $1.10) is trading up after saying it would make payments more urgently to people and businesses that have been impacted by the oil spill. However, our friends across the pond are getting a little tired of our strong language towards the company. The lasted talk on the dividend is that the company could place the checks to its shareholders in a separate account that would not be released until a later date. Yeah, like that is going to go over well for both sides.
Next week is options expiration for the June options and we still believe things are setting up for even more volatility. Today’s close will be big for the bulls if they plan to have any chance at taking the market higher next week. Friday’s have not been kind for the bulls and Monday’s have been a double whammy lately. This trend is telling you something so do yourself a favor and read this morning’s 9am write-up just below this article.
We will be back on Sunday night with a look back at the week and what to prepare for next week. Subscribers, check the Members Area for the latest updates on the current trades.
Tags: BP, Dell, momentum options trading, option picks, options alerts, stock options trading
Posted in Market Analysis, Market Commentary | Comments Off