11:10am (EST)
We were betting on a good housing number this morning and we got it.
The Commerce Department reported sales rose 6.2% to a seasonally adjusted annual rate of 430,000 from an upwardly revised 405,000 in September. Wall Street had expected a number of 410,000.
The surge in sales was driven mostly by a 23% increase in the South. Sales fell 5% in the West and Northeast, and a whopping 20% in the Midwest but overall, the report was well received. We did our research last night and we were seeing some things that had us pretty bullish.
As a result, most of the homebuilding stocks we follow got a lift. KB Home (KB, $13.87, up $0.13), Lennar (LEN, $13.18, up $0.14), Pulte Homes (PHM, $9.43, up $0.13) and Toll Brothers (TOL, $19.53, up $0.03) are all showing slight gains.
The Dow didn’t quite get the pop we were expecting this morning at the open but the index is still up 24 points to 10,458. The S&P 500 is currently higher by 2 to 1,108 while the Nasdaq is showing a 7 point gain and is at 2,176.
We also note that gold is still hot…the yellow metal is up another $14 to $1,179/ ounce.
We wanted to get today’s update out a little early because we know many of you are headed out for the holidays. We will be back Friday morning with our next update and we hope all of you have a Great Thanksgiving! Stay long and strong…












A123 Systems Jumps 17%
Wednesday, November 25th, 2009
9:00am (EST)
To quote a famous football coach of the Green Bay Packers back in the day…
“What the hell is going on around here?”…
We did a big write-up on A123 Systems (AONE, $17.09, up $2.56) yesterday at 12:45pm when the stock was at $14.75 and shortly after 1pm the stock started soaring. There was no specific news so we are not sure of why the shares surged 17% after we profiled the company.
We did NOT list any call options but if you looked up the stock quote shortly after our update then please email us and say you were able to get into the December 17.50 calls (ZKQLW, $0.95, up $0.80) at lower prices.
Folks, these call options OPENED at 20 cents and traded to a low of 15 cents before ZOOMING over 500% yesterday! The option activity was brisk as nearly 5,000 contracts traded hands. Incredible.
We wish we could take credit for the trade and maybe it was our loyal readers who started to take positions but again, we didn’t list these options as a trade. The only “catalyst” out there could be the news that U.S. electric sports car maker Tesla Motors plans to go public soon.
In any event, we were thisclose to hitting a homerun this week but keep an eye on these call options. We still don’t know where they will end up but consider it a free trade if it does well from here (sly grin). If the stock falls back to $14 then maybe we ”strangle” it with an option trade to capture the volatility for some nice profits.
We have been trying to catch A123 but the price action is hard to predict given the shares have only been trading for a few months. The company’s stock climbed to nearly $20 on the first day of trading (September 24th), a 45% increase from its IPO price of $14. Two weeks later, it made a high of $28.20.
These are the types of stocks we LOVE to trade but we have to be careful with the swings.
Breaking economic news…
Weekly Jobless claims dropped 35,000 for the week ending 11/21 to 466,000, October personal income was up 0.2% and personal spending was up 0.7%. One negative was the durable goods order which came in at -0.6%.
Futures were already higher before the rash of economic news and held up strong following the reports. Dow futures are currently up 63 points to 10,468 while the S&P 500 futures are up 7 to 1,110. Nasdaq 100 futures are up 10 1,796.
We do profile a NEW TRADE this morning and we like its potential for a double. The trade is a play on the housing sector. Current subscribers, please check the Members Area NOW for the trade updates as well…
Tags: A123 Systems, American International Group, Apple, momentum stock option trading, Moody’s, 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, Hot Stocks, Market Analysis, Option Trades | Comments Off