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1:35pm (EST)
Lots of good happenings today, folks.
We had a little trouble sleeping last night in anticipation of this morning’s nonfarm payrolls numbers. Futures were up overnight by about 0.2% and we had a pretty good feeling this morning that the bulls would push the tippy-top of resistance. The headlines for today’s unemployment report will be debated but we could care less. All we care about is price action and we said to stay long and strong.
The Dow is up 77 points to 12,396 and has kissed 12,416. The February and 52-week high is 12,423.
The S&P is higher by 9 points 1,335 while the Nasdaq is showing a 16 point pop and is at 2,797 but has touched 2,802.
The rally up to resistance is a strong indication the bulls will probably push our next set of targets for the market and we will go over them this weekend. We will also be doing a video for our course members who have purchased our trading manual, How to Trade Options on Momentum Stocks, either this weekend or next.
For those of you who have been in our “mentoring” program, these videos are designed to help you find your own option trades and to understand where the market could be headed over the short and long-term. We also cover possible trades, different option strategies and some chart work.
The start of 1Q earnings season is just around the corner and it is one of the best times to look for trades. Each week in our Weekly Wrap we highlight the companies that we think will move 5%-10% and we show you how to find call or put option trades to take advantage of the possible price swings in our videos.
Alcoa (AA, $17.57, down $0.09) will announce earnings on April 11 which ”officially” starts the season so we have all of next week to start getting ready for our trade setups. We currently have Alcoa on our Watch List as we feel shares could push $19-$20 on a good announcement.
The cost of our trading manual and video courses have been low because we wanted to give everyone the opportunity to get the options manual at an incredible price and for those of you who have supported us through the years. This weekend, the price is going up and we won’t be offering anymore deals as we start to promote the course more aggressively.
Currently, you can get our option course at no charge (shipping included) if you subscribe to a 1-year membership to our Weekly or Daily newsletter. Again, this will be our last weekend offering this promotion.
We are also going to cover WEEKLY options in our next video. We recommended our first trade with these types of options on Monday. We recommended the Potash (POT, $60.77, up $1.84) April 60 calls (POT110401C00060000, $0.71, up $0.50) at 33 cents and closed the trade yesterday for a small profit.
We were a little nervous that the $60 level would be tough to crack so we decided to get out of the trade and try again next week. As you can see, these options are up over 200% today and had traded down to 10 cents on Wednesday. Today they have traded up to 94 cents.
The reason we went with this trade and closed it yesterday is because it was part of our PLAN. Before we got into the trade we said to ourselves it would be a play on Mosaic’s (MOS, $81.13, up $2.38) earnings (which blew away Wall Street’s estimates yesterday). We thought Potash would easily break $60 if Mosaic popped 5%-10% but they didn’t. We also knew if Mosaic would have moved this much, Potash would have followed and we would have been out of the trade before Friday and the jobs report.
In any event, we blew it, to a degree, because we closed the trade a day early but the more important thing is that we followed our plan. However, there are over 50 stocks that trade Weekly options and we will cover that list in our video. You can bet we will hit a big trade like this one, soon.
We have a lot to cover in our Members Area, including a NEW TRADE, so we have to roll but we wanted to make you aware of our offer. We will be back Sunday night with the Weekly Wrap which has become a big hit with covered call investors. These trades are designed to make 5%-10% every month or two which adds up over a year.
Have a good weekend everyone and we expect the rally to continue into next week with new highs on the horizon.
Research In Motion (RIMM) Continues Downward Trend
Monday, August 23rd, 2010
12:45pm (EST)
The bulls took the major indexes higher at the open but thing started to change after an hour of trading. The Dow was showing an 80 point pop but slipped into negative territory after drifting lower as we head towards the second half of trading.
The bears were patient as the bulls lacked any real conviction and there is no major economic news due out today. Earnings are light as companies start to close the books on 2Q earnings and look ahead to 3Q’s numbers. As a result, the major averages are hugging the flat line as both the bulls and bears feel each other out.
The Dow is currently up 11 points to 10,225 but has traded to a low of 10,191 and below our intermediate target of 10,200. We said last night the bears will be taking a shot a Dow 10,000 and that appears to be a good possibility this week.
The S&P is showing a gain of 2 points and is at 1,074 while the Nasdaq is lower by 7 points to 2,172.
Other tidbits from today’s action:
From time to time, we like to voice our opinion on analyst’s upgrades and downgrades on stocks. Today’s head scratcher comes from Deutsche Bank (DB, $65.11, up $0.17) which downgraded shares of Baidu (BIDU, $79.70, down $2.47) this morning.
DB lowered its rating to Hold from Buy but raised the price target to $86 from $80. Shares closed at $82 on Friday so, technically, weren’t shares a Buy if they raised their price target?
Research In Motion (RIMM, $47.83, down $0.89) continues to gravitate towards its 52-week low and could be headed for real trouble. Our channel checks are showing the Torch is not keeping pace with the other “smartphones” and RIMM is losing market share at an alarming rate.
Mosaic (MOS, $59.01, up $2.37) continues to spit fire while Potash (POT, $151.52, up $1.85) stays smoking hot. We did a big write-up in our Weekly Wrap on the Agriculture sector last night for those of you who may have missed it and want to hear our thoughts.
We have a lot to cover in our Members Area so let’s get to it! Subscribers, check for today’s updates.
Tags: BIDU, MOS, option picks, POT, RIMM, stock options trading
Posted in Company Commentary, Hot Stocks, Market Commentary | Comments Off