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1:15pm (EST)
The market has traded in a tight range today despite some positive catalysts from the Financial sector. Better-than-expected earnings from Morgan Stanley (MS, $32.10, up $1.65), which is up over 4%, is lifting other names in the sector but there other areas of the market that are dragging us down.
Apple (AAPL, $258.05, up $13.46) is holding its gains but it’s not helping the Nasdaq.
There are pockets of strength as we go to press with the Dow up 4 points to 11,121 while the S&P is off a point to 1,206. The Nasdaq has is up a fraction and stands at 2,500.
One stock that is challenging its 52-week high is Imax (IMAX, $19.39, up $0.70) which is no stranger to this blog. We have been telling our subscribers about this gem for 3 years now and you will see we like playing the stock if you look at our track records.
The company announced another deal in Japan yesterday and continues to expand in China as movie-goers prepare for the onslaught of upcoming 3-D films.
We set a long-term price target of $20 on the stock last fall when shares were just breaking out into the teens. It looks like we may have to raise that to $25 over the next 6 months.
Another company we had high hopes for back in November was Netflix (NFLX, $86.24, down $0.83) which was at $58 when we said shares could reach $100 by June. Here were our thoughts from the Members Area on 11/13/09 (quotes from that day):
“Netflix (NFLX, $58.19, down $1.25) is a company we are watching because it has the look and feel of a stock that wants to go to $100. Right now it’s at 52-week highs and we are waiting for a break above $60. Nice round number huh? Well, the exact 52-week high is $59.89 and a break above $60 could lead to more momentum.
For high risk traders, you could play the November calls for a day trade or longer but realize these options expire next Friday. The safer play would be to look at the December calls. If Netflix does break $60 then we may send out an alert based on market conditions.
One interesting thing and here is where our new trade comes into play.
If Netflix could manage to make a run to $100 by June 2010 then we will do very well with this trade. The big reason we think the stock could go to $100 by next summer is due the serious sense it makes for someone to buy them.” (END)
Netflix will report earnings after the bell so we will have to wait to see if our prediction comes to fruition.
We have updated our current trades and a number of them are doing well today. Subscribers, check the Members Area for the update.
McDonald’s Is Lovin’ It
Monday, August 9th, 2010
12:50pm (EST)
The bulls have kept the market in positive territory for the majority of the session although the bears sniffed red shortly after the open. The Dow and S&P 500 briefly slipped into negative ground but quickly bounded off their lows and are challenging key resistance levels once again.
The Dow is currently up 35 points to 10,688 and has traded as high as 10,696. The S&P is up 4 points and is trading at 1,125 while the Nasdaq is higher by 10 points to 2,298.
The Dow could challenge 10,800 if it can get above 10,700. If the S&P can clear 1,125-1,130 then there is an air pocket up to 1,150 which is the upper end of our current target for the index. The Nasdaq is trying to clear 2,300 and make a run at 2,350 but continues to struggle with this level.
We still believe any sustained rally will depend on how the financial stocks trade and the trend is still lower for the sector. Bank of America (BAC, $13.84, down $0.12) is near its 52-week low of $13.30; Morgan Stanley (MS, $27.42, down $0.23) and JPMorgan Chase (JPM, $40.04, down $0.40) both continue to trade lower…
McDonald’s (MCD, $73.03, up $1.29) is up nearly 2% after reporting great same-store sales numbers and posting its biggest monthly increase in U.S. sales in more than a year.
The company said sales jumped 5.7% in the U.S. and Europe sales were strong as they rose 5.3%. Overall, global sales climbed 7%. Mickey D’s is benefitting from its new fruit smoothies and frappes which seem to be going over well with customers during these hot summer months.
The Fed will talk on Tuesday so look for the indexes to continue to test resistance or trend lower for the rest of the session. Subscribers, check the Members Area for the latest updates.
Tags: bac, call options, GS, how to trade options, JPM, MCD, momentum options trading, Momentum stocks, MS, option picks, option stock picks, options alerts, options newsletter, options track record, put options, stock options trading, volatile options
Posted in Company Commentary, Financial Stocks, Market Analysis, Market Commentary | Comments Off