Momentum Options Trading Blog
Daily market updates at 9am & 1pm EST
Categories
Archives
Blog Roll

Posts Tagged ‘Netflix’

Will the Fed Fire-Up the Economy?

Tuesday, August 10th, 2010

1:10pm (EST)

The bulls were behind the 8-ball before the opening bell sounded as economic data out of China revealed imports slowed significantly in the latest period due to declining demand and a tightening of monetary policies. 

The news pushed futures significantly below fair value which led to a nasty open.  The bears have done a good job of holding resistance levels, and, perhaps yesterday was another “head fake”.  We have mentioned in the past that resistance (and support) levels can sometimes be “stretched” and that could be the case again today with the Dow down nearly triple-digits ahead of today’s big Fed announcement.

Although we have been trading “light” in recent weeks, we still believe that the market will continue to experience some wild and volatile price swings in the coming months which will present better opportunities to trade. 

We have slowly been positioning ourselves in some bearish trades during the recent market rally over the past few weeks and these trades are on the move today.  Sometimes it is hard to buy puts in a rising market just like it is hard to buy calls in a declining market but this is how you set your trades up for triple-digits returns.  You may not always get the best entry price but the key is to recognize the trend before others do. 

The Dow is currently trading at 10,609, down 90 points.  The S&P 500 is off by 12 points and is at 1,115 while the Nasdaq is lower by 35 points to 2,270. 

Of course, all eyes will be on the Fed and there is a chance for major move in the market once their announcement is released.  We talked about the Fed’s options this morning and given today’s mini sell-off, the bulls are looking for a life jacket.  However, if the Fed doesn’t appear it is going to come to the economic rescue then the bulls will be sinking with today’s ship.

As far as specific stocks, there are a few companies trading higher in an otherwise sea of red.  One of our favorites, Netflix (NFLX, $124.43, up $7.53) is challenging its 52-week high of $127.96, which was set in mid-June, after announcing a deal with Epix that will expand Netflix’s library of movie titles.

nflx081110

Fossil (FOSL, $45.50, up $3.03) is up 7% after beating Wall Street’s earnings estimates.  The company announced a profit of $55 million, or $0.80 a share, versus $17 million, or $0.25 a share, in the year ago quarter.  Revenue jumped nearly 30% to $417 million for the quarter, compared to $316 million, in last year’s period. 

fosl081011

The Fossil August 45 call options (FOSL100821C00045000, $1.45, up $0.75) are up over 100%.

We are getting aggressive with an earnings trade of our own TODAY as we have been eyeballing a company that will report earnings on Friday.  These are cheap out-of-the-money options with the same type of potential as the Fossil call options just mentioned.  Subscribers, check the Members Area for today’s NEW TRADE!

Futures Pointing Towards Strong Open

Thursday, July 22nd, 2010

9:00am (EST)

The market traded north and south of the breakeven line for much of yesterday before taking a skid in the final couple of hours after Federal Reserve Chairman Ben Bernanke started talking.

Wall Street needed to hear only two words before the bears started to name that song.  Big Ben’s “unusually uncertain” lyrics certainly won’t be as famous as “irrational exuberance” (the quote made by Alan Greenspan back in the day), but they were enough to rattle the market.

Bernanke also noted that central bankers were “prepared to take further policy actions as needed” to support a recovery.  These remarks worried the bulls about the current economic recovery, and as a result the market sold-off. 

We mentioned yesterday Ben’s body language would be watched closely, and he looked nervous in the spotlight.  His voice was rather depressing compared to his usual upbeat comments, and it showed.

As a result, the Dow recorded a triple-digit loss of 109 points, or 1.1%, to settle at 10,120.  The index traded to a high of 10,265 while the low was 10,065.  It was the fourth session in-a-row the Dow has flirted with the 10,000 level.   

The S&P 500 fell 14 points, or 1.3%, and closed at 1,069.  The index finished just below the 1,070 level but could be gearing up to challenge 1,100 again this morning. 

The Nasdaq appeared like it was going to be the clear winner on Wednesday but it shed 35 points, or 1.6%, and was last seen at 2,187.  The index will likely make another run at its 200-day moving average of 2,240 as the index traded to a high of 2,236 yesterday and looks poised to do so again today.  Tech also settled back below the 2,200 level which is still capping all rallies on a closing basis.

Turning to earnings, one of our favorite stocks let the Street down in after-hours last night.  Netflix (NFLX, $119.65, down $0.74) failed to live up to the hype after the company topped earnings, but revenue came in light.  The company also gave full-year guidance that also wasn’t up to par as shares are getting hit for a 10-spot this morning in early action.

nflx072210

Netflix reported a profit of $44 million or $0.80 a share, versus $32 million, or $0.54 a share, in the year ago quarter.  Revenue came in at $520, up from $409 million, a year earlier.  Analysts were looking for earnings of $0.71 a share on sales of $524 million so they missed by $4 million or so.

We were expecting a blowout quarter for Netflix and the overall results were golden, but, we were also worried about their top-line numbers as many companies are coming in on the light end.  However, there are also quite a few companies that beat on both the top and bottom line and futures are showing a nice pop.

As we head to press, Dow futures are higher by 109 points to 10,167 while the S&P 500 futures are showing a 14 point pop and are at 1,078.  The Nasdaq 100 futures are up 20 points to 1,835.  Upside targets will be Dow 10,200-10,300; S&P 1,100; and Nasdaq 2,250 this morning.

Bernanke’s Words Help Bulls; Netflix (NFLX) Continues To Shine

Wednesday, June 9th, 2010

1:15pm (EST)

The bulls are having a follow-through day as they are pushing the market higher as Ben Bernanke continues to give an update on the recovering U.S. economy.  He also added that Europe’s woes might only add a “modest” drag to our recovery if the euro can find some support and today, the currency is back over $1.20.

Although the Fed Chairman did says jobs and housing remain weak, the Dow is enjoying another triple-digit gain and is currently up 110 points, or 1.1%, at 10,050.  The S&P 500 is higher by 13 points, or 1.2%, and is at 1,075 while the Nasdaq is enjoying a 30 point surge, or 1.4%, and is at 2,201.

In economic news, Wholesale inventories increased 0.4% in April, while sales rose 0.7%.  Both numbers were pretty much in-line with what the pencil pushers were looking for.

One stock that continues to buck the trend is Netflix (NFLX, $116.38, up $6.05).  We did a big write-up in November 2009 when shares were at $55 and we said at the time we expected the stock to double by June 2010.  In fact, we had a tiger by the tail but we let it go.  At the time, we profiled the Netflix June 80 calls (NFLX100619C00080000, $36.35, up $8.40) when they were at $1.65.

nflx060910

We were stopped out of the call options two weeks later on the Black Friday after Thanksgiving on the Dubai news.  Our 2009 portfolio shows a 24% loss.  Well, if you do the aforementioned math, the return would have been over 2,100% had we kept them open.  Some of our subscribers did… 

Imagine turning $1,650 into $36,000 in a little over 7 months.

The good news is that there are other stocks that could follow Netflix’s path and when we get through this turmoil in the current market place we will be looking at more LEAP options. 

We have a lot to cover today in our Members Area so let’s get on it!  We will be back in the morning with the 9am update.

« Older Entries
Try our directional option picks.
    No fancy spreads. No iron condors. No need to watch the markets all day long.

Year Profits
2010 6.97%
annualized
2009 90.04%
2008 136.01%
Results are NOT compounded.

FREE OPTION PICKS
TRACK RECORD.
Nothing fancy. Just simple calls and puts. Click on PDF links below.

2010 Option
Trading Results

2009 Option
Trading Results

2008 Option
Trading Results

Trader Comments:

    REGINA L.
    I just want you to know that I love the way you write and explain everything. I am new to this, and have lost 50% of my account until I met you guys. Iit is slowly coming back. I will be calling to set up a year
    of membership rather than the one quarter. Thanks again, and LOVE YOU ALL.

    STEVE T.
    Rick, I appreciate the advice. I think I will just sit back and utilize your selections only for awhile. This will obviously save me a great deal of money in commissions. I have gone thru your entire site including the video on money management. This has brought me to the stark realization that I have been trading too much for too little. I definitely have not been "swinging for the fences", but I also think I have been getting impatient with trades and getting out too fast. This has no doubt caused me too trade too much. I like, and definitely agree on, the advice on money management. Thanks for the help.

    SCOTT H.
    Thank you!!! I held on to the NFLX position since Nov. 13 at a cost of $1.89. Sold ½ on April 14th for a 540% return and the other ½ upon earnings for 702% return. Total profit of $11,615 a 621% return. Keep the recommendations coming and thanks to you and your team for the service you provide.

    PETER G.
    Rick & Team, GREAT Call on NKE for my two trading accounts:
    1) Entry at .65, out at 1.45, 1.55 Profit = $415
    2) Entry at .60, out at 1.75, 1.50 Profit = $485

    LAWRENCE O.
    Hey Rick! Here is an update on what your picks have done in my accounts.

    1) Great call on the JoyG March 55. I bought when you said, then bought again on one of the dips. Booked 80+% profit. Made enough to pay for your service for years to come.

    2) Also booked profits on your Berk Feb 74 (80%) and threw a major chunk of change at the March 75’s (190+%). I would have never known that Buffet's stock had split if it weren’t for your service. Bought the shares also for the long haul. Won’t look at them for another 20 years. Great job on getting us in before the indexes did.

    3) Took profit on your Imax March 12.5. 20 cent trailing stop at 1.90 yesterday. Not sure what the profit on that was, but profit is profit.

    I see that you took a loss on some of these. It’s all good. I look to trade your “ideas” not your exact calls. I THANK YOU! For your ideas and commentary. Keep up the good work. And keep those ideas coming.

    C.J.
    Loving this subscription so far! I got into the BRK feb 76 calls the day you talked about right before the split...now up over 300% (0.70 to 2.475)! Keep the good picks coming and let's see some OSIS and EMC upside soon! Just wanted to share my positive enthusiasm on your newsletter...it gives us individual investors great ideas on not only the options market, but also the broader equity market! Case in point is BRK...I can't always read the breaking business news but its easy to read your twice daily updates on my smartphone...helped me get some BRK shares immediately after the split which I will hold for the long haul! Thanks again!

    SHAUN
    Aloha Rick - Thank you so much for the great CL pick. I am not sure if there was buy-out/merger news or what but at 3PM today Colgate-Palmolive absolutely EXPLODED to the upside, and my calls turned into green candy when they went from 1.40 to 3.8 in a matter of seconds! I even sold a few for over 4.0! Much thanks and keep the solid picks up my friend, honestly. Only a fool would scoff at 267% gains... Peace!

    MICHAEL K.
    I like the fact that you ask for comments from subscribers. Good customer service. By the way, am enjoying the service so far. Some good
    profitable calls. Keep up the good work.

    PARAG P.
    Woo hoo! Out for 50% on WMT this am. Making up for my depression for getting out of pcln for a 30% gain monday :( you the man! any word on the manual? My friend Mike ( who I sent to your service) told me he emailed you about your integrity in reporting fills. I echo that sentiment big time.. keep it up! Cheers!

    JAY P.
    Hi Rick, as a new member all I can say is, 'show off' LOL, with PCLN.

    MIKE
    Rick, I am a new subscriber to your service, and I want to say I am impressed. I am impressed by your results, but more than that I am impressed by your reporting of your fills. You could have easily said you got that Wal-Mart call today for 80 cents, instead you reported 98 cents! Good job and keep it up, I watched the reporting of the fills first, and then I subscribed. Thank You.

    TRISH D.
    Hi, good morning. I jumped the gun a little on this one (PCLN). But still made $1,675.00 profit!! Very happy!! Keep up the good work!! Thanks.

    MIN L.
    Hi there, I have joined recently, and I am very happy to tell you that I am up over $10,000 on your picks in a month. I started on 10/7 with the Intel pick. I'll be your member for life. Please don't quit on us. Also, I am learning a lot about options. I didn’t get in your recent APOL and that gold trade and only had one loss on CHK. I appreciate all the DD you do. I enjoy your market commentaries. Best advice site period, and I have tried a few here and there. Again, you guys rock!

    JOE G.
    Thanks be to Momentum Options Trading for providing me with some fantastic wins. I just started with this service and am up nearly 50% in less than a month. There have been losses, but if I manage them properly, I will continue the best efforts given on the blog (in which there are no complaints). What a great cause for humanity. I feel more confident about my trades and continue to play the wins. Best of all, I am now keeping my regular paychecks in the bank! Thank you!

    GREG F.
    Rick - I wanted to say thanks for getting me started on the right foot with your service. I have made six trades since starting on October 22, 2009. Five are winners and One loser netting me $6,245. Thanks again and keep the trade recommendations coming.

    NOEL
    I got into the Nike 60 Call at 1.85, sold at 5.00, also bought a 55 put at 1.05, but got stopped out at .35. What a ride! $2830.00 in the black even with the put. It's right at 100% return. I hope earnings season coming up is going to look like this trade.

    TODD F.
    Nice call on Nike. I think I'll go buy a pair with my profits! : ) I did the straddle for safety but still made 62% on the trade. Not bad for less than 24 hours. If Goldman is right, then the Nov 70s or 75's could be a steal today.

    PAUL H.
    What a sweet way to get introduced to Momentum. My first trade based on your picks and it a 2X. Thank you!

    NOEL
    “Limit order was set at 1.60 on RIMM so it sold. I may have left some money on the table but you can't go broke making a profit. That was a fun trade. Thank you. Good call. I’ve been watching and trading Rick's advice since March. It’s usually a fun ride, but I give him heck when it's wrong to. :) ”

    CHRISTIAN
    “Your service rocks! I made bank on Dendreon last week! The other thing I have to say is that it took me quite a while to find a REAL options trading service like yours. Most of what’s out there is 99% scam and very sketchy. Momentum Options Trading is the first service I found that I can trust and seriously make money with.”

    JOHN
    “I made $420.00 on ANF in 2 days. Thanks for the trade and updates on getting out of the trade.”

    CHARLES M.
    “I did follow a lot of your trades with 1-2 contracts per trade and YTD I’m up 108%. I try not to follow blindly by not entering all of your trades and sometimes entering the ones you don’t. I entered AIG a few weeks ago against recommendation – that one hurt.”

    BRYAN C.
    “I have been following you for several months and am interested in the new service. I hate to see the free service go away but as they say, “all good things must come to an end”. My ability to join will be greatly influenced by the monthly fee so I’m very curious to see the new prices. Thanks for making April a great month for me and my family.”

    JOHN H.
    “I have really enjoyed the past month since finding your blog. You have made some great calls. I would appreciate info. on the new options mentoring program. Thanks.”

    JEFFREY
    “Hi Rick, I have been following your blog for several months now and I would like to be including on the list for your new service and to receive more information about it. And yes I was a Dendreon winner with your tips. Turned $280 into $7700, and literally saved my butt.”

    ED
    “I made over 6k on your Dendreon trade, and I’m very interested in learning how you pick and trade options. Sign me up.”

    GREG
    “Rick – Wow what a day! I got in at the Dendreon calls at $2.25. Thanks to for your advice. I appreciate that. This company has a lock on this type of therapy and no one else in the world is close. Kind of reminds me of the type of companies that Peter Lynch and Warren Buffet suggest that investments be made in. Companies that can build a moat around their business model, that allows them to charge a premium for their product or service. In other words - a monopoly.”

    KEN
    “Hi Rick, Thank you so much for the Dendreon trade, I made almost $10,000 with that trade with a little over $2,000 investment. You have shown me the power of options trading. Again, thank you so much for all your inputs.”

    GARETT
    “Hi Rick, thanks for the encouragement to play the dendreon calls! did freaking great! Got in the first lot at $1.44 on 3-24-09, sold at $2.45, 70% not bad. Bought it back at $2.30 on 4-7-09 closed out on 4-14-09 for 454% gain! Wow! I love it when that happens. So, thanks the encouragement to get back in when others were saying sell, sell, sell. Keep up the good work.”

    TERENCE
    “Rick – Thanks for Dendreon – it has made all the headlines today! I missed on RIMM earlier, but I’ve been holding onto DNDN calls since 3rd week March. Of course today it all paid off today, as DNDN rocketed up.”

Follow us on Twitter