12:15pm (EST)
Wall Street Notes:
Facebook (FB, $27.33, down $0.86) Weekly Options started trading today. There has been more put buying than call buying since shares went public. In eight trading sessions, shares have ended lower in 5 of them. Today would make 6-out-of-9. We have been watching the options and an easy read will be to buy calls once shares break $30 again but the Debbie Downers will tell you that ain’t happening anytime soon.
We were fortunate enough to witness the Google (GOOG, $580.05, down $8.18) IPO years ago and we did well recommending the call options on earnings announcements. The company was so young and everyone on Wall Street was betting against them and wondering how they were going to make money.
Of course, Facebook is a different mutant but we wouldn’t be surprised if shares hit $50 by the end of the year but $20 over the near-term.
Can you imagine what would happen with all of the current lawsuits if shares rebound by yearend? Then again, if Facebook can’t capitalize on its 900 million users, the plaintiffs will have a good case. The company is expected to earn 15 cents a share on $1.2 billion in sales for the current quarter. We should get a better direction on where shares are headed once they report in July but until then it’s anybody’s guess.
RealD (RLD, $11.27, down $0.34) reports earnings after the close and we are expecting a big move in the stock. The company has reported good quarters over the last year but is expected to post a loss in its most recent quarter. We think the loss could be bigger than expected but there have been a few successful 3D movies this year.
The company makes its money off the glasses used to watch the movies in a revenue sharing system it has with the theaters. Sony (SNE, $13.15, up $0.12) is now making its own 3D glasses to distribute with its films and let’s not forget there have also been some 3D flops so there are risks to the company’s business model.
As far as the market, the bears are pushing support and the bulls will need a good nonfarm payrolls report tomorrow to stop the bleeding.
The Dow is down 57 points to 12,362 while the S&P is lower by 10 points to 1,303. The Nasdaq is showing a decline of 26 points and is at 2,811. We have a lot to cover today as some of our current trades are getting nice pops.
Subscribers, check the Members Area for the updates and stay lock-and-loaded in case we take profits or see something else we like.











Bulls Rally Getting Stronger
Thursday, June 9th, 2011
12:15pm (EST)
The market is getting a little pop today and time will tell if today’s gains hold into the close and for the rest of the week. The bulls are breathing fresh air after being held underwater for what seems like eternity and are pushing resistance which was prior support.
Economic news was a “half full/ half empty” feeling. Initial claims came in at 427,000 versus estimates for of 419,000. Continuing Claims were projected at 3.7 million and came in at 3.68 million. Of course, we would have liked to have seen a print below 400,000 for initial claims but the reaction was muted after the market got good news on the U.S. Trade Balance.
The trade deficit for April was $43.7 billion, which was less than the $48.7 billion deficit that had been penciled in. Exports increased by 1.3% for April after coming in at 4.9% in March.
In earnings news, J.M. Smucker (SJM, $77.77, up $1.38) is trading higher after beating Wall Street’s expectations. The company reported a profit of $95 million, or $0.82 a share, versus $121 million, or $1.01 a share, in the year-ago period. However, after adjusting for its acquisition of Rowland Coffee Roasters and other restructuring costs, the company actually earned $1 a share for the quarter. Revenue came in at $1.19 billion.
Analysts were looking for $0.99 a share on revenue of $1.17 billion.
After the close, RealD (RLD, $24.67, up $0.80) and Thor Industries (THO, $30.05, down $0.15) will report earnings and before Friday’s open, Lululemon Athletica (LULU, $84.18, down $0.16) will announce their quarterly results.
As we head into the second half of trading, the Dow is up 117 points to 12,166 while the S&P is higher by 12 points to 1,291. The Nasdaq is advancing by 11 points to 2,686. We released a new trade this morning so let’s get to the updates inside the Members Area.
Tags: call options, high beta stocks, Hot stocks, LULU earnings, momentum options, Momentum stocks, NASDAQ: LULU, option tips, options, options mentoring, options trading course, RealD, RLD, stock market options, weekly options
Posted in Earnings, Market Commentary | Comments Off