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Posts Tagged ‘U.S. Steel’

Market Heads Lower As Bears Start Strong

Tuesday, September 7th, 2010

12:50pm (EST)

The bears are trying to get back Friday’s triple-digit win by the bulls and so far they are doing a pretty good job.  Futures were already pointing towards a lower open and the market has been a steady decline since the open.  The euro is weaker on the bank “stress test” news while China, the world’s largest producer and user of steel, said it is temporarily cutting its steel production.

The Financial and Energy sectors are seeing some increased selling pressure as both are trading lower.  U.S. Financial stocks are down nearly 2% due to the weakness in the European Bank stocks, which tumbled on concerns about the health of their balance sheets.  Bank of America (BAC, $13.25, down $0.25), Capital One (COF, $39.45, down $1.24) and Wells Fargo (WFC, $25.25, down $0.59) are all trading lower as a result.

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China halted its production of steel during the seasonally busy September-October period as the use of electrical power slipped due to efficiency goals. The move has been a lift to U.S. Steel stocks today as some analysts feel “spot product pricing” will be good for steel manufacturers going forward. U.S. Steel (X, $47.79, up $1.80) is up nearly 4% on the news and is making a run at breaking out above its 200-day moving average.

Meanwhile, President Obama plans to introduce a $50 billion infrastructure package and an extension of the research and development tax credit by as early as Wednesday.  He is expected to propose a $200 billion tax credit for businesses spending on new plant and equipment with write-offs up to 100%.

As we head to press, the Dow is down 84 points, to 10,363.  The S&P 500 is down 6 ticks to 1,095 while the Nasdaq down 20 points to 2,213.

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Gold is up $8 to $1,259/ ounce while oil is slipping 72 cents and is at $73.88 a barrel.

This week is shaping up to favor the bears and the sentiment is negative.  The key levels to watch for today will be Dow 10,350; S&P 1,095; Nasdaq 2,200.  If these levels fail then we could see a quick test back to support levels. 

We have added a few more stocks to our Watch List with possible option trades as we look to capitalize on the current volatility.  Although we are currently “full” with current trades, we do see some opportunities for some quick ones as there are a couple of earnings announcements we are following closely.

Subscribers, check for the updates on all of our current trades and we will see everyone on Tuesday morning at 9am (EST) sharp.

Apple (AAPL) Moving In On RIMM’s Turf

Tuesday, July 27th, 2010

12:50pm (EST)

The market is mixed after getting off to a good start but less than stellar economic news has cooled the enthusiasm.  Earnings continue to dominate the headlines but the bulls are having trouble breaking through the upper resistance levels we outlined in the morning update.

The consumer confidence report came in at 50.4 for July which was only slightly below expectations of 51 but down from last month’s reading of 54.3.  However, to put things in perspective, the decline follows last month’s nearly 10-point drop, from 62.7 in May.  This report takes a pulse of the American consumer on how they feel about the economy, jobs and their outlook and it clearly shows they are still holding back on spending.

Elsewhere, the Standard & Poor’s/Case-Shiller 20-city home price index posted a 1.3% increase in May from April as 19 of 20 cities showed price gains month over month.  Of course, this was helped by the federal tax incentives which attracted some buyers into the market but we expect prices to remain flat or down for housing over the next six months.

Turning to earnings, Dupont (DD, $40.52, up $1.53) is up 4% after reporting better-than-expected results.  The company said profits came in at $1.2 billion, or $1.26 a share, versus $417 million, or $0.41 a share, in the year-ago period. 

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Revenue jumped 25% to $8.6 billion while analysts were expecting $8.3 billion/ $0.94 a share.  DuPont also raised its 2010 earnings forecast to $2.90-$3.05 a share, up from $2.50-$2.70 and above Wall Street’s expectations of $2.64 a share.

U.S. Steel (X, $45.93, down $2.96) is getting pounded and is down 6% today after reporting a negative numbers for its most recent quarter.  Before the open, the company reported a loss of $25 million, or $0.17 a share, versus a loss of $392 million, or $2.92 a share, in the year-ago period.  Revenue rose to $4.7 billion from $2.1 billion.  Excluding items, U.S. Steel would have earned $0.45 a share but blamed the weakening of the euro against the dollar during the quarter for the miss.

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And this just in, Apple (AAPL, $262.69, up $3.41) plans to sell an unlocked iPhone 4 in Canada starting on Friday.  The company is moving in Research In Motion’s (RIMM, $53.82, down $1.71) own backyard and plans to allow customers to shop around for a service plan.

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As we head to press, the Dow is currently holding a slight gain of 27 points and is at 10,552 while the S&P 500 is up a point to 1,116.  The Nasdaq is lower by 4 points and is at 2,292.  Upside targets are Dow 10,600; S&P 1,125; and Nasdaq 2,300.  To the downside look for Dow 10,400, S&P 1,100; and Nasdaq 2,250.

We will be back in the morning with another full update at 9am.  We have updated our current trades as we have one company reporting earnings before the bell on Wednesday.  Subscribers, check the Members Area for our latest comments.  

Eye On The Prize

Thursday, January 7th, 2010

9:00am (EST)

It is amazing the price swings stocks and options can go through.  The best part about being an option trader is that there is always a trade out there.  With so many sectors and ways to use options, the possibilities are endless as sectors get hold or cold and investors rotate money around.  That is all there is to it, folks. 

The key of course is figuring out where the money is going before the rest of the crowd…

We knew the start of 2010 would be a make or break month for the market and after a big pop on Monday, we have been flat for two days.  The Dow finished Wednesday with a 2 point gain and closed at 10,573 while the S&P 500 added 1 point to settle at 1,137.  The Nasdaq finished with a 7 point decline and went to bed at 2,301.

Despite the “lack of action” in the overall market there are several stocks making new highs and interesting stories developing in others.  We keep a lot of notes and sometimes we find trades that look good on paper but don’t start off quite the way we would like.

For instance, we profiled a U.S Steel (X, $60.40, up $2.47) option trade back on September 28, 2009 when the stock was at $46 and when of our first sentences were “There are conflicting reports on just how strong demand is for steel but August showed steel output actually increased.”

We were trying to get a jump on an option trade because we felt U.S. Steel would set new highs by January 2010.  However, we knew the road would be rocky. 

The trade was slightly profitable but we shut it down because of Goldman Sachs came out and downgraded the sector the very next day.  U.S. Steel was pushing $47.  Here is what we told our subscribers in our Members Area:  

“Folks, we got bit by the Goldman Sachs whammy as they downgraded the steel sector on Monday.  I did not see the news until late in the afternoon.  It was just a few weeks ago Goldman loved U.S. Steel and had a price target of $50 for the stock which was hit last week several times.  It seems although production was up like I had mentioned, prices are falling.  

I am normally not this quick to pull the trigger on a trade but Goldman’s words carry weight and that could send the stock back under $45.  As such, raise the stop and lower the exit target.  We may not reach $3 and if you can get out with a small gain or break even, CLOSE the trade.  If the call options get cheaper, we may revisit the story.” (END)

A week later the stock was at $40 so we made the right call by getting out of the trade.  It got even worse for U.S. Steel as the stock dropped to a low of $33 by the first week of November. 

At the time, we profiled the January 55 calls (XAK, $5.85, up $2.30) which were at $2.55 but soared a whopping 70% yesterday as the stock set a new 52-week high.  The options were probably under 50 cents and left for dead back in November but as you can see, options can and do go on wild price swings over the life of their expiration.

Steel got hot, then cold, and now it’s white hot again.  Wall Street will take us out of some great trades from time to time but if you know how the system works then you can use it to you advantage.  By that we mean sectors are always falling in and out of favor with the Street and the analyst’s upgrades and downgrades do move them.  Sometimes these ratings help your trades and sometimes they don’t.  We may have missed a double on our option trade but it just proves our “thesis” was right on.

Another stock waking up from the dead is JDS Uniphase (JDSU, $8.92, up $0.43) which also set a 52-week high yesterday.  The company makes communications equipment and testing instruments, as well as optical components for machines such as photocopiers and scanners. 

Ten years ago this stock would hit hit triple-digits and split like clockwork.  Well, we don’t think it will hit triple-digits anytime soon but we do see double-digits.  We are looking at a possible option trade for JDSU this morning but we want to do some more research before jumping in. 

We already have quite a few open trades in our 2010 portfolio that are doing well but we don’t want to lose sight of a possible good trade…

A couple of drug stock making some noise this morning…Vivus (VVUS, $9.23, down $0.09) is up nearly 7% in pre-market trading to $9.90 and Dendreon (DNDN, $29.41, up $1.27) is over $30 again.

Dendreon’s 52-week high is $30.42 which has been hit twice meaning the “double-top” that has formed over the past six-months could be broken.  The stock has traded between $25-$30 since April, after exploding from $4, and is due another breakout.

We have been mentioning the drug candidates for Vivus and we said this stock could hit double-digits quickly based on its strong pipeline.  That could happen today. 

Retailers will also be on the move as retail sales came in better-than-expected.

As we head to press, Dow futures are lower by 22 points to 10,494.  Current subscribers, check the Members Area for today’s important trade updates.

MomentumOptionsTrading Mid-Day Update For 9/28/09

Monday, September 28th, 2009

12:30 pm (EST)

The bulls are in charge today as they have taken a number of positive developments to move the market higher.  Mergers and acquisitions are the rave today as Abbott (ABT, $49.00, up $1.67) announced that it will acquire Solvay’s pharmaceuticals business for $6.6 billion ($4.5 billion euro) in cash.

Xerox (XRX, $7.41, down $1.56) has made a pitch for Affiliated Computer Services (ACS, $53.35, up $6.10).  It is a cash and stock deal valued at $63.00 per share or $6.4 billion as of the closing price of Xerox’s stock price from last Friday.  ACS shareholders will receive a total of $18.60 per share in cash plus nearly 5 Xerox shares for each ACS share they own.

There were plenty of upgrades today that have also given the market a lift.  Barclays upgraded Cisco (CSCO, $23.83, up $1.21) from “Equal Weight” to “Overweight” and raised its price target from $24 to $28.

ViroPharma (VPHM, $9.75, up $0.80) got an upgrade from “Perform” to “Outperform” and a new price target of $13.

Accenture (ACN, $37.79, up $1.67) is up 5% after it got upgraded from “Hold” to “Buy” with a $45 price target.
General Dynamics (GD, $64.42, up $1.43) was raised from “Hold” to “Buy”, as well, with a target of $78.

And finally, U.S. Steel (X, $47.09, up $0.46) has turned positive after spending much of the morning in the red.  Current subscribers can check the Members Area for the latest option trade for U.S Steel.

Rick@MomentumOptionsTrading.com

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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.”

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