Latest EntryJul 23, 2010 Company News, Mergers & Acquisition Leave a comment
Shares of biotech company Genzyme (GENZ) are rallying $10.50 to $64.67, on word that the company was approached by Sanofi-Aventis (SNY). Genzyme shares at 1:36 pm, are currently the best performing stock in the S&P 500 index on a percentage basis.
Jul 22, 2010 Options, Trading Idea Leave a comment
We’ve sent out a buy alert on the Devon Energy (DVN) August 62.50 calls to subscribers of our Options Capitalist service. We are looking for a continuation of the upward momentum in crude oil prices, which will be beneficial for energy stocks.
Jul 21, 2010 Options, Stocks, Technical Analysis Leave a comment
Cummins Inc (CMI) is up $1.51 to $74.05, currently one of the strongest performers among S&P 500 stocks. However, the stock will form a double top if continues to advance and hits its next resistance area of $75. Traders might want to look at shorting the stock above $74.50 or selling call the September 85 calls, which are asking $1.20.
Jul 21, 2010 Company News, Earnings, Stock to watch Leave a comment
Apple (AAPL) announced bettered than expected second quarter results after the bell yesterday, sending the shares up $9.09 in pre-market trading today.
Apple reported that in the period, it had revenue of $15.7 billion, compared to revenue of $9.73 billion in the year ago second quarter period. Profit came in at $3.25 billion or $3.51 on a per share basis, compared to quarterly profit of $1.83 billion or $2.01 per share in Q2 2009. Analysts had been forecasting revenue of $14.7 billion and earnings per share of $3.11.
For the current quarter, the company is forecasting revenue of $18 billion, against analysts’ forecasts of $17 billion and earnings of $3.44 per share, against analysts’ forecasts of $3.83.
In the period, Apple sold 8.4 million iPhones, up 61 percent from last year, 3.3 million iPads, 1.7 milion of the company’s latest iPhone, which just went on the market towards the end of the quarter and 3.47 million Macs, a 33% increase and 9.41 million iPods, which was an eight percent decline in unit sales.
Apple shares are up $9.37 or 3.72% on the news in pre-market trading this morning.
Jul 16, 2010 Options Leave a comment
On June 25, we sent out a trading alert to subscribers of our Navivest Options Writer service, recommending they sell (write) the Goldman Sachs (GS) July 155 calls. From a technical analysis standpoint, we felt the stock would have a hard time clearing the $140 area and if that happened, $150 would also prove to be a strong resistance area as well, before the options expired, making the stock a very good candidate for writing options on. There was also the overhang of the fraud charges by the SEC over the company.
We got $2.04 for each call we sold and the recommendation proved correct, as through July 13, the stock never broke above $141.
Towards the end of the trading session yesterday, during the last thirty minutes, the stock started surging on word that the company had reached a settlement agreement with the SEC over the fraud charges and the stock ended up climbing $6.16 to close at $145.22.
After hours, the stock kept rallying, touching $152. Today, in early going, the stock is now at $149.55, up $4.33. With July options expiring today, even with the big gain in the stock, it looks unlikely that the stock will climb above $155 and get called away on us, making this another winner for the Navivest Options Writer service.
With 80% of all options expiring worthless, writing calls is a great way to put the odds in your favor when trading options, as highlighted by this trade.
Jul 14, 2010 Stock Market, Stocks Comments Off
The stock market has been on a tear of late, with the major indices having closed higher in each of the last six sessions. This type of rise in the stock market tends to draw in traders and investors from the sidelines who might have been reticent to put money to work.
However, those considering putting new money to work need to approach the market with caution. We are still in a very volatile phase and this could end up being a huge bear market trap.
Yesterday, credit rating firm Moody’s (MCO) downgraded Portugal’s sovereign debt rating. The market brushed off the news and we ended up with very big gains on the day. The Moody’s ratings downgrade will most likely not be the end of the story. Portugal and possibly Spain will most likely at some point in the near future, spook the markets and send stocks lower again, so traders need to watch for that.
So far, second quarter earnings are encouraging and should this continue, we may get more of a lift that sends stocks higher, so while we would advocate being in the markets right now, we also advocate locking in profits and trading with stops, readjusting these if stocks continue to move higher.
Jul 13, 2010 Company News, Earnings, Stock to watch Comments Off
Technology bellwether Intel (INTC) today reported 2010 second quarter earnings results that handily beat analysts’ estimates. According to the company, this was its best quarter ever. For the period, the company reported that revenues rose 34% to $10.765 billion, from $8.024 billion in the year ago period.
Operating income rose from a loss of $12 million in Q2 2009, to $3.98 billion, while net income rose to $2.88 billion, from a loss of $398 million Q2 2009. Results from the second quarter of 2009, were affected by a $1.06 billion fine that was levied on the company by the European Union.
The company’s gross margin, which is closely followed by analysts, rose to 67%, from 51% a year ago. Intel had previously announced that it expects to realize margins of 64%, plus or minus 2%.
On a per share basis, the company earned $0.51, compared to the $0.43 analysts had been forecasting, on revenues of $10.25 billion. The company had also provided its own revenue guidance of $10.2 billion, plus or minus $400 million.
Intel’s stock rose as much as $1.72 or 8.1% in after hours trading on the news.
Jul 13, 2010 Options, Trading Idea Comments Off
Markets are poised for a higher open. We are recommending subscribers to The Options Capitalist buy the Sandisk (SNDK) Aug 48 calls and the Freeport McMoRan (FCX) Aug 65 calls.
Jul 13, 2010 Economy Comments Off
Moody’s (MCO) on Tuesday, cut Portugal’s government bond ratings to Aa2 from A1 on what the credit agency terms feeble growth and rising debt levels.
Moody’s also stated that it expects Portugal’s debt situation to continue deteriorating for at least the next two to three years.
Jul 12, 2010 Earnings, Stock to watch Comments Off
Alcoa (AA) kicked off the second quarter earnings season by reporting better than expected Q2 earnings that beat by a penny per share. For the period, which ended June 30, the company reported a profit of $136 million, or $0.13 per share, compared to analysts’ expectation of a profit of $0.12 per share. Alcoa credited lower energy costs, improved productivity and stronger sales for its improved earnings picture. In the year ago period, Alcoa reported a loss of $454 million, or $0.47 per share.
Sales for the period rose twenty-two percent to $5.18 billion, compared to sales of $4.24 billion in the second quarter period last year, as a result of a four percent increase in aluminum shipments as well as a one percent rise in third-party prices for alumina.
The company’s improved financial picture is also partly due to a restructuring the company undertook last year, that saw it cut 13,500 jobs.
In after hours on Monday, Alcoa shares rose to $11.30, from a close of $10.87.
