Navivest Stocks and Options Blog

Technical Trader – Cummins Inc

Jul 21, 2010 Options, Stocks, Technical Analysis

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.

Tags: cummins inc, options writing, sell calls, Technical Analysis

Trader Beware!

Jul 14, 2010 Stock Market, Stocks

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.

Tags: moody's, portugal debt rating, Stock Market, Stocks

Dow Industrials Make It Three Straight Days Of Gains

Jul 8, 2010 Stock Market, Stocks

The Dow Jones Industrial Average followed up yesterday’s 274.66 point gain, with a 120.71 gain today, making it three straight days of gains for the index. Twenty-nine stocks out of the thirty stocks in the Dow closed higher with Intel (INTC) the lone laggard, closing down $0.04 to $20.10. McDonald’s (MCD) and Boeing (BA) were the biggest gainers, rising $1.71 to $69.02 and $1.43 to $64.73 respectively.

Energy stocks were strong positive movers on the day on the back of a $1.83 rise in the price of oil. Anadarko Petroleum (APC) was up $2.97 to $44.56 and EOG Resources (EOG) added $2.42 to $106.22.

Retail stocks were mixed on the release of June sales numbers from the nation’s major retailers. Teen clothing retailer Abercrombie & Fitch (ANF) added $2.55 to $35.45 and Ross Stores (ROST) was off 41.32 to $54.03

Tags: Stock Market, Stocks

Stocks To Watch – 06/30/10

Jun 30, 2010 Stock Market, Stock to watch, Stocks

With the major indices trading in a very tight range, there isn’t much movement in individual stocks. A few standouts include electric car company Tesla Motors (TSLA), which went public yesterday and gained 40% in its first day of trading. The stock is up another 33.12% so far today, on a $6.83 to $27.45 in the shares.

Fertilizer producer CF Industries (CF) is up $3.17 or 5.12% to $65.13. Online retailer Amazon (AMZN) is up $3.33 or 3.07% to $111.94.

Among the losers, Celgene (CELG) is off $2.11 or 3.96% to $51.13. The stock is off the lows of the day however. CELG traded as low as $49.54 in earlier going.

Tags: amazon, celgene, cf industries, tesla

Tesla Surges 40.53% In First Day Of Trading

Jun 29, 2010 IPOs, Stocks

Shares of electric car company Tesla Motors (TSLA) rallied $6.89 or 40.53% from its opening price of $19, to close at $23.89, making the first U.S. auto manufacturing company IPO since 1956, when Ford (F) went public, a huge success. 18,767,561 shares of Tesla traded hands.

Yesterday, Tesla announced that it was raising the size of the IPO by 19.81%, from 11.1 million to 13.3 million. The company ended up selling those 13.3 million shares at $17, compared to its planned offering price of $14-$16.

Highlighting the huge demand for Tesla’s stock, the it was a horrible day for the stock market, with all the major indices down over two and half percent. The NASDAQ and the S&P 500 indices actually dropped 3.85% and 3.10% respectively.

All thirty stocks in the Dow Jones Industrial Average closed lower and only one stock, Zimmer Holdings (ZMH) among the five hundred in the S&P 500, managed to close higher. ZMH added $0.03 to close at $54.60.

Tags: IPO, tesla

Dow Gives Up 143 Points Gain

Jun 21, 2010 Stock Market, Stocks

The stock market, which started the day on a positive note, as all the major indices rallied in the early going, on news that China was going to loosen its grip on its currency and let it rise against the U.S. Dollar, gave up all its early gains and then some in late day trading, with the Dow giving up a 143.52 points gain that had been tacked on earlier.

For the day, the Dow Jones Industrial Average lost 8.23 points to close at 10,442.41, NASDAQ was off 20.71 points to end the session at 2,289.09, while the S&P 500 shed 4.31 points to close at 1,113.20. The sucker’s rally was a stark reminder of the heavy volatility in the markets of late.

Highlighting the massive volatility on the day, Dow component Caterpillar (CAT), which closed on Friday at $65.85 and opened today at $67.56 and then hit a high of $68.35 intraday, only managed a $0.22 gain on the day, to close at $66.07.

Apple (AAPL) opened at $277.75, from last Friday’s close of $274.07, hit a high of $279.01, but ended up losing $3.90, to close at $270.17.

From a technical analysis perspective, the reversal was not at all suprising. Stocks hit a near-term bottom on June 8 and have been on an upward move since then. However, in the past few sessions, the rally was losing steam, with stocks only making half-hearted moves to the upside and the charts were foretelling that it was time to take a breather.

Tags: apple, caterpillar, Stock Market, Stocks

Ugg Boots Maker Up 12%

Feb 26, 2010 Earnings, Stock to watch, Stocks

Deckers Outdoor (DECK) is seeing its shares rally very strongly today, on great fourth quarter numbers. The company, whose brands include Ugg shoes, reported late yesterday, that for the most recent fourth quarter period, it earned $67.7 million, which translates into $5.22 per share, against the $4.28 per share that analysts were forecasting. This compares to earnings of $40.5 million or $3.07 per share in the fourth quarter period a year ago.
The stock at 12:56 pm, is up $13.19, to $119.35, a gain of 12.42%.

Tags: DECK, deckers, uggs

Stock Of The Day – Nordson

Feb 23, 2010 Stock Market, Stock to watch, Stocks

With the broader markets in a funk – the Dow is down 0.91%, while the NASDAQ and the S&P 500 are down 1.26 and 1.147% respectively at 2:38 PM – shares of Nordson (NDSN), a manufacturer of systems that apply adhesives during the manufacturing process, are up $5.32 or 8.95% to $64.75.

The company after the bell yesterday, reported what it termed “Excellent Fiscal Year 2010 First Quarter Results.”

For the period, which ended January 31, Nordson reported an 18% rise in revenue to $221 million. Operating profit was $36 million, compared to the $13 million realized in the first quarter period a year ago and earnings came in at $26.7 million or $0.78 per share, compared to $11.2 million and $0.33 per share in the year ago period.

Analysts had been looking for the company to earn $0.58 per share, on $212 million in revenue.

The company also announced that for the fiscal 2010 second quarter period, “sales are expected to increase in the range of 26 to 30 percent compared to the second quarter a year ago. Diluted earnings per share are expected to be in the range of $0.81 to $0.89, inclusive of a $0.01 charge related to restructuring activities.”

Nordson shares are trading roughly 571,000 shares, compared to average daily volume of 187,000 over the past three months.

Tags: hot stock, nordson, Stock to watch

Hot Stock – Green Plains Renewable Energy

Feb 22, 2010 Earnings, Stock to watch, Stocks

Shares of ethanol producer, Green Plains Renewable Energy (GPRE) was among the biggest percentage gainer among NASDAQ stocks today. The stock rallied $2.85 to $16.99, a whopping 20.16% gain, with the movement in the stock coming on the back of the company’s latest earnings results.

The company this morning, announced that for it’s most recent fourth quarter period, it recorded a profit of $23.1 million, which translates into $0.91 per share, on revenue of $436.7 million. This compares to revenue of $183.2 million and a loss of $1.8 million or ($0.08) per share in the fourth quarter of 2008.

The company credited higher ethanol demand for the stellar earnings. The higher demand for the company’s products, also helped to improve margins.

For the full year, the company earned $19.8 million, or $0.79 cents per share, on revenue of $1.3 billion.
Green Plains Renewable Energy started 2009 at $2 after a steep decline through 2008, but has been one of the strongest performers among the entire universe of US stocks in the last 12-14 months, climbing over 750% in just over a year.

Tags: biofuel stocks, ethanol stocks, green plains renewable energy, hot stock, Stock to watch

Trade Advisory – 02/19/20

Feb 19, 2010 Mergers & Acquisition, Options, Stocks, Trading Idea

The following is from the latest issue of The Options Capitalist, our subscription based trading advisory service for options traders.

The Options Capitalist

Smith International

02/19/2010

Shares of oilfield services company Smith International (SII), are up $4.53 on a report in the Wall Street Journal, that the company is in advanced talks with Schlumberger (SLB)on being acquired, with an announcement possibly coming next week.

The move in the stock today represents a better than 13% move, but we are hoping that if a deal is announced, Schlumberger’s offer will be higher than the current $37.88 price of the stock.

On December 14, 2009, Exxon Mobil (XOM) announced a $41 billion offer for XTO Energy (XTO). Although this was a slightly different field, XTO is an energy producer, the premium was 25% and hopefully an offer from SLB would be at least similar.

Buy the Smith International (SII) March 37 calls. The current price is $1.95 by $2.10, indicating a $0.15 spread, which will cost us a whopping $15 for each contract plus commission. However, if an offer for the company comes in higher than the current price of the stock, that would put us in a very nice position profit wise.

The Options Capitalist
http://www.navivest.com

Tags: exxon mobil, navivest, options capitalist, smith international, xto energy