The Technical Trader – Google
Mar 10, 2010 Stock to watch, Stocks On The Move, Technical Analysis, Trading Idea
Google (GOOG) was up 2.9% or $16.26 to $576.45 today, a strong performer in an otherwise flat market. On March 2nd, in a post on entitled “Google Could Be Heading Much Higher” (access here), we recommended the stock based on a technical analysis of the shares. We were looking for the stock to move to $580, with some possible resistance at $560.
With the stock now at $576.45 and the stock up better than thirty-six points since our recommendation, those still holding need to assess the trade.
From a technical analysis standpoint, the stock has performed exactly as one would expect, hitting a triple bottom (pattern formed between November and February) at $520 on February 25 and promptly turning around and closing higher every day but two since then.
As such, we should expect the same might hold true and the stock might soon get checked as astute traders take profits from the current run.
We would hold still to maximize profits, but put in a very tight stop, maybe 5 points below current level and if the stock keeps moving up, adjust stop upward a point for every one point gain in the shares. While the shares might continue their upward march into next week or even beyond, we recommend exiting the trade by the close on Friday. Otherwise If the market is weak on Thursday, exit.
The Technical Trader – Apple
Mar 7, 2010 Stock to watch, Technical Analysis, Trading Idea
Apple (AAPL) hit a new 52-week high of $219.70 on Friday, although the stock pulled back a bit, to close at $218.95. From the start of 2009, through October of that year, Apple’s stock was basically moving in a straight line upwards. Since mid October however, the shares have traded in a range, albeit a wide one, between $190 and $210, while briefly hitting a high if $215.55 on January 20.
With the move of $8.24 to $218.95, the stock finally broke above $215, which has proven to be a strong resistance area for the past two months and that could be a very bullish signal.
Should the markets look to head higher today and Apple is moving in tandem as well, we would look to buy the stock here. Of course, we would look to take early profits, as we still have a huge amount of volatility in the stock market.
If an entry opportunity is presented, we will follow through with this trade, so visit the blog often for updates.
Tags: apple, Technical Analysis
Option Trade Of The Day – 03/08/10
Mar 7, 2010 Options, Technical Analysis, Trading Idea
Monsanto - 03/05/10
Shares of fertilizer producer Monsanto (MON) have severely lagged the overall market the past two months. On Friday, with the broader indices all gaining over one percent, the stock lost 2.23%.
However, we are now looking for the stock to hold above $72 and rebound a little, creating an opportunity for some quick profits. Should we see some further drop, we should hold above $70, with a break below there, creating some shorting opportunities.
With the stock due for a short-term bounce, we are recommending buying call options on Monsanto. Buy the March 2010 75 calls, which closed on Friday at $0.55 by $0.57.
With the stock in a downtrend, we want to enter into this trade ONLY if the stock is moving to the upside. If MON starts an upward move, then initiate the trade. We also want to take quick profits, as these are the March options, which expire on the 19th and again, the stock is in a downtrend. When the options are up at least 15% after entry, exit.
RISK PROFILE:
Assuming we enter only when MON is moving to the upside, this is a low risk trade that should pay big. However, do not get greedy. Once up about 15%, do not hold the trade overnight beyond that point.
The stock market had a great week last week and as such, some profit taking this week would not be unexpected. Keep that in mind. Take early profits and once again, enter into trade only if Monsanto is moving to the upside. We will follow up on this trade here on the blog, so check back often and or subscribe to our RSS feed here.
The Technical Trader – Ross Stores
Mar 4, 2010 Stock to watch, Stocks On The Move, Technical Analysis, Trading Idea
Apparel retailer Ross Stores (ROST) was a strong performer today, as retail stocks rallied on the back of strong February same store sales among the group.
Ross Stores - 03/04/2010
Ross Stores was up $1.61 to $51.06, a gain of 3.26%, with the stock hitting an intra-day high of $51.55, which also happens to be the new 52-week high for the stock.
The stock has closed higher in seven out of the last ten sessions, forming a very nice bullish pattern in the process.
We can start looking for a pullback pretty soon, but for now, we are banking on more upside. If the stock market is strong on Friday, go long Ross Stores up to $51.40. Once in, put an order to sell the stock at $53.61, which is about five percent higher than current levels.
Monitor the stock aggressively and exit if ROST is down a percent or more. If by Wednesday March 10, we have not hit our target, exit. If by Monday or Tuesday, the stock is up to $52.75 or higher, exit.
For more information on Navivest’s subscription based trading advisory services, visit our website at http://www.navivest.com
Google Recommendation Follow-up
Mar 4, 2010 Technical Analysis, Trading Idea, Uncategorized
Two days ago on March 2nd, we published a post on the Navivest blog, in which we suggested that based on technical analysis, Google shares could be heading much higher.
The shares were at $542 then and today, they closed at $554.59, up 12 points since then. We still see some more upside although with the nice move in just two days, its never a bad idea to take early profits.
Tomorrow Friday before the market opens, we get some key economic news, including the unemployment rate for February.
Should the economic news releases send the market higher, we would hold on to Google shares and set tight stops, with an aim towards taking profits next week, but if the news is bad, then close out the Google trade.
Tags: google, stock recommendation, Trading Idea
Trade Recommendation Follow-up – Nordson
Mar 2, 2010 Stock to watch, Trading Idea
On February 23rd, we recommended buying Nordson (NDSN) shares, as the stock was up almost 9%, on a day that the major indices were all down between .91% and 1.14%.
The stock closed today (03/02/10) at $67.09, up from our $64.75 entry. However, the stock is up against short-term resistance and we recommend taking profits here. If the market opens strong tomorrow, or the going is good early on and or Nordson shares are moving up, hold on until later in the day. Otherwise exit early on.
Tags: nordson, stock recommendation
Google Could Be Heading Much Higher
Mar 2, 2010 Stock to watch, Stocks On The Move, Technical Analysis, Trading Idea
Google - 03/02/2010
On January 4th, the first trading day of this year, Google (GOOG) shares hit a 52 week high of $629.51. The shares then promptly turned around and lost about a hundred points over the next month.
It seems that that correction is now over. The shares maintained strong support at $520 during the decline, hitting that level twice, but never going below it, and consolidating just above that mark over the past month.
Today, with a $10 gain in the shares, which has moved the stock to the $542 level, Google is the largest point gainer among S&P 500 stocks.
If we see an extension of today’s gains and Google shares clear the $545 area the next few trading days, then we could see the stock move much higher to the $580 area, although, we could see resistance at about $560.
If we do see continued overall market strength in coming days, traders may want to look at adding Google to their trading portfolio.
For those doing so, this is not a long term trading idea, as the market may continue to get hit by adverse news, economic or otherwise.
Tags: (GOOG), google, Technical Analysis
Buy Big Lots Options On Upcoming Earnings
Feb 26, 2010 Earnings, Options, Trading Idea
The following is the latest trade from our Options Capitalist service.
Closeout retailer Big Lots (BIG) reports its latest earnings news on Monday. There is a very good likelihood the company beats estimates, which should send the shares higher.
Buy the Big Lots March 2010 32.50 calls. They are now trading at $1.90 by $2.05. Enter to $2.40. There is a fifteen cents spread between bid and ask, which is larger than what we prefer, but with a beat, we should see a $2-$3 pop in the stock.
The Options Capitalist is a subscriptions-based options trading recommendation service. More information about the service can be found here.
Selling First Solar Calls – Easy Money In The Bank
Feb 23, 2010 Options, Trading Idea, Uncategorized
Trade Update II
On Thursday February 11, we sent out a recommendation to subscribers of our Navivest Options Writer service, that they sell the First Solar (FSRL) March 150 calls.
Our recommendation was premised on the fact that the stock would have to climb about 35 points before the March 19 expiration and beyond that, our analysis of First Solar, revealed that there was too much negative overhang on the company, making it unlikely that the company would rally that much in so short a time period.
While the stock did rally a few points after we got in, its been sold off drastically since last Friday, February 18 and the March 150 calls, which we got $0.92 for, are now bidding just $0.06!
March 19 is still a ways off, and the stock could see some upside move, but there is now a better than 95% chance that even if we hold on through expiration, the stock stays below $150. Alternatively, we can actually close out the position now and we realize a profit of 93.47%.
Buying calls and puts provide a great opportunity for traders to realize incredible profits in a very short period of time. However, this should be done only with the utmost care and after conducting a very thorough analysis of the underlying stock to see if it has a good likelihood of moving in the direction you expect it to, as well as analyzing the options, including looking at the options’ greeks, to make sure its not priced in a manner that stacks the odds against you to begin with, as we do when selecting options trading candidates for our Options Capitalist service.
Alternatively, instead of just buying and calls and puts, traders should look to sell options as well, to put the odds when trading options, in their favor. Selling options also helps offset risks inherent in the portfolio, from just buying calls.
Eighty percent of all options expire worthless, which means that when you buy a call or put, there is a good chance that it will be a losing proposition.
Using our above trade as an example, while our subscribers where selling the FSLR March 150 calls, others out there were taking the other side of that trade, buying the calls in the hopes that First Solar either climbs to over $150, so that they can exercise the option and buy the stock at a lower price, or sell the calls at a profit if there is some rise in the stock. But as aforementioned, we sold those calls at $0.92 and they are now bidding $0.06, meaning anyone buying those calls on February 11 and holding on through today, has lost $.86 cents on each call they bought, or 93%.
For more information on Navivest’s subscription based trading advisory service, visit out website at http://www.navivest.com
Tags: calls, calls options, first solar, options writer, sell options
The Options Capitalist – SII March 37 Calls Exit Alert
Feb 22, 2010 Options, Trading Idea
The Smith International calls we entered into on Friday, are up about 125%. They are now bidding $4.10, but with the wide spread between bid and ask, we are up 95%. Exit trade.
Navivest
Tags: call options, navivest, options capitalist, smith international
