Technical Trade of The Day – AboveNet
Mar 11, 2010 Uncategorized
AboveNet - 03/10/2010
AboveNet (ABVT), which provides high bandwidth connectivity solutions to businesses, yesterday fell $7.70 to $55.46, a huge 12.19% decline, after the company reported fourth quarter and full year 2009 results. The company also provided guidance for the 2010 guidance, all which served to disappoint investors.
The stock hit an intra-day low of $53.32, but managed to cut its losses. With the rebound in the shares off the day’s lows, the stock held above $55, which is a support area. However, we don’t expect to see the stock rebounding immediately and we should see a retest of that $53 area again.
A drop of $1.50 from yesterday’s close would be a 2.7% gain and traders shorting the stock here should realize that over the next five trading days. With this trade, take quick profits.
Facet Biotech Up 66.44%
Mar 10, 2010 Uncategorized
Facet Biotech (FACT) is one of the best performing stocks overall today, on a $10.77 rally to $26.98, for a 66.44% gain so far on the day.
Abbot Laboratories (ABT) announced that it is $27 per share in cash to buy the company, in a deal worth a total of $450 million.
Tags: abbot labs, facet biotech
AIG Shares up 10%
Mar 10, 2010 Uncategorized
Shares of AIG are up $3.32 to $36.09, a gain of 10.13%, on almost three times the normal volume the past three months. The stock has gone from a low of $24.99 just six days ago.
With a better than 22% of the stock being short, short traders are covering their positions and that is helping to provide additional momentum in the stock.
We could possibly see the stock advance to the $40 area.
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
Option Trade of The Day – 02/26/2010
Feb 26, 2010 Uncategorized
The following is the latest from our subscription-based Navivest Options Writer service. It is a very compelling trade that we are making freely available to readers of the Navivest blog.
Shares of InterMune (ITMN) are trading at $13.84, currently down $0.14 on the day. The stock in in a downtrend, after rallying from $13.46 on January 22nd, to a high of $17.81 on February 3rd.
The options on the stock are very richly priced and the March 20 calls are asking $2.00! Selling these, translates into a 14% potential in just three weeks on a covered basis. We will be selling uncovered calls, making it a 100% proposition if the stock does not get called away on us.
As a biotech company, there is the risk that the comany could announce some news that sends the shares soaring, but those risks, in the three week time frame we will be in the trade, are limited in our opinion.
THE TRADE:
Sell the InterMune (ITMN) March 20 calls.
TRADE FOLLOW-UP:
The First Solar calls are now bidding just $0.05, down about 95%, which is great for us, having sold those calls. Keep position open.
For information on Navivest Options Writer, click here.
Tags: calls, covered calls, first solar, intermune, ITMN, option writer, Options
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
Xenoport Down 64% In Pre-Market Trading
Feb 18, 2010 Uncategorized
Xenoport (XNPT), a biopharmaceutical company, is seeing its shares drop 64.29% in pre-market trading, going from $19.60 to $7.00, after the company announced that a drug that was developed by it and a partner GlaxoSmithKline (GSK) had been denied approval by the Food and Drug administration.
The drug, Horizant, was being developed to treat restless leg syndrome.
Tags: glaxosmithkline, horizant, xenoport
