What a way to end the week!
We quickly blew through my 10,850 target and never really came down so all trades were on and I hope you put that cash to good use…
I got very nervous at about 1pm when oil spiked and the markets turned down but then very happy when they bounced back up before 2pm. The oil price is still based on fear rather than fundamentals and it seems that the markets are getting used to the fear. As I said earlier, the oil producers (oops I mean rebels over whom they have no control) have to take it up to the next level and actually disrupt production or the jig will soon be up.
This is a very odd rally and can easily be derailed by the rash of economic news coming down the pike next week. Traders chose to ignore the declining (and possibly erroneous) GDP in favor of a 2.9% increase in new home sales, although the builders didn’t seem to get overly excited about it.
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PFE was hot all day and even got additional good news at the end with an approval on inhaled insulin which I think will lead to magazine covers that say Pfizer’s back so I’m only 30% out so far with my double.
MSFT was a home run today! The March $27.50s have gone from .25 when picked on 1/25 to .75 so far. If I only got this one trade right all month I would feel that I had done my job!
Yesterday’s suggestion to at least take the MSFT Feb $27.50s for .15 actually did better with a 400% gain in one day. The best thing about big cap options is they are so liquid when you trade them so you can lock in profits at any point.
Gold did not hold $560 today and the sector was flat but 11/22 TOTD MRB went up 23% and is now close to a clean double! NAK picked up another 6.6% as well so don’t knock these little stocks… ABX showed how excited it can get at $562 as the stock ran up 5% in the morning peak but it immediately gave it back when gold dropped.
CY dropped off a bit today but I already halfed out of that so I’m holding on to see if it gets good press on the weekend.
11/17 not quite TOTD – MER had a great week (up 8%) and continues to look strong.
SNE is up 14% since our selection last week.
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BSX was only saved by the bell as it gave up 7% today, they now have a market cap that is 30% less than company they are trying to acquire! BSX was the TOTD way back on 12/4 when we recommended the puts while the stock was way up at $25.
Here are my original comments from 12/5:
Now we know what’s up with BSX, they just made a bid for GDT, trying to steal it from cheapskate JNJ who had the deal locked but then demanded a discount of 15% from Guidant. Now Boston Scientific is offering back around the original price but I think JNJ was right and that BSX is overpaying so I am going to make make BSX my Trade of The Day as a put.
Anything above the 50 dma of $25 will be a gift on this stock, there will be big volume, so that’s not an if – which means if it breaks $24.75 then the Jan $25 put will be a nice gamble as long as it is not for more than the 1.60 that the $27.50 was going for on Friday. BSX is a $22Bn company trying to swallow GDT at $25Bn and it is very, very likely that over the next few days, someone will have a problem with that! On the other side of this trade, any chance to buy GDT for less than $70 is also a gift as analysts will jump on the bandwagon to claim $72 is a fair price for the company.
Hey, it’s no fun being 100% right if no one remembers – right? We had a clean double on the original put and then another run at it when the stock got hot again in early January. It’s the gift that keeps on giving, like GM!
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TM has a p/e of 15 and GM has a p/e of 15,000,000 yet GM went up 3% today and Toyota was flat in a 600 pt Nikkei rally. Whoever said the world doesn’t make any sense must have been trading these two stocks this week.
I had a nice HAL put trade today as it violated the 5% rule (big stocks hate to go up more than 5% in one day) at 10:15 and VLO was only up 2% and topping so I rode that puppy down almost 3% on the $60 puts for a nice gain.
TASR barely budged off yesterday’s close today, very encouraging.
ATYT gained another 3%
KMG punched right up to a new high today going straight up to $107 and only stopping because the market closed! I pointed out how undervalued it was on Wednesday and I still think you may see $115 if oil remains over $65.
BNI took a little dip on GDP concerns but then continued its normal path upward.
EK only went up .5% today giving us a chance to buy more.
PD and PCU had ridiculous days today. This was another day trade I jumped in on as I saw copper rising and PD jumped $5 (4%) by 10:00 and PCU was only up 2% so I took the PCU $80 calls and rode them out to a very nice gain. http://finance.yahoo.com/q/bc?t=1d&s=PD&l=on&z=m&q=l&c=pcu This is why I am such a fan of cash – you never know when an opportunity will present itself.
Like this morning on CNBC when the CEO of Pfizer slipped that they had the FDA approval that wasn’t official until this afternoon – I mentioned this morning that it would be a very good day to get into the stock because of this and the confusion from the subsequent denial which gave us a much better entry point than we should have had.
LVS is just pinning the overbought meter. I’m hoping to pick up the March $50 puts for $3.20 or less on Monday.
OXPS gave back 7.5% today (“filling the gap” – they call it), this is why we set non-greedy stops. On the other hand, it is a nice opportunity to buy if you didn’t when we picked it.
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MY ATIs had a hell of a day but I wasn’t greedy and got out with a double as soon as it dipped mid-day.
TIE was another example of greed is bad as it was up to the magic 5%, then down to flat before finishing the day up 4%.
ATI is still the better buy of the two but has doubled in 3 months so I’m a little nervous holding it over a weekend!
http://finance.yahoo.com/q/bc?s=TIE&t=5y&l=on&z=m&q=l&c=ati
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SHFL took a run at $26.50 today (200 dma) but couldn’t hold it. If it goes over this mark it will be a very nice buy but it has to do it by next week or it will be more likely to pull back from its 15% run this week.
Our old TOTD PLAY went crazy today, with a 14% jump on the strong earnings I promised you way back in October. It’s close to double where it was back then but I still like it if it pulls back a bit.
Yesterday’s TOTD #1 INTC only gained a little but the Jan $20 calls gained 7% already. TOTD #2 TXN was also flat and so were the $30 calls, still a good buy for $1. The Apple March $75s lost .30 today (8%) and I would bail on another drop even though I really think the stock is better than that.
VZ finally rewarded my patience with a nice 1.5% gain which translated into a 25% gain on the $30 calls.
Well, on the whole this was a very good week – hardly any losers and lots of big winners! I hope it all went well for you and I hope you have a nice weekend!
– Phil
