Asian markets are up and European markets continue to pull back slightly. Don’t expect too much with a Fed pronouncement coming tomorrow but it’s a good day to see which stocks are nervous and which ones don’t care what the Fed decides.
Oil SHOULD go down today as tensions ease slightly in Nigeria but, like I said last week, we need to look for BTU to get back to $51-52 as a signal for a top in the manipulation game.
XOM and CVX found 1Bn barrels off the coast of Africa over the weekend so they should get a pop regardless. This makes XOM a poor indicator in the Valero Rule this week.
Gold continues up and our usual gold plays have a long way to run if it continues. Copper is also very strong and PD should move nicely this week.
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The time is right to start accumulating PLAY May $25s for $1.15 or less before it gets away.
TOL should lead the builders higher today, if they break above $36 they should be able to test the 200 dma at $40 so I like the $35s for $1.10 but it’s a dangerous play in advance of the Fed minutes tomorrow.
Small software company RTLX is growing much faster than analysts think. They gave conservative guidance today along with a 30% earnings beat so there will be time to pick up this stock around $24.
WAG has had a huge amount of trouble breaking over its 200 dma at $45.25 but a nice earnings report should do the trick today. That will make the $45 calls a very nice deal at $1 (a $1.50 premium).
AMR has had enough of a run-up that management decided now would be a good time to predict a 5% increase in fuel costs this year. This is really not bad and actually means they have a lot of upside potential so I will pick up the May $25s only if it comes down to $2.50 or less.
CC got an LEH upgrade that should help it bounce up off its 50 dma at $24.50. If it stays over that mark I like the $25 calls for .60 just looking for .20-.30 on the bounce.
N has fallen far behind PD lately and that shouldn’t last so I like the $50s for $1.75 for a quick trade on the catch-up. BHP also looks attractive with the May $40s at .80.
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If I’m right about Google it shouldn’t get below $360 today, no matter how much selling funds do. We either want to see a low volume day flat or a high volume day up but the key will be a late day rise as sellers start to dry up.
I’m currently holding the 420s for $2, the $430s for $1.30 and the $440s for .75. I will look to pick up more $420s at $1 if it gets that low or some $450s before they go over $1 if it’s trending up. If that happens (Google up $10 should do it), I will probably sell the $420s for $4 so I have a more or less free ride on the group.
