All posts by jimmybob

November 20th, 2013 Watch List

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We have a two-day losing streak on the SPY and it sure looks like the “sky is falling.” I hope you can sense my sarcasm. The bubble talk continues, of course, and it's been helped along by an upgrade of PCLN to conviction buy at GS with a $1500 price target.

I've been saying it for some time: PCLN fundamentals have set the stock up to be $1200-$1300, easy, but $1500? Wow. The stock is up nearly 3 percent pre-market at $1150 and it'll be one to watch today.

3-D stocks came under pressure yesterday and the selling accelerated after 12, finding DDD under $73 and SSYS at $115 after trading at $84 and $134, respectively, the day before. Considering the moves on the stocks in that sector, a pullback like that is not a game-ender by any means. Rather, it's an opportunity to add before they head back above previous highs.

ICE had another upgrade today, and I continue to love the stock heading into the end of the year. It's also been awhile since analysts have weighed in, and I think they'll start bumping targets into the $240-plus range.

The CPI this morning came in at .1%, vs .2% and it's continuing to show the lack of inflation. I believe this data plus the FOMC minutes this afternoon may become the next catalyst for gold to start heading under $1250, and get ready to test last spring's lows.

Here are some of the analyst changes of note for today:

DSW DSW Sell rating reiterated at Brean Capital
Brean Capital reiterated its Sell rating on DSW ahead of its Q3 earnings report due out on November 26. The firm believes its premium valuation is not justified citing increased competition, commentary from competitors about the difficult environment, and its clearance section remained too Spring/Summer focused throughout the quarter. Price target is $36
DKS Dick's Sporting price target raised to $62 from $59 at RW Baird
Baird raised its price target on Dick's Sporting following solid Q3 results. The firm cited improved traffic. easier comps, and good positioning over the next few quarters. Shares are Outperform rated
CRM Salesforce.com outlook has improved, says Pacific Crest
After attending Salesforce.com's conference, Pacific Crest is more confident that the company can reach its 30% year-over-year growth target. The firm thinks the company's platform business and marketing cloud business can each generate $1B in annual revenue in the future. It keeps an Outperform rating on the stock
HD Home Depot remains a Top Idea, says RW Baird
Baird said home Depot remains a Top Idea as Q3 earnings reinforced their positive view on the stock. The firm believes the next catalyst will be December's investor meeting and noted comp strength and Pro customer trends remain encouraging. Shares are Outperform rated with a $93 price target
ICE IntercontinentalExchange price target raised to $235 from $215 at Jefferies
Jefferies views the pro forma earnings power of the combined IntercontinentalExchange, NYSE company as compelling. The firm raised its price target for ICE shares to $235 and keeps a Buy rating on the stock
JPM JPMorgan has made progress towards reducing overhang, says Wells Fargo
After JPMorgan announced a $13B settlement with the U.S. government over improper mortgage allegations, Wells Fargo thinks the bank has significantly reduced the legal/regulatory overhang it's facing. The firm believes the stock's valuation is attractive even if JPMorgan suspends its share buybacks. Wells keeps an Outperform rating on the shares
GMCR Green Mountain initiated with a Buy at Buckingham
Buckingham initiated Green Mountain with a $90 price target. The firm views the pullback in shares due to grocery channel share loss as a buying opportunity and said Green Mountain holds competitive advantages and expects brewing machines to double domestic household penetration over the next 5 years. Near-term, the analyst expects the addition of unlicensed store brands to calm concerns, combined with high short interest, to support shares
TSLA Tesla price target lowered to $120 from $141 at Barclays
Barclays expects the investigation into Model S fires will likely impact sales by about 10-20% and uses previously highly publicized investigations/recalls as a guide. The firm believes the monetary costs will be manageable but trimmed forecasts, resulting in a reduction in price target to $120 from $141. Shares are Equal Weight rated

Obviously, I'll be watching PCLN today for any opportunities. I'll also be looking to enter a few bearish bets on gold once again, as I think it'll break under $1250 this week, whereupon selling will then accelerate:

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
GLD PUT $120.00 Weekly 0.21 0.25
DUST CALL $39.00 Weekly 0.40 0.40

Happy Hump Day, and let's have a great day!

- JB

November 19th, 2013 Watch List

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The DOW crossed 16,000 for the first time and the SPY ramped into all-time highs yesterday only to fade at the trading day's end. TSLA continued to be under pressure and broke under $130 while SCTY also saw some selling and broke under $50 in the afternoon. Some of the pullback in SCTY can be attributed to this Congressional inquiry : http://blogs.barrons.com/techtraderdaily/2013/11/18/barrons-story-on-solarcity-sparks-congressional-inquiry/?mod=yahoobarrons&ru=yahoo .

3-D stocks continued to ramp higher yesterday with my favorite, SSYS, hitting new highs. I locked my $145 calls in, as I'm worried about a pullback on the stocks. I still love the sector, however, and will be jumping back into SSYS when it looks right.

HD reported another strong quarter this morning and the stock is back over its May 213 high while BBY also reported a nice quarter but warned on margins going forward, thus putting the stock down pre-market.

Bitcoin continues to gather some attention as it broke above $600 yesterday, while also hitting $900 last night, though it eventually fell back into the $500s. It's crazy to watch the trading, but that's all I'll do for right now.

I grabbed some ICE January $230 calls and think the stock is poised to break out over $210 this week. The January strikes will give the stock plenty of time to get to $220, and that was my reasoning in getting January instead of December.

I saw some weakness in AAPL and bought some $505 puts near the end of the day. I'll be quick to close them out if I see strength this morning, however. And here's why I bought some: http://stocktwits.com/message/17489521

Not too many analyst changes for today, but here are the ones of note:

GME GameStop is transition period winner, says RW Baird
Baird views GameStop as a transition period winner that benefited from strong sales of GTA V and strong digital and Mobile growth offsetting slower sales of current-gen hardware and software. The firm sees GameStop as a way for investors to play the new console cycle and sees earnings upside in 2014 and beyond. Shares are Outperform rated with a $57 price target
CVS Caremark to benefit from healthcare reform, says Jefferies
Jefferies says CVS Caremark is well positioned to benefit from healthcare reform after its research indicated the company stands to be the biggest pharmacy benefit manager beneficiary from Medicaid expansion. The firm keeps a Buy rating on CVS with a $71 price target
CRM Salesforce.com price target raised to $65 from $54 at Canaccord
Canaccord said Salesforce.com's earnings report was solid and positions the stock well for 2014. Salesforce.com is Canaccord's favorite large-cap growth stock for 2014 given growth rates and cash flow margins. Shares are Buy rated
GMCR SunTrust cautious ahead of Green Mountain's Q4 report
SunTrust is confident Green Mountain will beat its $970M revenue estimate, consensus $964M, but has concerns regarding decelerating K-Cup growth reported by Nielsen and that FY14 guidance will be back-end loaded. The firm said the company shipped 5M brewers in Q1, making comps difficult. Shares are Neutral rated with an $80 price target
P Pandora Q3 ad revenue likely to beat expectations, says MKM Partners
MKM Partners expects Pandora's Q3 ad revenue to surpass expectations. However, the firm continues to believe that the company's EPS will not exceed $1 in 2015, and it expects the stock to undergo "a meaningful correction" when revenue momentum slows. The firm keeps a Sell rating on the stock
JACK Jack in the Box attractively valued, says BofA/Merrill
BofA/Merrill expects Jack in the Box to report Q4 EPS of 41c vs. consensus of 39c, on flattish comps. The analyst believes shares are the least expensive in the quick service restaurant universe and maintains its above Street FY14 EPS estimate of $2.20. Shares are Buy rated with a $50 price target

WHR Whirlpool downgraded to Market Perform from Outperform at Raymond James

DE Deere likely to guide consensus estimates lower tomorrow, says UBS
UBS said the proposed EPA announcement to reduce renewable fuel standards for 2014 is a headwind for ethanol production, combined with tightening credit conditions, and falling farmland values in certain regions, will result in weakening order trends for Deere. The firm expects Deere to guide 2014 consensus estimate lower tomorrow and reiterates its Sell rating and $72 price target

Yesterday's fade in SHLD provides a nice opportunity to grab some long some calls before earnings (I'll most likely sell all of them before earnings if I do get in, though). I may also try for some more ICE calls with CC this morning, amid news of synergies from the NYX merger.

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
ICE CALL $240.00 January 0.40 0.35
SHLD CALL $85.00 December 0.53 0.47

Let's have a great day!

- JB

November 18th, 2013 Watch List

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Continuing its record high run, with the SPY closing above $180 for the first time, the market posted its 6th consecutive weekly gain. Eight weeks ago, with all the supposed headwinds heading the market's way, who would have guessed this? Heck, most folks would have bet that the market would be substantially lower.

Talk of a market bubble also continues, with this weekend's Barron’s putting the “Bubble” on its front cover. If we continue to ramp higher, expect the chatter to gain steam.

Also, the major catalyst for the markets this week may be the FOMC minutes that are due out Wednesday, so that's something to watch for.

Additionally, earnings season starts to wind down with reports out from BBY, CRM, GMCR, ANF, TGT and others this week. I'm not sure I'll play any of them, but stay tuned!

Here are some of the analyst changes for today:

ICE IntercontinentalExchange upgraded to Outperform at BMO Capital
BMO Capital resumed coverage on IntercontinentalExchange with an Outperform rating from a Market Perform rating. The firm is positive on IntercontinentalExchange's cost and revenue synergies and diverse growth drivers. Price target raised to $224 from $145
MSFT Microsoft downgraded at BofA/Merrill
As previously reported, BofA/Merrill downgraded Microsoft to Underperform from Neutral. The firm said valuation already reflects potential divestitures and restructuring and has concerns downward revisions, flat earnings, and declining margins, despite who is CEO, will be a burden upon new management. Price target remains $36
WLT Walter Energy downgraded to Neutral from Buy at Citigroup
Citigroup downgraded Walter Energy and other names in the meal coal space citing weak spot markets. Citi lowered its price target for shares to $19 from $20
TWTR Twitter initiated with a Sell at Wunderlich
Target $34
DE Deere FY14 guidance likely to beat expecations, says BMO Capital
BMO Capital believes that investors anticipate that Deere's FY14 guidance will predict significant declines in its revenue and EPS, but the firm expects the FY14 guidance to call for revenue to drop 5% and EPs to decline 5%-10%. The firm thinks the stock is undervalued at current levels, and it keeps an Outperform rating on the shares
CRM Salesforce.com checks show strong momentum continues, says Piper Jaffray
Piper Jaffray said its channel checks into the customer relationship management ecosystem indicate that strong momentum continues for Salesforce.com. The firm adds that its contacts suggested "staggering" demand for Salesforce's Force.com. Piper reiterates an Overweight rating on shares of Salesforce.com with a $60 price target
ANF Abercrombie & Fitch Q3 results should not move the stock, says Brean Capital
Brean Capital previewed Q3 earnings from Abercrombie & Fitch which are due out on Thursday. The firm believes earnings will be inline and expects no change to guidance though inventory levels and trends will be of interest. Brean sees investor sentiment on the company as the worst in its history but sees realistic goals and timelines as a path to a solid longer term risk/reward. Shares are Buy rated with a $48 price target

As of now I'm holding: DECK $83 calls, MLNX $46 calls, OPEN $95 calls, SCTY December $80/January $100 calls and SSYS December $145 calls as well as a few other positions. I'll also be looking to enter ICE at some point today as well as trying for the CBRL position I didn't add this last Friday.

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
ICE CALL $240.00 January 0.40 0.35
CBRL CALL $120.00 December 0.75 0.70

Here's the Week Ahead webinar for those that missed it: https://www.optionmillionaires.com/forum/showthread.php/693-The-Week-Ahead-with-UPB-and-JB-11-17

Let's have a great day!

- JB

November 15th, 2013 Watch List

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The SPY looks poised to close in the green for the 6th straight week, unless we experience a pullback of at least 1.12 percent today. What happened to October being a historically poor-performing month? What about earnings jitters and concerns possibly causing a pullback?

There have been too many reasons to sell the rally in 2013, yet here we are at all-time highs for the 38th time this year and we look poised to go into the weekend at an even higher mark. The VIX shed 4 percent yesterday and now sits at 12.37, an area we haven't seen since last April. If we get to 10 there, I'll start reconsidering my previous bullish sentiments.

Talk of a market bubble also continues to pick up steam and should provide needed headwinds for the move higher, in my opinion. Additionally, it looks like the upcoming disappointing holiday shopping season is starting to garner some hype. Truthfully, this market needs those headwinds or we won’t continue to rally.

TWTR will finally will have options today. I think that unless you're selling covered calls or trying to play premium crush, you should stay away for now. The premiums will be jacked and, historically, they tend to go down a few months after they start trading. I'll wait a week or two and then look for some OTM leaps for a play over $50 to $60 in 2014.

Today, I'll be keeping it small as I have a ton of positions that include GOOG 1050/1055, SSYS 130/135/140, OPEN 87.50, AMZN 375 this week and 390 for next week, FFIV 87.50, PCLN 1170, ISRG 410, SHLD 65, SINA 87.50 and 91, Z 85s and and quite a few more in December and January strikes.

Here are the analyst changes for today:

AMZN Amazon.com price target raised to $404 from $380 at Morgan Stanley
Morgan Stanley believes Amazon.com's AWS lowers the cost and time of starting a business and is in the early stages of creating a a public cloud ecosystem that will extend into enterprise. The analyst reiterated Amazon's Overweight rating and raised its price target to $404 from $380
P Pandora price target raised to $35 from $25 at JPMorgan
JPMorgan raised its price target for Pandora shares to $35 ahead of the company's Q3 results next Thursday and reiterates an Overweight rating on the name. The firm believes Pandora is approaching an inflection point in monetization given its growing market share and expanding salesforce. Shares of the online radio service closed yesterday up 22c to $29.47
FDX FedEx hedge fund ownership up to 5.8%, says JPMorgan
JPMorgan says quarterly regulatory filings indicate that hedge fund ownership of FedEx shares increased to 5.8% on September 30, 2013 from 1.8% on September 30, 2012. The firm notes that while a number of shareholders could have potential activist interest, the size of the positions appear to be relatively modest. JPMorgan says involvement of high profile funds shows potential for shareholder pressure, and it keeps an Overweight rating on shares of FedEx with a $153 price target. Shares of the shipping giant closed yesterday up $1.15 to $136.44
LNKD LinkedIn strong growth likely sustainable, says Cantor
After meeting with LinkedIn's management, Cantor believes that the company's double digit growth is likely sustainable for several more years, with room for meaningful margin improvement. The firm keeps a $260 price target and Buy rating on the stock
LNKD LinkedIn initiated with a Buy at Stifel
Target $300
EQIX Equinix weakness creates buying opportunity, says Stifel
After meeting with Equinix's chairman, Stifel believes that recent concerns about the company's fundamentals are overblown. The firm reports that the company continues to prepare for its REIT conversion ,and Stifel keeps a $250 price target and Buy rating on the shares

YOKU Youku Tudou downgraded to Neutral from Buy at BofA/Merrill

I finally added ATK December $125 calls yesterday at .55 and will hold for the foreseeable future. I still love CBRL, despite the fact of my having never sold my $115 calls that were a 4x-bagger. I'll be looking to get some DEC strikes, possibly today, as well as looking into some LNKD lotto calls.

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
LNKD CALL $230.00 Weekly 0.12 0.20
CBRL CALL $120.00 December 0.90 0.85

Lastly, the Link Ahead Webinar will be up later today!

As always: let's all have a great day!

- JB

November 14th, 2013 Watch List

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What looked to be the start of a possible pullback turned into an uber-bullish day as the market rallied off the lows to close at all-time highs once again, despite some possible bearish news from China and Europe. The SPY finally broke above $177.50, a key area it's been banging up against, leading me to think this is a very bullish condition for the next few weeks.

SPY 11-14

Macy’s was a big catalyst to the bounce, in my opinion, as most folks were betting on the retailer to continue to struggle. But that wasn't the case and the stock soared, while also pulling other retail stocks and apparel brands with it. Funny that no one is really talking about the positive impact 33-month-low gas prices are having on the economy.

Yet when gas jumps 50 cents every "expert" warns the markets on its impact on consumer spending. Just another reason why I think this market is nowhere near a bubble. And speaking of bubbles: here are my thoughts on the current "bubbliciousness" of the current markets: https://www.optionmillionaires.com/bubbleicous-2013-great-bubble-taper-caper/.

Today, the big event is Fed Chair nominee Janet Yellen's confirmation hearing in front of the Senate Banking Committee, with festivities set to kick off at 10AM EST. I won't be watching, but it could be interesting to see how she handles her first big event, as the next Fed chairperson will need to be able to soothe markets just like Big Ben was able to do.

WMT, KSS, and CSCO all reported weaker earnings and all three are down pre-market. That hasn’t spooked the markets much, though, and futures are in the green. SCTY was upgraded this morning and the stock is up over 6 percent pre-market. If you've been on another planet, then maybe you don’t know how bullish I am on this stock. I think it's $60-plus very soon, $70-plus soon, and $80-plus down the road. SHLD continues to breakout to the upside on low volume and no chatter. That's very bullish, in my opinion, and I hope that bullishness continues.

OPEN was on Cramerica last night so, hopefully, the stock will continue its break into multi-year highs. That stock will be over $90 soon enough.

I'll be looking for a play or two at the open. Will we have a gap fill, followed by a bounce, or will we just have a “Buy the F%$%$^ Rip?”. Looks like the latter to me.

Here are the analyst changes of note for today:

SCTY SolarCity upgraded to Outperform from Neutral at RW Baird
Baird upgraded SolarCity following the closure of SolarCity LMC Series i, LLC and expects investors to react favorably as expectations are recalibrated. Price target raised to $71 from $50
FINL Finish Line upgraded to Buy from Neutral at B. Riley
Price target raised to $32 from $25.50
CSCO Cisco price target lowered to $24 from $29 at Piper Jaffray
Piper Jaffray lowered its price target for Cisco shares to $24 citing the company's "surprisingly weak" Q1 results and "disappointing" guidance. Piper keeps an Overweight rating on shares, however, saying it believes Cisco is gaining momentum in key growth markets and the stock is relatively inexpensive at current levels
BA Deutsche says Boeing can still reach deal with union
Deutsche Bank believes a contract between Boeing and the Local 751 Union is still possible after the union rejected the proposed machinist contract extension through 2024. Deutsche sees a lot of compromise in the proposed contract that Boeing could sign on for to stay in Washington state. The firm has a Buy rating on the stock with a $156 price target
RVBD Riverbed investors should take some profits, says Oppenheimer
Oppenheimer believes the chances of Riverbed being sold in the near-term are low, but the firm thinks the company could either cut costs faster or break itself up. Nevertheless the firm recommends that investors in Riverbed take some profits in the near-term after the shares rallied 25%+ over the past week. Oppenheimer keeps a $20 price target and Outperform rating on the stock
LULU lululemon downgraded at Sterne Agee
As previously reported, Sterne Agee downgraded lululemon to Underperform from Neutral. The analyst believes recent comments by lululemon's founder is alienating customers, combined with shear problems and the ongoing CEO search, will result in decelerating 2014 same-store-sales trends in 2014. Price target lowered to $56
PCYC Pharmacyclics removed from the Best Ideas List at Wedbush
Wedbush removed Pharmacyclics from the Best Ideas List following IMBRUVICA approval in Mantle Cell Lymphoma. The firm sees high off-label expectations and temporary patient access headwinds limiting shares near-term. The analyst continues to rates shares an Outperform with a $165 price target
AAPL Apple estimates raised at Canaccord
Canaccord's carrier survey indicates iPhone 5s sales are very strong with improving supply levels, steady iPhone 5c sales, strong sales for the new iPad Air, but supply constraints for the new iPad mini. The firm raised estimates and reiterated its Buy rating and $580 price target

I never grabbed my ATK position so I'll be looking for it this morning as well as possibly trying for a GOOG all-time high break into tomorrow:

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
GOOG CALL $1,055.00 Weekly 0.45 0.30
ATK CALL $125.00 December 0.65 0.50

Let's have a great day!

- JB