All posts by jimmybob

NFLX – NetFlix Irrational Exuberance

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Netflx(NFLX) is a stock that seems to have been on a reality T.V. show the past 6 months. When the stock crossed $300, it had a fight with it's reality mother... Unfortunately reality said, it doesn't deserve its lofty valuation. Not only that, it's Godfather decided to split the online and mail business, and raise prices. The stock dropped faster then a Paris Hilton Calorie Scale.

Now the Reality Script calls for the REBOUND. How does a company with 24.4 million subcribers, with a business model that says we are growing, have stock price that is 60% off it's high from the summer?

Thats an easy answer... it's from the non-believers who have shorted the stock to chit. Who are hell bent on driving the share price under $100. Must be unpleasant to fall asleep at night, knowing those shares you  borrowed at $120, are available at $135. Well not yet, but that is the vision the wicked witch of the west is giving you.

But again that is the lesson you get when you underestimate the power of a company with a huge subscriber base...

 

We shall see what happens the rest of the week, but if history is any indicator of future results, NFLX is primed to head higher into friday.

 

LNKD – Just like the Doctor ordered

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Back in the day, an upgrade from Goldman Sacks was a welcome sign for a company and investors alike. The conviction buy list actually lived up to the name. Recently it seems Goldman Sacks has lost its luster. Stocks it upgrades fizzle... the conviction buy list?? Isn't that the daily read in the New York Penitentiary?

Goldman Sacks finally read this blog. LinkedIn(LNKD), which is up from  $64 in early march, eclipsed the $100 barrier today on an upgrade from the once relevant investment firm. We have been writing about this stock for weeks. Read here.

It didn't take overpaid analysts to see the bargain on LinkedIn(LNKD) shares. It must mean Goldman Sacks(GS) finished loading up on some shares. Fully expect this manipulated stock to cross and hold the $100 barrier for good sometime in the next 5 days.

We said it would break $100 last week.. a 10% move. Well no more then 7 days later, the stock obeyed our orders. Option traders reaped the rewards today. Take a look at the charts:

 

 

AFTER

 

 LinkedIn(LNKD) continues to shine after its most recent earnings report, dilution none-with-standing. Expect a consolidation day or so, before the lock and load above $100. Or maybe you should ask the folks over at Goldman Sacks(GS), they seem to have "casually-late" down to a science.

The Bottom

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Bottoms come in all shapes, sizes, types and colors. Big and small? Long and short?

Nice bottoms have even become so popular they have their own T.V. Show. Nicki Minaj is very thankful for the bottom. 

 

 

Coco?? Last i checked there was a Zipcode request for that one. But yes, she has a T.V. Show as well.

 

Spotting nice bottoms can be considered an art form. Especially for a trader looking for the perfect time to go long. Is it the capitulation volume? Chart signals like the moving averages or bollinger bands? Sector news? Sometimes it's just intuition. Either way, on December 14th, 2011, we spotted the bottom of all bottoms. Priceline.com(PCLN) had just touched the bottom bollinger band at $445. We wrote about that action here. To add fuel to the fire, Cramer put Priceline.come(PCLN) on his "Stay Away" list the next day. We wrote about that here.

Check out that chart we posted:

Now check the chart nearly 3 months later as Priceline.come(PCLN) nearly hit $700:

 

Anyone can look at a chart like Priceline.com(PCLN)'s and figure the odds of it going down are better then the odds of it going up. If trading was that easy we would all be Millionaires. What separates those who make the millions and those who lose their money, are the ability to see through all the fog, the distractions, the short call articles like this one(here).

Cramer has been wrong to the tune of $255 in the past 3 months. Priceline.com(PCLN) is now up 64% from his bottom call. I guess Cramer does not like a good bottom. I'll get Coco his number.

More to come on Priceline.com(PCLN). Be sure to check out our chat for our trades.

 

 

LinkedIn on the verge…..

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It was 4 weeks ago, when we wrote about LinkedIn(LNKD) after it's steller earnings report. Since then the stock has traded in a range from $84 to $96. It closed at 90.67 today, and we think this is the week it breaks and holds above $100. Why? Well there are many reasons. First and foremost, the chart gives hints of an impending breakout. The Bollinger Bands are getting very tight. Also, look at the higher volume since Feb 13th. Looks like sellers are being churned through, and once those are gone, we can really start to move.

Winning in the options market is all about finding the stocks before they make a big move. Finding a cold stock before it's hot, or has news. It's also about finding past trends, as history tends to repeat itself. LinkedIn(LNKD) has had many volatile breakout moves(up and down) since it's IPO last year.

Will this be the week LinkedIn(LNKD) breaks out of it's trading channel, and takes on another digit? We think so and have positioned ourselves with $95, $97.50, and $100 March 17th calls.

Will we be right again like we were with WYNN,  PriceLine(PCLN), SodaStream(SODA), Fossil(FOSL), and many others so far in 2012?

I guess we will find out soon enough.

Heads I win, Tails you lose…

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Ever wonder how Houdini escapes from sure death? How Hulk Hogan wins the WWF championship? How Janet Jackson's nipple falls out of her bra during the superbowl?

The outcome is fixed. There aren't many certain things in life, and many people would say the only two things you can count on are death and taxes. I beg to differ. Death...Taxes... and a manipulated stock market.

Take tomorrow's over-hyped employment numbers. Do you think the numbers will actually have an impact one way or the other? If you say yes, then how?

So the numbers come in above expectations. What happens? The market will rally on the continued improvement in the U.S. economy.

The numbers come in below expectations. What happens? The market will rally(after a quick drop) because folks will buy on the hope of renewed interest in QE3.

Heads I win(bulls), Tails you lose(bears).

It's only when the last penny is in the hands of the Bears, that we will get any serious downside to this market. Will it be the summer? Maybe the fall during the elections? Who knows, but you have to trade what you see, and right now it's a market hell bent on making new highs.