General Options Blog

Chart Updates

AAPL $376.51 (updated chart) ultimately she sees $350-355 soon IMO

CAT $89.99 (updated chart) call me nutz, but if my month old SPY $105 prediction comes to fruition then CAT is going to be seeing that green circle $65-67 range b4 year end. its a possiblity and the chart is shapin up... double top... broke solidly clear of that triangle.

AXP $46 (updated chart) i'm thinking $40.50 - $41 on continued weakness, but lets get to my first circled target first

GMCR $50.35 (updated chart) she's really behaving, after popping out of the gate early GMCR got crushed. Shes going to $30 - $32.50 before the middle of Jan 2012 IMO

Weekend Charts

CRM $113.63 (chart) this one looks like Zurg from toy story. i think the chart has seen its downside right now, and its gonna squeeze higher next week. target back to $125.

the play - CRM $125 nov 25 calls at $.94

AXP $46.88 (chart) I pointed out the lower highs earlier this week and the support at $48.85, once it broke the gates fell and the castle fell. just a huge drop. those $48 puts I kept blastin on the board at $.30, $.22, $.14 hit $1.70!!! it was a huge move and why we trade options. I think AXP has further downside, ultimately $41 this year and well below it next, for now we are looking for $44.50 - $45.50

the play --->>> AXP $45 nov25 puts $.36

axp

CAT $93.93 (chart) still above the trendline, hasnt broken out of the triangle like SPY, we saw how tragic that will be once it happens. for now CAT calls, I think $97.50 next spot assuming we dont crater out of the gates monday

the play ---->> CAT $97.50 nov25 calls $.64

cat

IBM $185.24 (chart) as long as she holds above that trend line its game on..... obviously I think shes going down, but dont fight the tape

the play --->>> IBM $190 calls $.64 ibm

CRM – Can Pigs Fly?

So the most bloated stock on the planet reported earnings after hours. No it doesn’t sell burritos… and no it doesn’t have anything to do with coffee. Salesforce.com, a darling of WallStreet since the 2009 rebound, reported after the bell with numbers that came in well above expectations. Not only did it beat revenue numbers and the EPS estimates, it raised guidance for next quarter and the next fiscal year. Good news right?

 

Even Pigs can fly
Even Pigs can fly

 

Well hold on. People were talking about CRM and its 600+ P/E ratio the entire week, and it seems folks got a little weak in the knees when they didn’t see a “Blowout” quarter.

 

Seemed the thing that people focused on was CRM’s bookings, which didn’t grow at it’s normal 30% clip and of course, that was the first question by the analysts on the conference call.

 

Yes, the CEO did sound like he was getting some action from Monica Lewinski as he read his script. But hey, who doesn’t want a CEO to sound bullish about his company?

 

We will see what the verdict on CRM is tomorrow. Bull.. Bear? I do think it will rally after the open. Retail Joe has no effect on the stock price, and those will be the ones who scream “Bloated Pig” and sell their 71 shares.

CRM – SalesForce.Com Ready to rock or ready to roll???

Up and down… Buy and Sell… Short and Long… Easy market trades. At the end of each one of those, there is someone who is right, and someone who is wrong. Betting on a stock to go up or down would seem to be an easy thing to do, and when you bet on a stock to go down long enough, eventually you will be right. That was the case with NFLX… that was the case with GMCR to an extent, and now folks are saying CRM is the next one to tumble.

 

CRM
CRM - Salesforce.com

Why? Because it seems severely overvalued on a fundamental basis… more specifically it’s P/E ratio which currently sits at an insane 675. To put that in perspective, SAP (SAP AG), a very similar company, trades at a 19.69 P/E ratio. Is that enough reason for it to fall? We shall see as CRM reports its 3Q on Thursday with much anticipation.  Is the stock priced for perfection? A miss on either the EPS side, revenue side, or outlook side, could be devastating.

 

So what are we looking for on Thursday from CRM? $575 mil in revenues and a .31 EPS should keep folks some what happy, but I do feel CRM will need to beat estimates and be rosy about future prospects to really see some upside.

 

So you ask, what are my thoughts?

 

Glad you ask that question. The retail investor looks at this stock and says “Easy Short”…  Well that’s what they have been saying for over a year now. Myself on the other hand, Ithought this stock would be over $200 now, but the August sell off, and subpar results for Q2 stymied that move.

 

Now I think CRM is primed to move towards $200, macro environment permitting. Here is why… CRM is a best of breed stock. Like PCLN, it has had sustained huge growth, and has continued to grow. Last Quarter revenues grew at over 38%, and this Q shouldn’t be any different.

 

Look at the past 2 years of earnings growth:

 

31-Jul-11

20.31%

30-Apr-11

38.02%

Jan. 31, 2011

60.50%

Oct. 31, 2010

85.83%

31-Jul-10

112.37%

30-Apr-10

180.74%

Jan. 31, 2010

312.36%

Oct. 31, 2009

612.77%

 

This companies a beast and I really think she moves 10-15% after earnings. Last I will leave you with what the analysts are saying. I usually don’t side with the analysts, but seems to me they have been dead on. Well, that’s after they started believing in the company when it broke $100.

Jefferies Remains Positive on salesforce.com (CRM)

Salesforce.com expected to report an above consensus quarter, says Credit Suisse

Salesforce.com price target raised to $163 from $138 at Caris

Citi: Salesforce.com Has Ways To Win You Don't Even Know About

 

I will leave you with that. Chart is below and play accordingly.

 

CRM - Sales Force.com on 11-15