For Silver Members and Above

To view this post you must be a Silver Level Member or above.

December 23rd, 2013 Watch List

1 Comment

Another great week in the books, with the SPY adding another 2.41% and closing at all-time highs. This is a script that has played out many times in 2013. With six trading sessions left, it will be interesting to see if we can melt higher and close out 2013 over $185 on the SPY. Considering there are no major reports or catalysts on the horizon that could stall a rally, it seems like going higher is the path of least resistance

For those that missed the Week Ahead Webinar, here's the link: https://www.optionmillionaires.com/forum/showthread.php/746-The-Week-Ahead-With-UPB-and-JB-12-22-2013

Also, here are some nice charts and ideas from UPB: https://www.optionmillionaires.com/charts-ebay-sbux-gs-aapl/

The big news today is the China Mobile and Apple deal, something that's been rumored for some time but finally came to fruition. Apple is up nicely pre-market as analysts have put out positive comments. I've posted some thoughts on the deals on twitter and StockTwits. I'm not bearish on the deal. I'm just seeing folks hyping it up like AAPL is going to $600 today and wanted to temper the enthusiasm. I also don't have a position, so I hope anyone in calls makes out well today and the stock goes to the moon!

Don't forget that the market closes early tomorrow at 1PM, and that it's also closed Wednesday.

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

PCYC Pharmacyclics recent pullback a buying opportunity, says Goldman
Goldman views the recent pullback in Pharmacyclics as a buying opportunity and sees multiple catalysts that include Ph. 3 Resonate data by the end of January, expected FDA approval of Imbuvca for r/r CLL, and a clean label for r/r CLL. Shares are Buy rated with a $165 price target
GME GameStop stock set up very well into 2014, says Oppenheimer
Oppenheimer views the recent pullback in GameStop's stock as much more technical than fundamental and expects the company's EPS to consistently top expectations over the longer term. The firm keeps a $60 price target and Outperform rating on the shares
AAPL Apple to get around $4 EPS boost from China Mobile deal, says Cantor
Cantor says that, at the midpoint of its forecast, it expects Apple's (AAPL) deal with China Mobile (CHL) to increase the U.S. company's 2014 EPS by about $4. The firm expects Apple to sell 20M-24M iPhones to China Mobile customers in 2014 and it keeps a Buy rating on Apple
FB Facebook ad intensity increased during holiday season, says Cantor
After conducting checks, Cantor Fitzgerald believes that Facebook's ad intensity rose during the holiday season, with its ad load rising. The firm increased its estimates for the company and raised its price target on the shares to $65 from $63 while reiterating a Buy rating
AAPL Apple price target raised to $650 from $600 at Stifel
Stifel raised Apple's (AAPL) price target to $650 following the official multi-year agreement with China Mobile (CHL) for the iPhone 5s and 5c. The firm believes incremental EPS from the China Mobile ramp could total $4-$8 per share after the first 12 months. Shares are Buy rated
FIVE Five Below upgraded to Outperform from Neutral at Credit Suisse
Credit Suisse upgraded Five Below given sustained +25% revenue growth and +30% EPS growth, compelling merchandise margins, and demographic appeal and growth. Price target raised to $52 from $46
TIF Tiffany fundamentals intact after arbitration decision, says Sterne Agee
Sterne Agee analyst Ike Boruchow believes Tiffany has the cash on hand to pay the $480M total award in the arbitration with Swatch. He says that while it was surprised by the decision, the news eliminates a long-term overhang on the stock. Boruchow recommends buying shares of Tiffany on any weakness and keeps a Buy rating on the stock with a $100 price target

I'll be looking to get into some of the positions I talked about last night, like SCTY weekly as well as trying to add a position in SSYS

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
SSYS CALL $145.00 January 0.80 0.80
SCTY CALL $60.00 Weekly 0.55 0.55

A reminder: I'll be doing a Webinar on Thursday for some stocks to watch in 2014:

https://www.optionmillionaires.com/top-5-stocks-start-2014-webinar/

Let's have a great day!

- JB

Trade Recap For Today: December 19th, 2013

6 Comments

The day after the massive Fed-induced rally the markets took a breather and only the Dow closed in the green, though that was only at a fractional amount.

Despite the lack of direction, some individual stocks did really well today and some of my favorite trades started to pan out.

I've been bearish on gold since the Spring and we finally headed towards the June lows, with the precious metal falling nearly 4% to 1189, only $9 away from its multi-year lows. The GLD puts I bought @ .46 yesterday closed at $1.45, and I think we continue to fall tomorrow.

MLNX was a text trade idea this week. It's a stock I have spoken about a bit over the past few weeks and it finally looked set to break out in a major way after testing the $37 level. Unfortunately, the stock didn't cooperate. That is, until today. MLNX ramped from the open, hitting an intra-day high of $39.73.

The text idea I sent out @ .30 x .40 looks much better now with MLNX options hitting .90 and closing at .60 x .75. That just goes to show you that you never count a position out. I love MLNX and will have more on that one in the coming weeks. MLNX is also one of my top picks for 2014.

SCTY has been on my watchlist and "week ahead" posts since the end of the summer and days like today show why I make sure I have a position every week. SCTY ramped out of the gate and hit a high of $58, making the $55 calls I bought @ .50 worth $3.40 each. I also bought some of the $59 calls this morning @ .10 and those hit a high of .75. I still love SCTY and this stock is yet another one of my top picks for 2014.

GOOG hit a high of 1091.99 and the 1095 calls I bought yesterday @ .69 average hit $2.70. I didn't sell them, but smart folks should have. I still think it rallies tomorrow, but nothing is certain.

I also sold some CROC $47 Dec calls I've been holding for a few weeks @ .50 from .55. They expire tomorrow and the options/stock are very illiquid. I didn't want to risk getting stuck in the position despite my continued confidence in the Australian dollar weakening.

My FB $52 puts actually hit .17 today from my .22 entry. I didn't sell, as they're my $220 protection on any market downside.

Here's the trading week so far:

SCTY $55 calls .50 to $3.40 so far (still open), $500 risk.

SCTY $59 calls .10 to .75 so far ( still open), $100 risk.

GOOG $1095 calls .69 to $2.70 so far (still open), $690 risk.

MLNX $39 calls @.35/.40 to .90 so far (still open), $390 risk.

GLD $116 puts @ 46 to $1.45 so far (still open), $460 risk.

FB $52 puts @ .22 to $.17 so far (still open), $220 risk.

Right now, the Facebook puts are off the table. I'll update tomorrow, after I close some positions. I hope this helps some folks.

I'm really in love with SCTY and MLNX now and I'll have some in-depth posts on them over the coming days.

Have a great afternoon!

- JB

December 19th, 2013 Watch List

Leave a comment

"Wow" is all I can say. Being short-term bullish for the past two years has me looking at every dip as a buying opportunity, though still open to small pullbacks. If you had told me the Fed announced a taper yesterday and that the market rallied like it did immediately after, I would call you crazy.

However; reflecting back on yesterday's taper news, it does make sense. The Fed made sure folks understood that rates will remain low even longer than what was communicated last October and that the Fed is still taking extraordinary measures to stimulate an economy that's heading in the right direction.

Also: if you missed last night's recap, here it is: https://www.optionmillionaires.com/trade-recap-today-december-18th-2013/

Plus, here's UPB’s morning video: https://www.optionmillionaires.com/upb-morning-market-video-wynn-lvs-goog-aapl-spy-tsla/

The U.S. dollar finally found a bid and is heading higher while gold is sitting at $1200 this morning, and the GLD 116 puts I bought yesterday should be looking good this morning. It sure looks like it’s heading near the multi-year low of $1180 set in June. Given the previous, one would have to think that gold continues to take a hit, especially if the U.S. dollar continues to rally.

Facebook also announced an offering this morning and the stock fell all the way to $52.65. It found a bid and is holding over $54 at the moment. Details here from UPB : https://www.optionmillionaires.com/fb-secondary-offering/

Today will be a great test for FB. True momo/growth stocks rally after an offering. Will that be the case with FB? If so, buying some $56 weekly calls may be worth a short, despite my negative outlook on the stock. Actually, let me correct myself: I'm not bearish or negative on Facebook's stock price. I just don't see the reward being worth the risk at these levels. But I've been wrong so far, and I guess only time will tell.

As to futures: well, they've been bouncing between red and green this morning and I figure they find a bid sometime during today's session. The SPY nearly tapped the 50dma yesterday afternoon and now look poised to close over $182 to end the week.

Quite a few analyst changes today. Here are the ones of note:

TIF Tiffany price target raised to $106 from $97 at HSBC
HSBC raised its price target for Tiffany shares to $106 on expectations the company's U.S. growth will pick up in the second half of 2014. The firm it would buy shares at current levels and keeps an Overweight rating on the name
ORCL Oracle Q2 results solid, says Stifel
After Oracle reported stronger than expected Q2 results, Stifel thins the company's revenue may reaccelerate over the next several quarters, while its margin could expand at a healthy pace. The firm views the shares' valuation as compelling and keeps a Buy rating on the stock
CVS CVS Caremark price target raised to $80 from $72 at FBR Capital
FBR Capital raised its price target for CVS Caremark to $80 following the company's analyst day and keeps an Outperform rating on the stock
DDD 3D Systems consensus estimates too high, says JPMorgan
JPMorgan adjusted its estimates for 3D Systems after the company acquired certain Xerox Oregon assets. The firm believes a ramp up in R&D investments in 2014 will weigh on 3D's earnings, making the consensus estimates too high. JPMorgan upped its price target for shares to $60 from $58.50 and keeps a Neutral rating on the stock
SHW Sherwin-Williams notifying customers of a price hike, says Credit Suisse
Credit Suisse has confirmed Sherwin-Williams' Paint Stores Group has been notifying customers of a price increase effective January 6, 2014. The analyst expects the hike to be in the low to mid-single digits vs. its previous expectations for a 1.5% increase in 2014 and that it could provide upside to current Street estimates. Shares are Outperform rated with a $215 price target
F Ford price target lowered to $19 from $21 at Citigroup
Citigroup lowered its price target for Ford shares to $19 after the company's 2014 outlook and keeps a Buy rating on the stock. Citi believes investors had already begun viewing Ford as a 2015 story with 2014 as a transition year, but calls the 2014 outlook a "modest setback.
PVH PVH Corp. initiated with a Buy at Janney Capital
Target $150

PCLN showed a nice bid yesterday, and it may continue to push into all-time high territory. I might try for some calls later in the morning (hopefully on a dip) as well as try to add CBRL calls yet again:

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
PCLN CALL $1,120.00 Weekly 1.25 0.40
CBRL CALL $115.00 January 0.75 0.60

Let's have a great day!

- JB

Trade Recap For Today: December 18th, 2013

Leave a comment

Anticipation for the last FOMC meeting of the year, as well as the last for Fed Chairman Big Ben Bernanke, had been building throughout the past week. Most were betting on a taper to the Fed's economic stimulus program coming in early 2014 but that turned out to not be the case. In a somewhat surprising move, the Fed announced a reduction in QE [ed. "quantitative easing"] down to $75 billion per month.

The market immediately sold off and the SPY nearly touched the 50dma of $177.09 before bouncing back in strong fashion, as investors and traders took the announcement as good news. The Fed continued to say that it will remain extremely accommodating and will do whatever it needs to do in order to keep growth on track. The big Santa Rally came seven days early!

For myself, I did think we would test the 50dma on the SPY if the fed announced a taper, and I sure as heck didn't think they would taper yet. I was also surprised that the markets rallied to all-time highs. We have some great moves on high beta names, however, and it looks like we're set to break over $182 on the SPY tomorrow.

I'm still holding my SCTY and MLNX calls, by the way. The SCTY calls were a double at points yesterday so it's a good idea to lock some in, as they're now .10 x .35. I'm extremely risky and I'll be holding my options till the very end. MLNX faded in the morning and held near $37, with the $39 calls at .10 x .25. I'll need a big move on that one this coming Thursday or Friday.

I made three more trades today. I bought FB $52 puts just in case the market did sell-off on the FOMC statement, and I figured social media stocks would take a hit:

FB 52 weekly put @ .22

I bought a total of 10, so those $52 insurance puts are now .03 x .04 or $40 from $220.

I really wanted to get into GOOG but waited until the 2PM mark. By then, the stock started ramping but the spread on the calls were too illiquid to get a good position, so I waited about 20 more minutes:

GOOG 1195 @ .69

Calls were .65 x .75 and I was able to get some averaged to .69. Those closed 1.70 x 2.15, and it's nearly a 300% move so far. I have 10 and I'll be looking to close a few tomorrow if we ramp over 1090.

Additionally, I believed gold would drop on the stronger dollar and taper news but it held strong while folks digested the Fed's announced decision. It took some time, but the U.S. dollar started to strengthen towards the end of the day and gold began to fall. I figured I would try and get a few puts just in case gold flushed under $1200 tomorrow:

GLD 116p weekly puts @ .46

They closed .51 x .54.

Most who follow in chat and read the watchlists know my style, but if you don't here you go: I'm extremely risky. I'll buy calls and hold for 500%+ gains. I will also hold calls that are up 100% and not sell them, and a few days later they'll expire worthless. That's my style and that's what's worked well for me. All you need is one or two big plays to make up for a bunch of losing trades, and most times you more then make up for the losers.

For tomorrow, I would think the rally continues or at least the market stays green, with the U.S. dollar continuing to strengthen, gold weakening and high beta names continuing to attract a nice bid.

Let's see what tomorrow brings, and have a great afternoon folks!

- JB