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June 7th, 2013 Watch List

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What a volatile week it has been, as the market has traded in a wide range on a daily basis. The SPY pulled back below the 50DMA, and then found footing later in the day to close in the green. The much anticipated May jobs report is out and came in right around expectations, although the unemployment rate move up to 7.6% from 7.5% as more folks looked for work.

I would like to think this job report is like Goldilocks and the Three Bears, and that this job report was not too hot, and not too cold... it was just right to appease those that the fed is going to take the pedal off the gas, as well as making sure things are not too bad either. Futures are moving higher on the report. We shall see if those gains hold.

 

V started the week off nicely for us, but shows how risky holding weeklies can be as not selling for more then a double on Tuesday proved painful. BPT continues its uptrend and still feel confident about $100 before June expiry. VRA had some horrible news to go with poor earnings, so that was a tough one this week, although it was upgraded today.

 

Will try for a few small lottos today. Here are some of the analyst changes for today:

 

 

 

 

 

EQIX Equinix shares should be bought on weakness, says Stifel
After Equinix (EQIX) dropped in after-hours trading based on Iron Mountain's (IRM) statement that it is experiencing difficulties with qualifying for REIT status, Stifel thinks that past favorable rulings on data centers' applications for REIT status bode well for Equinix. The firm reiterates a $265 price target and Buy rating on Equinix

 

 

FB Facebook recommended ahead of product launches at Morgan Stanley
Morgan Stanley recommends using recent weakness to add to Facebook positions ahead of 2H and 2014 product launches that include video advertising and local discovery ad product, among other reasons. Shares are Overweight rated with a $34 price target

 

VMW VMware downgraded to Hold from Buy at Drexel Hamilton

 

VRA Vera Bradley upgraded to Neutral from Underperform at Sterne Agee
Sterne Agee upgraded Vera Bradley to Neutral due to valuation

 

LULU Lululemon upgraded to Underperform from Sell at CLSA
CLSA upgraded lululemon to Underperform based on full valuation and reduced product issues. Price target raised to $85 from $55

 

ANF Abercrombie & Fitch upgraded to Buy from Neutral at BofA/Merrill :

 

MELI MercadoLibre downgraded to Neutral from Overweight at JPMorgan
JPMorgan downgraded MercadoLibre with a $120 price target citing valuation

 

AAPL Apple checks show downward trending iPhone sales, says Jefferies
Jefferies said its channel checks indicate iPhone sell-through is trending downward in the June quarter to around 30M units versus 35M units in the March quarter. The firm believes iPad minis are cannibalizing more than expected and keeps a Hold rating on Apple shares with a $420 price target

 

SODA SodaStream price target raised to $82 from $66 at Citigroup
Citigroup raised its price target for SodaStream shares after meeting with management and keeps a Buy rating the stock. Citi expects SodaStream's products to increase at a faster rate than previously expected due to expanding markets and new products launches. The firm notes management said "no comment" regarding recent merger headlines

 

 

 

Here are some of the strikes I will be looking at for the open:

 

 

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
LNKD CALL $175.00 Weekly 0.34 0.35
TSLA CALL $100.00 Weekly 0.85 0.40
SINA CALL $60.00 Weekly 0.10 0.05

 

 

Hope to see you Sunday night at 10:30pm for the week ahead!!

 

Lets have a great day!

 

- JB

Is This Stock In For A Big Turnaround?

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Six months ago Best Buy was trading at its lowest levels in 10 years.  The company was struggling and investors were running for the hills.  Today the stock has nearly tripled in price making those who thought a turnaround was possible substantial profits.  Below is $BBY chart and a chart of the $20 June Calls.

bby bby1

The $20 June calls going for $.10 near BBY's  December lows recently surpassed $8.00 and closed today at $7.07.

10 contracts bought at $.10  = $100 + commission

10 contracts sold at $7.00  = $7,000 - commission

You can see the potential profits for spotting a turnaround story before the stock price starts turning around or even in the early stages.

I think we have another potential turnaround story stock that has yet to appreciate significantly off recent lows.  It's a well known name to you, JC Penney.

The stock in the middle of April hit a low of $13.55.  It closed today just over $18 a share.  I think a rally to $25 and change is coming heading into the summer.  A break of that resistance will bring the stock back over $30 a share.  That may be a long way off, if it ever does happen, but I think it is very likely down the road.

I may wait for the downward trend line to be broken to the upside.  That break may come with a 10% or better move, which will make the options more expensive.

jcp65 jcp3 jcp651

 

More than likely I will get the November calls first and if the stock dips back to the bottom of the channel I will open up shorter term options as well.

I am looking at:

November 27 Calls for $.50

and less time to expiration:

August 23 for $.41

The analysts are starting to get on board:

J.C. Penney initiated with a Buy at Sterne Agee
Target $23
J.C. Penney sales continued acceleration in May at Cleveland Research
Cleveland Research said J.C. Penney sales and traffic continued to accelerate in May driven by the reintroduction of circulars and coupons and that aggressive inventory control is resulting in positive channel commentary for June and July. The firm now expects Q2 comps of flat and EPS of (50c) vs. consensus (80c).
J.C. Penney sales growth may resume by July, says JPMorgan
JPMorgan said J.C. Penney comp sales growth may resume by July given easy year-over-year comps. 
J.C. Penney upgraded to Buy from Hold at Maxim
Maxim upgraded J.C. Penney on expectations the company's strategy changes under new CEO Mike Ullman will drive traffic. The firm said its recent channel checks indicate that store traffic has increased and it raised its price target for shares to $27 from $16.50. :theflyonthewa

While I would enjoy turning $100 into $7k on JCP, if a rally is coming like I think it will, those August $23 and November $27 calls should head north of $2 for a tidy profit and a nice reward for getting into a turnaround story before the stock turns around.

June 5th, 2013 Watch List

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The streak is over for the DOW. After barreling higher in the morning, the bears took over and took the SPY down over 2pts from the 165 high. Economics ABE from Japan outlined his much anticipated blueprint to lift the country out of it’s lost decades. Skeptics think a decreasing labor force is the major problem, and that went unaddressed. The Nikkei was down over 3% again in a volatile session. Europe is also red this morning.

ADP numbers came out this morning below expectation - 135k vs 170k. Some folks may read into this number in anticipation of fridays report, and bad news may continue to boost the market like the ISM number on Monday. I guess we shall see!

 

Here are some of the analyst changes for today:

 

 

Salesforce.com organic growth to expand as result of deal, says Oppenheimer
Oppenheimer thinks that Salesforce.com's (CRM) acquisition of ExactTarget (ET) will cause Salesforce.com's organic growth to accelerate and drive demand for its marketing products. The firm is upbeat on the deal and keeps an Outperform rating on Salesforce.com

 

First Solar coverage assumed with a Sell at Maxim
Maxim initiated First Solar with a Sell rating and $42 price target. The firm believes share valuation is rich based on earnings potential, capex, and insufficient backlogs

 

Dollar General weakness likely provides attractive entry point, says Wells Fargo
After Dollar General reported lower than expected Q1 revenue, Wells Fargo believes that the company is still a high quality growth retailer. The firm trimmed its price target range on the stock to $53-$58 from $56-$60 and keeps an Outperform rating on the shares

 

Salesforce.com acquisition valuation reasonable, says Susquehanna
Susquehanna believes Salesforce.com's (CRM) acquisition of ExactTarget (ET) is a reasonable multiple compared to other recent acquisitions. The firm believes the acquisition makes good strategic sense from a market awareness and market opportunity standpoint. Shares are Positive rated with a $50 price target

 

Bed Bath & Beyond upgraded to Buy from Neutral at Nomura
Nomura upgraded Bed Bath & Beyond to reflect integration of its merchant group into its main NJ facility, normalizing margins, an improving comp outlook, and valuation. Price target raised to $82 from $72

 

JA Solar downgraded to Sell from Neutral at Goldman
Goldman believes JA Solar's margin strength in high-ASP markets looks unsustainable given tariff uncertainty. Price target lowered to $4.20 from $4.50

 

Intuitive Surgical Monopolar shipments have resumed, says SunTrust
SunTrust's checks confirm that Intuitive Surgical has resumed shipments of a new updated version of its Monopolar Scissors and believes the impact from the urgent notification and the stop shipment that has been in place for three weeks has been minimal. Shares are Buy rated with a $647 rice target

 

Facebook recent pullback a buying opportunity, says Piper Jaffray
Piper Jaffray says the 19% pullback in shares of Facebook since the company reported Q1 results on May 1 provides a buying opportunity. Piper attributes the sell-off to expectations that ad growth rates will decelerate in the June quarter and reports suggesting Facebook's momentum among teens is slowing. Piper believes shares can rebound and keeps an Overweight rating on the stock with a $38 price target

 

Salesforce.com upgraded to Conviction Buy from Buy at Goldman
Goldman upgraded Salesforce.com to the Conviction Buy List due to valuation, accelerating bookings growth, new product categories, and an expanding footprint. Price target is $60

 

Caterpillar estimates lowered at Goldman
Goldman lowered Caterpillar estimates due to a reduction in 2014-15 mining capex estimates and lower forecasts for U.S. construction equipment capex. Shares remain Neutral rated with a $97 price target down from $100

 

 

 

Again folks, have been keeping it small this week. I bought some BPT 95 calls yesterday @ .25 and may look to get some higher July calls possibly today. Still haven’t added my VRA position and did not buy any CME yesterday as it looked weak after the open. Here is what i am look at for the open:

 

 

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
BPT CALL $100.00 September 0.50 0.35
VRA CALL $30.00 JULY 0.25 0.20
CME CALL $72.50 June 0.35 0.30

 

 

Lets have a great day!

 

- JB

June 4, 2013 Watch List

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After a rocky morning, the market found its footing and closed solidly in the green. There were moments in the morning where it sure looked like the market was going to sell-off in rapid fashion, but $163 seemed to hold well, and the specter of another green tuesday gave stocks support.

Folks are finally figuring out the heads bulls win, tails bears lose environment we have been in for the past 2 years. Yet now they think good news will cause a sell-off, which maybe possible with Fridays Jobs numbers due out for May. It was April’s job numbers that sparked the next leg in the 2013 rally, let’s hope May numbers do not derail it.

 

Today we go for #21. A streak that will probably never be beaten. Here is a great analysis by UPB: https://www.optionmillionaires.com/2013/twenty-one/

 

Futures are slightly green this morning and sure feels like the bulls are going to make it happen today.

 

Gold and Silver are giving back all the gains from yesterday. I spoke about the ISM number yesterday giving more hints of deflation which should spark more selling in commods. The index dropped to 49, the lowest since June of 2009 and shows contraction. I think this is more a function of folks waiting for lower prices, then an actual demand issue. The Fed can drop freshly printed hundreds from 747s all over the US, but if folks put the money under their pillow, inflation will not happen. Same goes with those banks that are not giving out loans...ect.

 

Had Visa(V) on the watchlist this morning on a GS price target raise, and the investor conference on Thursday. Chart looked very nice and figured she would bounce back into the 180s, which she did. Still think she has some legs this week and could break into all-time highs into Thursday. Here is the trade idea sent via text: https://www.optionmillionaires.com/2013/text-trade-idea-from-this-morning-update/ I will not be sending out a text when i close the trade, but they are already a double so would make sense for most to at least lock half in and ride freebies.(Not my cup of tea).

Also, here is UPB’s thouhts on AAPL this week: https://www.optionmillionaires.com/2013/aapl-offering-a-great-trade-set-up-for-june-chart/

 

Hopefully we get a nice steady ramp today on the SPY into the $165-166 range.

 

Here are the analyst changes for today:

 

 

 

Ulta Salon downgraded to Neutral from Buy at Goldman
Goldman downgraded Ulta Salon ahead of expected 2014 investment to strengthen its e-commerce offering. Price target raised to $98 from $93

 

Buffalo Wild Wings removed from Focus Idea List at RW Baird
Baird removed Buffalo Wild Wings from the Focus Idea List due to outperformance. The firm maintains its Outperform rating and would be aggressive buyers in the low $90s. Price target remains $95

 

Cerner coverage resumed with a Buy at Goldman
Target $115

 

Monster Beverage sales accelerate in May, says Goldman
Monster disclosed at its shareholder meeting yesterday that April/May combined gross sales were +9.4%, implying May gross sales growth of 13%, according to Goldman. In addition, U.S. Nielsen c-store data accelerated to +9.7% for the 4 weeks ended May 25 vs. +5.1% for the four weeks ending May 11. The firm expects shares to be up on encouraging May trends and believes 2H 2013 looks attractive for the company given improving international margins and easier comps. Shares are Buy rated

 

TripAdvisor price target raised to $70 from $60 at Macquarie
Macquarie believes TripAdvisor's will benefit from increased OTA competition and that its ongoing roll-out if its user-friendly UI will drive increased traffic on its site. Shares are Outperform rated

 

priceline.com price target raised to $915 from $845 at Macquarie
Macquarie raised priceline.com estimates due to increased confidence in Bookings.com U.S. market share gains. Shares are Outperform rated with a $915 price target, raised from $845

 

CME Group upgraded to Outperform from Market Perform at Wells Fargo
Wells Fargo upgraded CME Group on expectations interest rates and equities will add to the company's to growth. The firm raised its price target range for shares to $80-$90 from $55-$65

 

LULU Lululemon to meet or beat high end of guidance, says William Blair
William Blair expects lululemon to meet or beat its Q1 earnings estimate of 30c, which is at the high end of the company's 28c-30c guidance. The firm said its channel checks indicate lululemon's traffic trends were healthy in Q1 despite the shortage of black luon. William Blair continues to like shares of lululemon with an Outperform rating

 

BofA/Merrill expects Under Armour to provide a strong revenue outlook
BofA/Merrill said expectations are high heading into Under Armour's analyst day tomorrow but the company should provide strong revenue outlook of 20-25% for the next three years. Shares are Buy rated with a $68 price target

 

Six Flags price target raised to $80-$83 from $71-$74 at Wells Fargo
Wells Fargo increased its target on Six Flags as the firm believes that the company will benefit from strong initial 2013 season pass sales and higher ticket prices. The firm notes that the stock has a high dividend yield and it keeps an Outperform rating on the shares

 

 

Will be keeping it small today, like i have been for the past few weeks. Only position added yesterday were the V calls. Will look to trade CME calls for the first time in over a year, as well as trying to get into VRA before earnings.

 

 

Stock Ticker Call/Put Strike Expiration Closing Price Entry Price
VRA CALL $30.00 AUGUST 0..35 0.30
VRA CALL $30.00 JULY 0.20 0.15
CME CALL $72.50 June 0.32 0.35

 

 

 

Lets have a great day!

 

- JB

$AAPL Offering A Great Trade Set-Up For June? (CHART)

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$AAPL was all the rage this time last year.  The stock was over $500 and on its way over $700 a share.  The stock tumbled from $700 to under $400 over the span of 6 months and the analysts who were busy upgrading the stock in 2012 were just as busy downgrading it as it broke down.  The most important thing to take from $AAPL, from an option traders perspective, is that the stock can move dramatically in either direction over short periods of time.  I recall last year watching AAPL gap higher 2-3% on a routine basis.  The fire that burned to buy AAPL is gone... for now.

$AAPL remains on the back burner as traders focus on other stocks such as $TSLA.  I do think the time is right to trade $AAPL for a move back over $500.

I will be looking for both weekly and monthly calls for $AAPL as I believe the stock, if it can break through the neck line of its inverted head and shoulders pattern, should see $500 in a short period of time.

aapl2

 

 

I am looking to buy this weeks $460 calls currently at $1.79 and will wait for a better price.

I also would like to get a few June Monthly calls, with the $490 at $1.19 a good place to start.  I will let you know in the chat room/forum if and when I get in, and at what price.