March 28th 2013 Watch List


Futures were down sharply over night. The bears went to sleep with champagne wishes and caviar dreams and woke up with some bad morning breath. Same story different day. Futures are now a little higher, go figure. We are back near multi year highs and every single negative event the last 4+ years has been bought and those buying are doing very well. BTFD, it worked great yesterday as we came all the way back from the opening lows, just like I said yesterday in the watchlist before the open. Yesterdays watchlist of VXX puts FFIV calls and FB calls was a 3 for 3. The day before was even better with the NFLX $190 calls at $.45 hitting over $7.50, the BIDU $87.5 from .29 to $1.10 and the $90's from .05 to $.11.

Weekly options expire today, the markets are closed tomorrow. I will be looking for a few trades just for today and a few trades heading into next week.

Let's get through the analyst remarks first:

Michael Kors shares don't reflect growth potential, says Morgan Stanley
Morgan Stanley said a Michael Kors management meeting was upbeat and highlighted execution strategy. The firm views Michael Kors as one of the bet retail plays and believes shares do not reflect its growth potential. Shares are Overweight rated.

Baidu Q4 paid click growth dropped 20%-21%, says Citigroup
Citigroup estimates that Baidu's paid click growth declined to 20%-21% year-over-year in Q4, the lowest since 2009. The firm adds that Baidu’s paid click growth rate declined to 26.9% in 2012 according to its annual filing. Citi thinks the decline of paid click growth could suggest weakness of Baidu's search fundamentals and keeps a Sell rating on the stock.

Deckers Outdoor price target raised to $100 from $65 at Jefferies
Jefferies expects prices of sheepskin, Deckers Outdoor's most significant raw material, to decline in 2013 following an 80% increase the past two years. The firm estimates the price drop to add around 35c-40c to Deckers' earnings this year. Jefferies views Deckers Outdoor as the best risk/reward play in retail and keeps a Buy rating on the stock with an increased price target of $100.

Biogen price target raised to $203 from $187 at Brean Capital
Brean Capital raised its price target on Biogen following the FDA approval of Tecfidera labeling. The approval removes an overhang and suggests consensus revenue guidance of $330M is achievable. Shares are Buy rated.

Goldman Sachs initiated with a Buy at Guggenheim
Target $175.

Zillow price target raised to $70 from $50 at Citigroup
Citigroup raised its price target for Zillow citing improved cash flows following the company's first analyst day. Citi believes Zillow can achieve its new mid-term outlook of $500M in revenue and 40%-45% EBITDA margin in the next 3-4 years and keeps a Buy rating on the stock.

Nike coverage resumed with a Buy at Goldman
Target $70.

POSSIBLE TRADES I will be looking at:

KORS another positive comment today this time Morgan Stanley and most recently Goldman Sachs. Don't fight those with the money. KORS is heading over $60 and then $65 short term. Trade todays remarks via high risk calls and/or some april calls.

$57.5 weekly calls $.20
$60 april 20 calls $1.00

DECK target raised to $100 from $65, this is a big upgrade and the stock should rise 10% today alone. Two ways to trade this depending on how much risk you like to take on.

DECK $53 weekly calls $.40
DECK $57.50 april 20 calls $.40

$GS target raised to $170. Stock looks poised to break over $150 again short term. Two ways to trade this, high risk weekly or go out to next week:

GS $150 weekly calls $.10
GS $150 apr calls $1.00

$Z target raised to $70, the $60 calls for April look enticing as a trade on this projected move.

$Z April 20 $60 calls $.45

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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