Tag Archives: Watchlist

5-22 Watchlist

May 22nd Watchlist

What a great day yesterday, as the market shook off an opening drop and ramped up the rest of the day. Moves like that are the kind that options traders dream for… One directional! We haven’t had that in a few weeks, and most of the calls purchased Friday or at the open, were up big. Of course AAPL was the big winner as the 565 strikes were the most profitable trade. Lets see if AAPL continues its course, but remember to always lock some in on the way up and never look back!

 

(Subscribers read on)

Ross Stores, Inc (ROST)

It seems every week there is a stock in the retail sector moving 15%+. Fossil (FOSL), Deckers Outdoor Corp (DECK), and JC Penney (JCP) all saw their shares ripped to shreds on disappointing earnings and lower outlooks. Is the economy really starting to show signs of cracking? Maybe analysts had the bar set to high? I am sure its some of those reasons and more, but there are companies that should continue to buck the trend. Ross Stores, Inc (ROST) looks like one of them. Yes, the stock is up nearly 100% yoy, but who cares. Follow the momentum.

The market speaks, sometimes you just need to listen. Take a look at the open interest on the calls and puts expiring in 2 days:

Open Interest on ROST May calls and puts : CALLS : 33,500 PUTS: 13,847

We are betting on the upside tomorrow as Ross Stores, Inc (ROST) reports earnings before the opening.

 

Disclosure: We currently hold $65 May calls.

 

SINA Corporation (SINA)

Sina Corporation (SINA) has been an Optionmillionaires favorite over the past few months.There is nothing that an option trader likes more than a volatile stock, and SINA Corporation (SINA) sure fits the bill. SINA Corporation (SINA) reported earnings after hours, and the stock rose nearly 7%. Folks were expecting a loss, which they got, but revenue was above expectations. With all the bad press as of late, it was almost a relief that SINA Corporation (SINA) expects to still generate revenues with the China censorship crackdown.

It's one of the reasons we think there will be some serious upside upgrades tomorrow. SINA Corporation (SINA) pulled in just over $100 mil in revenues for the past quarter, yet has over 300 million users of its twitter like service. If they are able to just pull in $.50-$1 per user, they will experience some SERIOUS growth. Smart "Growth Companies" sacrifice short term profits, for long term growth. Looks like Sina CEO Charles Chao is continuing to do that, which is great news in our opinion:

Sina CEO Charles Chao said: "China's macroeconomic weakness in the first quarter the Company's brand advertising business growth moderate. We expect the macroeconomic aspects of the resistance will continue until the second quarter, however, we have begun to test the water micro- Bo brand advertising business. this advertising product recommendation engine driven by the map-based social interest, is expected to be in the second half of the year for our brand advertising business real impact. the current the microblogging advertisers preliminary feedback is encouraging, we believe that to continue major investment is necessary for social media and related projects. "

 

Of course there are the folks looking at the news release tonight seeing this headline:

Sina Corp could see further losses due to Weibo: CEO

The market is forward looking, and think this view is very short sighted. With the penetration they have, in a market with few competitors, I think SINA has much more upside then folks are giving her.I guess we will see tomorrow. Here is what we were saying on our watchlist this morning and monday:

SINA – 60 calls before the close for me, think earnings will not be too good, but the outlook and china restrictions will be the key.

SINA – reports this week as well, with RENN. Hard to figure, but I still like SINA. Not sure of the strikes yet and may wait till Tuesday AM.

 

Happy Trading!!

 

Disclosure: we hold $57.50 and $60 MAY calls

Sodastream (SODA) – pop pop fizz fizz…

 

Sodastream (SODA) is a company we have been high on for sometime and have wrote about her throughout 2012. This company has continued to produce huge results quarter after quarter, only to find the shorts holding larger and larger positions. This mornings earnings release and subsequent conference call was music to stockholders ears. Not only did they beat estimates and raise their outlook, but also announced they are finally headed into the worlds largest retailer... Walmart.

This is the news everyone was waiting for and should help keep Sodastream (SODA)'s growth story intact. We like this stock for the longer term, and think she tests $65 by the middle of the summer.

Here is what we were saying about SODA this week via our AM watchlist and chatroom:

 

SODA : old favorite that we have all played over the past few months. Thanks GMCR for scaring out some folks. SODA will beat like it has every Q, but there will be no kinks in the report this time, and stock will go $40+. Will be looking for $35/37.50s this morning for the ramp up.

 

We expect Sodastream (SODA) to be one of the stocks they will talk about at the end of 2012. Guess time will tell if we are right...

Where is the market headed tomorrow?

Most daytraders close out their positions before the close. Making a living trading stocks is all about controlling your risks, and obviously there is more risk when you hold an equity overnight. Who knows what type of news can come out before the market opens that may impact your holdings. Better to lock-in the gain or loss before the close, and wait for the next trading day. That is, unless you are an option trader. Why? Well some of the most Epic moves come from holding a position over a few days.

Lets use todays move on LinkedIn(LNKD) as an example.

Stocks like LinkedIn (LNKD) are susceptible to volatile moves which is caused by the varying opinions of the 'proper' valuation of the stock. There are those who think a stock with a P/E ratio of 800 is a bubble and then the ones with the foresight(like myself) who are more forward looking, and think LinkedIn (LNKD) is undervalued. Bulls and bears squared off today. With Greece grabbing the headlines again (puke) causing a market sell off, LinkedIn(LNKD) fell over 8% to $101.53.

Its at that moment when option traders start to salivate. Not more then 3 trading days ago, LinkedIn (LNKD) traded over $120, now it sat almost 20% off its highs. CALLS! Buying the calls today at that moment would have resulted in some huge returns. But it those who hold for another day or two that may reap the big rewards. Take a look at the possible return today on the LinkedIn (LNKD) $11o calls. $550 into $4,400 possible.

But if you have read our blog, your know we are extremely bullish on LinkedIn(LNKD). Todays action maybe a prelude to the stock trading firmly above $120, which would result in those calls being up substantially more. Time will tell.

 

Where is the market headed tomorrow? We have used the VIX the last few months as a forward looking indicator, along with some other signals.  The VIX pushed through the upper bollie, only to fall back through it. We think this is a key reversal signal. Take a look at the chart below:

 

The great thing about options is, you only need to be right a few times out of 10 to make some serious cash. Check back after tomorrow and let us know how we did.