Fed Still Measured
The Fed hiked interest rates by another 25 points and retained their measured pace language. As always the markets reacted with extreme volatility on the announcement with strong moves in both directions. Elsewhere there were conflicting signs once again on the health of the economy but nobody was listening.
Eli Lilly - LLY - close: 59.75 change: +0.84 stop: 57.49
Why We Like It:
BUY CALL JUL 55.00 LLY-GK OI=11218 current ask $5.80
Picked on May xx at $ xx.xx <-- see TRIGGER
Strayer Education - STRA - cls: 103.41 chg: -5.25 stop: 107.25
Why We Like It:
BUY PUT JUL 105.00 SDQ-SA OI=120 current ask $6.50
Picked on May xx at $ xx.xx <-- see TRIGGER
Avalonbay - AVB - close: 71.82 change: -0.16 stop: 67.49
No change from our previous update on 05/01/05. The market went nowhere for most of the session and shares of AVB merely churned sideways without the late day volatility seen in the major averages.
Picked on April 24 at $ 70.05
Chubb Corp - CB - close: 82.57 chg: +1.10 stop: 77.49
Shares of CB continue to show relative strength and the stock added another 1.35 percent. No change from our previous update on 05/01/05.
Picked on May 01 at $ 81.78
Golden West Fincl - GDW - close: 63.85 chg: +0.68 stop: 59.95
Banking indices closed fractionally in the red today and GDW showed relative strength with a 1.07 percent gain. No change from our previous update on 05/01/05.
Picked on April 26 at $ 62.55
Invitrogen - IVGN - close: 75.20 change: +0.22 stop: 71.49
Shares of IVGN showed some volatility this morning with a drop to $72.76 before quickly surging higher. IVGN hit a high of $75.72, which was more than enough for our TRIGGER/entry point at $75.51. The play is now open. We did hear some slightly negative comments about IVGN from an analyst on CNBC today but shares did not react. The stock looks poised for more gains tomorrow. We are still buyers although more conservative traders may want to see a little more confirmation before buying calls. Remember we are suggesting caution on all our bullish plays since the markets are currently bouncing inside their intermediate down trend.
Picked on May 03 at $ 75.51
Nucor - NUE - close: 51.15 chg: +0.15 stop: 49.95
No change from our previous update on 05/01/05. Our current trigger to go long is at $55.05 but more aggressive traders might want to consider longs if NUE pushes above the $52.50 level.
Picked on April xx at $ xx.xx <-- see TRIGGER
Websense - WBSN - close: 52.11 chg: -0.74 stop: 49.49
We would watch for a bounce in the $51.00-52.00 region and use it as a new bullish entry point. We see no change from our previous update on 05/01/05.
Picked on April 27 at $ 52.85
Adobe Systems - ADBE - close: 57.29 chg: +0.14 stop: 60.26
There was no follow through on yesterday's weakness as ADBE consolidated in a tight range above its 200-dma. Meanwhile there were additional comments out today echoing yesterday's analyst sentiment that MSFT was not an immediate concern as competition to ADBE. In other news Macromedia (MACR), which is being acquired by ADBE, reported earnings today that beat estimates by 2 cents. MACR also said they were restating results for the last six years.
Picked on April 26 at $ 59.12
CDW Corp - CDWC - close: 54.79 chg: -0.07 stop: 58.01
No change from our previous update on 05/01/05. In the news CDWC announced the next annual shareholder meeting will be on May 11th.
Picked on April 24 at $ 55.68
Infosys Tech. - INFY - close: 58.01 chg: -0.41 stop: 62.51
There isn't much happening in shares of INFY lately and right now that's just fine with us. The stock remains under the $60.00 level of what should be round-number resistance and it remains under its simple 10-dma. Tomorrow could be an important day as both the NASDAQ and the GSO software index are nearing short-term resistance.
Picked on April 26 at $ 58.24
Lehman Brothers - LEH - close: 87.90 chg: -0.55 stop: 94.05
Shares of LEH continued to sink following Monday's decline. Fashionably late Merrill Lynch decided to lower their earnings estimates on the big brokers (GS, LEH, and MWD) following Monday's downgrades by UBS and MWD. We see no changes in our strategy. Our target is the $86-85 level.
Picked on April 29 at $ 89.45
Marriot - MAR - close: 60.87 chg: -0.43 stop: 65.01
MAR continues to sink and the stock is nearing our target in the $60.00-58.00 range. Readers can prepare to exit. Conservative players may want to exit early as the $60 level might act as short-term, round-number, psychological support. MAR is getting a bit short-term oversold and due for a bounce. Don't be surprised to see a bounce back to $62 or $63.
Picked on April 28 at $ 63.37
PACCAR Inc - PCAR - close: 65.73 change: -3.41 stop: 70.01
How fortunate! PCAR started the day with a minor gap down. Then about lunch time the stock crashed lower and broke down below minor support near $66.00. Volume was very heavy at almost four times the norm. The sudden weakness could be attributed to a downgrade by Prudential. PRU downgraded CMI, NAV and PCAR. PCAR was cut from an "equal weight" to an "under weight" (a.k.a. "sell"). PRU sees a possible slow down in the heavy-duty truck market next year. This is certainly a welcome development. PCAR did produce an oversold bounce this afternoon but we would look for a possible failed rally in the $66.00-67.00 region and use it as a new bearish entry point.
Picked on April 27 at $ 66.45
Parker Hannifin - PH - close: 60.09 change: +0.01 stop: 62.01
A sideways day in the markets produced a sideways day in PH. We see no other changes from our previous update on 05/01/05.
Picked on April 28 at $ 59.08
Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.
Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.
To ensure you continue to receive email from Option Investor please add "email@example.com"
Option Investor Inc