Option Investor
Newsletter

Daily Newsletter, Monday, 1/30/2012

Table of Contents

  1. Market Wrap
  2. New Option Plays
  3. In Play Updates and Reviews

Market Wrap

Bad Start, Lackluster Finish

by Todd Shriber

Click here to email Todd Shriber
With Europe's two G's, Germany and Greec, butting heads again, U.S. stocks got off to a dreadful start this morning, but buyers stepped in later in the day helping pare early-session losses and sending the major U.S. indexes off with only moderate declines. With Europe looming large and no marquee earnings reports to speak of before the bell, Monday had the distinct feeling of a risk off day.

Market Stats

Germany, the Euro Zone's largest economy, and Greece, perhaps the most erstwhile of the PIIGS, were commanding plenty of headlines today as European policymakers met to discuss ways to skirt a Greek default and prevent the sovereign debt crisis from escalating further. And again Greece is balking at some of Germany's demands, namely appointing an a European overseer to rein in the Greek budget.

At least Greece is close to getting beleaguered bondholders to accept loss on a 50 percent cut in the face value of more than 200 billion euros of debt, Bloomberg reported. Portugal, the ''P'' in PIIGS, is another issue. Today, Portuguese bond yields spiked to Euro-era highs, surging over 200 basis points to 17.26%. Credit default swaps issued to protect against a default on Portuguese debt are now pricing in a 70% chance the country will default in the next five years, according to the Financial Times.

Earlier this month, Standard & Poor's lowered Portugal's debt rating to junk status, but the European Central Bank has been suspiciously quiet about the Mediterranean nation. Italy held a successful bond auction today and Greece is closing in on some good news, so maybe it makes sense that Portugal is taking center stage now. With bond yields like these, it is easy to understand why.

Portuguese Bond Yields

Going back to Greece for a moment, for those not in the know, there is now a Greece ETF, the Global X FTSE Greece 20 ETF (GREK). I spend a lot time writing about ETFs for other places and when this ETF debuted in December, the best I can say is the reaction was mixed. Mixed no more and maybe a bottom has finally been found in Greek equities because GREK is up almost 23% since its debut. Year-to-date, that is a better performance than just about any other ETF tracking an individual European country. Yes, GREK is new and thinly traded. It is also on fire when a lot of folks were probably writing it off before it was even born.

Greece ETF

Here in the U.S., the one economic data point of the day was fair. The Commerce Department said personal incomes rose 0.5% last month after climbing 0.1% in November. Economists expected a 0.4% increase in December. On the other hand, personal spending fell by $2 billion last month following an $11.4 billion increase in November. Rising incomes are good, declines in spending not so much when the U.S. economy is propelled in large part by consumer spending. That much is true, but my humble opinion is that it is never a bad idea to save part of your hard-earned money.

I happened to come across an article in the Wall Street Journal recently that caught my eye regarding share repurchase plans. One of the key takeaways is with so much cash just sitting around, companies are escalating their buyback efforts. Not surprisingly, this is reigniting the debate about what is a better use of a company’s cash: Buybacks, dividends or reinvested capital?

Among the S&P 500 companies, repurchase spending totaled at least $437 billion last year, a 46% increase from 2010, estimates Howard Silverblatt, senior index analyst at S&P, the Journal noted.

Well, the Journal also included a great chart that shows companies are not all that good at knowing when to buy their own shares. Put another way, there were buybacks aplenty in 2007, not so much in 2009. Among the egregious offenders I turned up in terms of buying their own shares at bad prices: Exxon Mobil (XOM), ConocoPhillips (COP) and Netflix (NFLX). One example of a company that has executed buybacks the right way: IBM.

Buyback Chart

Speaking of Exxon, the largest U.S. oil and natural gas company, reports fourth-quarter results before the bell tomorrow. The shares were down slightly today even after the company announced it will sell its Japanese downstream operations to TonenGeneral Sekiyu K.K. for $3.9 billion. Texas-based Exxon will retain a 22% stake in the venture, but the deal effectively marks Exxon's departure from Japan, the world's third-largest economy. Wary investors can only hope that some or all of that $3.9 billion goes to oil NOT gas production.

And speaking of problems with oil stocks, Chevron (CVX), the second-largest U.S. oil company, continues to tumble and today's slide means the stock has given up its 50-day moving average. The 20-day line was taken out on the downside earlier this month. Today's bad news from Chevron? The company's Kazakh venture, TengizChevroil, said its oil output dropped 0.4% in 2011 from 2010's levels.

That and Brazilian prosecutors are out for blood against Chevron and Transocean (RIG) are preparing to pursue criminal charges against the companies related to a November spill off Brazil's coast.

Chevron Chart

Looking at the charts, the S&P 500 continues its flirtation with support at 1310, though today’s close was three points higher. Exxon's post-earnings performance will have an impact because that is the second-largest U.S. company by market value. If the S&P 500 can hang around in the 1300-1310 area, or better yet, start creeping higher, there is a nice runway back to 1350. Of course, the January jobs number on Friday will have some say in the matter.

S&P 500 Chart

Twelve of the Dow's 30 stocks closed higher today. IBM, Microsoft (MSFT) and Verizon (VZ) led the way each with gains over 1%. When the Dow closes lower by 7 points on Monday, it is difficult for me to give you any new technical tidbits above and beyond what Jim mentioned over the weekend, which is the next obvious resistance point for the Dow is 12,600 and support is 12,300. Besides Exxon, the only other Dow stock making its way to the earnings confessional this week is Merck (MRK).

Dow Chart

Same goes for the Nasdaq. With a mere 4.6-point drop, I am left with few new technical illuminations. The Nasdaq is holding above 2800 with support there and at 2775. Nasdaq earnings besides Apple (AAPL) have not been great and that trend could continue this week, imperiling the Nasdaq's gains or it could be broken.

Amazon (AMZN) and Broadcom report after the bell tomorrow and Qualcomm (QCOM) takes its turn on Wednesday after the bell.

Nasdaq Chart

I want to stop shy of saying this is a make or break week, but it is an important and that is the case excluding Europe. There are enough noteworthy names left to report earnings this week and then we have jobs Friday, so we could be in for some good moves this week. I scooped up some silver earlier this month banking on $50 or higher prices later this year and I still like oil stocks over the long haul.

Todd Shriber


New Option Plays

Sprouting Higher

by James Brown

Click here to email James Brown

Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trading ideas:

NKE, AAP, NBL, COO, PPG, CBE, UTHR


NEW DIRECTIONAL CALL PLAYS

Monsanto - MON - close: 82.29 change: +1.76

Stop Loss: 78.99
Target(s): 86.90
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
There is growing speculation that the Federal Reserve will announce some form of QE3 this year. That will be bullish for most of the commodity-related stocks. MON could be one of them. Shares displayed relative strength today with a +2.1% gain and a breakout from a two-week sideways consolidation under the $82 level.

I am suggesting we open small bullish positions if MON can trade at $82.75 or higher. MON can be somewhat volatile so we want to keep our position size small. If triggered our target is $86.90. FYI: The Point & Figure chart for MON is bullish with a long-term $113 target.

Trigger @ $82.75 (small positions)

- Suggested Positions -

buy the FEB $85 call (MON1218B85) current ask $0.79

- or -

buy the MAR $85 call (MON1217C85) current ask $1.76

Annotated Chart:

Entry on January xx at $ xx.xx
Earnings Date 01/05/12
Average Daily Volume = 4.8 million
Listed on January 30, 2012


In Play Updates and Reviews

S&P 500 Bounces Off 1300

by James Brown

Click here to email James Brown

Editor's Note:

The stock market saw a widespread decline this morning but the S&P 500 managed to rebound off round-number support near 1300.

We saw both MHK and OMC get stopped out on the market's widespread weakness this morning. Our XEC put play has been opened.

Current Portfolio:


CALL Play Updates

Berkshire Hathaway Inc. - BRK.B - close: 78.69 change: -0.73

Stop Loss: 77.75
Target(s): 84.00
Current Option Gain/Loss: -42.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/30 update: The stock market's widespread weakness on Monday morning pushed BRK.B to gap down and test support near $78.00. Any further weakness could hit our stop loss at $77.75. I am not suggesting new positions at current levels.

We do not want to hold over the late February earnings report.

- Suggested Positions -

Long Feb $80 call (BRKB1218B80) entry $0.90

01/28/12 new stop loss @ 77.75, adjusted exit to $84.00
01/25/12 new stop loss @ 77.45
01/18/12 triggered at $78.75
01/14/12 adjusted entry point strategy to use a trigger @ 78.75
01/13/12 BRK.B gapped lower, negating our entry point. Trade did not open.

Entry on January 18 at $78.75
Earnings Date 02/27/12 (unconfirmed)
Average Daily Volume = 4.4 million
Listed on January 12, 2012


Cognizant Technology - CTSH - close: 70.99 change: -0.34

Stop Loss: 68.75
Target(s): 76.50
Current Option Gain/Loss: -29.4%
Time Frame: exit prior to the Feb. 8th earnings
New Positions: see below

Comments:
01/30 update: CTSH also gapped down this morning. Traders bought the dip near its rising 10-dma. I would be tempted to wait for a bounce from the $70.00 level before considering new positions.

Our target is $76.50. We do not want to hold over the Feb. 8th earnings report. FYI: The Point & Figure chart for CTSH is bullish with an $85 target.

- Suggested Positions -

Long Feb $75 call (CTSH1218B75) Entry $0.85

01/24/12 trade opened at $71.05

Entry on January 24 at $71.05
Earnings Date 02/08/12 (confirmed)
Average Daily Volume = 2.3 million
Listed on January 21, 2012


Express Scripts, Inc. - ESRX - close: 51.19 change: -0.25

Stop Loss: 49.95
Target(s): 57.00
Current Option Gain/Loss: -36.5%
Time Frame: exit prior to February earnings
New Positions: see below

Comments:
01/30 update: Just as expected, a market drop has pushed ESRX toward support near $50.00. Shares pared their losses but still closed down -0.48%. A bounce back above the simple 10-dma near $51.50 could be used as a new bullish entry point.

Earlier Comments:
This stock could see more short covering. The most recent data listed short interest at almost 17% of the 482 million-share float. FYI: The Point & Figure chart for ESRX is bullish with a $75 target.

- Suggested Positions -

Long Feb $52.50 call (ESRX1218B52.5) Entry $2.00

Entry on January 26 at $52.67
Earnings Date 02/16/12 (unconfirmed)
Average Daily Volume = 6.6 million
Listed on January 25, 2012


Flowserve Corp. - FLS - close: 108.75 change: -0.37

Stop Loss: 105.75
Target(s): 114.50
Current Option Gain/Loss: Feb $110c: -18.9% & Apr$115c: -10.0%.
Time Frame: 3 to 4 weeks
New Positions: , see below

Comments:
01/30 update: Profit taking in FLS was pretty mild thanks to the strong intraday bounce. If the S&P 500 and FLS both open positive tomorrow then readers could use it as a new entry point. I am raising our stop loss to $105.75.

I am setting our target at $114.50 but cautious traders may want to exit at $112.00 instead. FYI: The Point & Figure chart for FLS is bullish with a $139 target.

- Suggested Positions -

Long FEB $110 call (FLS1218B110) Entry $2.59

- or -

Long APR $115 call (FLS1221D115) Entry $4.00

01/30/12 new stop loss at $105.75
01/26/12 trade opened on FLS' gap open higher at $109.21.
01/25/12 adjusted entry point strategy to buy calls when FLS hits $109.05, and use a stop loss at $105.45

Entry on January 26 at $109.21
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 400 thousand
Listed on January 21, 2012


Starwood Hotel & Resorts - HOT - close: 54.19 change: -0.17

Stop Loss: 52.95
Target(s): 57.50
Current Option Gain/Loss: +59.2%
Time Frame: exit prior to Feb. 2nd earnings.
New Positions: see below

Comments:
01/30 update: Monday looked a lot like Friday for HOT. Shares gapped open lower and then spent the rest of the day inching higher. Don't forget that we only have two days left. We'll plan to exit on Wednesday, Feb. 1st to avoid holding over earnings on Thursday morning. Given our dwindling time frame I am inching up our stop loss to $52.65. I am not suggesting new positions at this time.

Please note our new stop loss at $52.95.

- Suggested Positions -

Long Feb $52.50 call (HOT1218B52.5) entry: 1.67

01/30/12 new stop loss @ 52.95
01/28/12 prepare to exit on Feb. 1st at the close
01/28/12 new stop loss @ 52.65
01/26/12 sold half @ the open. Bid was $2.95 (+76.6%)
01/25/12 prepare to sell half at the open tomorrow morning. bid on our call is currently at $3.20 (+91.6%). We will adjust the exit target on the remainder of our position to $57.50
01/25/12 new stop loss @ 52.40
01/24/12 new stop loss @ 51.45
01/18/12 new stop loss @ $49.75
01/13/12 Triggered on a dip at $51.00
01/10/12 initial entry point did not work. New strategy: buy a dip at $51.00.

Entry on January 13 at $51.00
Earnings Date 02/02/12 (confirmed)
Average Daily Volume = 2.4 million
Listed on January 09, 2012


iShares Russell 2000 ETF - IWM - close: 79.10 change: -0.62

Stop Loss: 75.45
Target(s): 82.50
Current Option Gain/Loss: - 7.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/30 update: Profit taking in the IWM was relatively mild. The ETF came close but did not touch its simple 10-dma yet, which is the first level of short-term technical support. I am not suggesting new positions at this time.

Earlier Comments:
You may want to consider a stop closer to the 10-dma instead (currently 75.95). Our multi-week target is $82.50. Keep in mind the $80.00 level might offer some overhead resistance. FYI: The Point & Figure chart for IWM is bullish with a $90 target.

- Suggested Positions -

Long Feb $80 call (IWM1218B80) Entry $1.14

01/19/12 IWM gapped open higher at $78.13

Entry on January 19 at $78.13
Earnings Date --/--/--
Average Daily Volume = 40 million
Listed on January 18, 2012


iShares Transportation - IYT - close: 94.92 change: -0.46

Stop Loss: 91.75
Target(s): 98.50
Current Option Gain/Loss:(Jan$95c: -100%) Feb$95c: +13.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/30 update: IYT gave back just over half of Friday's gains. I don't see any changes from my prior comments. We're not suggesting new positions at this time.

- Suggested Positions -

Long Feb $95 call (IYT1218B95) entry $1.45
target 98.50

01/28/12 new stop loss @ 91.75
01/21/12 new stop loss @ 91.40
01/21/12 January $95 calls have expired.
01/12/12 new stop loss @ 89.45
01/07/12 new stop loss @ 88.75
01/03/12 IYT gapped open higher at $91.20, above our trigger at $90.75

Entry on January 03 at $91.20
Earnings Date --/--/--
Average Daily Volume = 582 thousand
Listed on December 22, 2011


Laboratory Corp. - LH - close: 90.92 change: -0.40

Stop Loss: 88.40
Target(s): 94.75
Current Option Gain/Loss: + 60.0%
Time Frame: up to the Feb. 10th earnings report.
New Positions: see below

Comments:
01/30 update: LH found support near $90 and its simple 10-dma on Monday morning. The intraday bounce is encouraging but I am reluctant to open new positions at this time.

We do not want to hold positions over the Feb. 10th earnings report. Our target is the $94.75 mark. FYI: The Point & Figure chart for LH is bullish with a $105 target.

- Suggested Positions -

Long Feb $90 call (LH1218B90) Entry $1.50

01/28/12 new stop loss @ 88.40
01/26/12 sold half @ the open, bid @ $2.65 (+76.6%)
01/25/12 sell half at the open tomorrow. Bid on the Feb. $90 call is at $3.10 (+106%).
01/25/12 new stop loss @ 87.90
01/24/12 rival DGX delivers a strong earnings report
01/23/12 trade triggered at $89.00
01/21/12 new stop loss at $86.90. Still waiting for LH to hit our entry point at $89.00.

Entry on January 23 at $89.00
Earnings Date 02/10/12 (confirmed)
Average Daily Volume = 564 thousand
Listed on January 10, 2012


Lufkin Industries - LUFK - close: 74.56 change: -0.81

Stop Loss: 73.40
Target(s): 82.00
Current Option Gain/Loss: - 30.5%
Time Frame: up to the Feb. 9th earnings report.
New Positions: see below

Comments:
01/30 update: LUFK gave up about -1% on Monday. Shares did test short-term support near $74.00. If the market drops again tomorrow we could see LUFK breakdown and hit our stop loss at $73.40. I am not suggesting new positions at this time.

Our target is $82.00 but we want to exit prior to the Feb. 9th earnings report. FYI: The Point & Figure chart for LUFK is bullish with an $85 target.

- Suggested Positions -

Long Feb $80 call (LUFK1218B80) Entry $2.95

01/25/12 triggered @ 76.60

Entry on January 25 at $76.60
Earnings Date 02/09/12 (confirmed)
Average Daily Volume = 300 thousand
Listed on January 24, 2012


Molycorp, Inc. - MCP - close: 31.12 change: -0.60

Stop Loss: 29.75
Target(s): 38.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
01/30 update: Our new trade on MCP is not open yet. The market and MCP gapped down at the open. MCP underperformed with a -1.9% decline. Nimble traders might want to wait and try and buy a dip near $30.00. I am suggesting we try our strategy from the weekend again.

I am suggesting we open small bullish positions at the open tomorrow but only if both MCP and the S&P 500 index open positive.

Earlier Comments:
This stock could see a short squeeze with the most recent data listing short interest at 38.6% of the 51.8 million-share float.

I do see potential resistance near $35 and its 100-dma but we're going to aim for $38.50 given the chance that MCP does see some short covering. FYI: The Point & Figure chart for MCP is bullish with a long-term $49 target.

Do not enter position unless MCP and the S&P500 are both positive at the open

- Suggested Positions -

buy the Feb $31 call (MCP1218B31)

- or -

buy the Mar $35 call (MCP1217C35)

01/30/12 not open yet. try again.

Entry on January xx at $ xx.xx
Earnings Date 03/08/12 (unconfirmed)
Average Daily Volume = 4.0 million
Listed on January 28, 2012


PVH Corp. - PVH - close: 76.62 change: -0.08

Stop Loss: 74.75
Target(s): 83.50
Current Option Gain/Loss: Feb77.50c: -47.9% & Mar$80c: -35.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/30 update: Losses were pretty mild for PVH on Monday but shares still broke down under short-term technical support at the 10-dma. At this point I would wait for a dip or a bounce near $75.00 before considering new bullish positions.

Earlier Comments:
The plan was to keep our position size small to limit risk. FYI: The Point & Figure chart for PVH is bullish with a $92 target.

- Suggested Positions - (small positions)

Long Feb $77.50 call (PVH1218B77.5) Entry $2.40

- or -

Long Mar $80 call (PVH1217C80) Entry $2.55

01/24/12 trade triggered at $77.60
01/23/12 trade still not open
new entry point strategy to use a trigger at $77.60, stop loss at $74.75
01/21/12 trade not open yet. try again.

Entry on January 24 at $77.60
Earnings Date 03/28/12 (unconfirmed)
Average Daily Volume = 867 million
Listed on January 19, 2012


SPX Corp. - SPW - close: 70.02 change: +0.45

Stop Loss: 67.90
Target(s): 74.75
Current Option Gain/Loss: Unopened
Time Frame: up to the Feb. 16 earnings report
New Positions: Yes, see below

Comments:
01/30 update: SPW displayed some relative strength today. The stock rallied off its morning lows to close up +0.6%. Aggressive traders may want to buy calls now. I'm suggesting readers use a trigger at $70.50 to open positions.

If triggered we will aim for the $74.75 mark but more aggressive traders could aim higher. We do not want to hold over the Feb. 16th earnings report. FYI: The Point & Figure chart for SPW is bullish with an $82 target.

Trigger @ 70.50

- Suggested Positions -

buy the Feb $70 call (SPW1218B70)

Entry on January xx at $ xx.xx
Earnings Date 02/16/12 (unconfirmed)
Average Daily Volume = 711 thousand
Listed on January 26, 2012


TJX Companies - TJX - close: 67.45 change: +0.08

Stop Loss: 66.49
Target(s): 68.50
Current Option Gain/Loss:(Jan$65c: +85.0%) & Feb$65c: +54.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/30 update: TJX also rebounded off its Monday morning lows and managed to close in positive territory. We do not want to hold over the 2-for-1 stock split on Feb. 2nd. If TJX does not hit our exit at $68.50 soon then we will exit on Feb. 1st at the closing bell. I am not suggesting new positions at this time.

Earlier Comments:
On January 5th, management announced a 2-for-1 stock split payable on February 2nd, 2012.

- Suggested Positions -

Long Feb $65 call (TJX1218B65) Entry $1.75

01/30/12 prepare to exit soon!
01/26/12 new stop loss @ 66.49, Consider taking profits now!
01/18/12 adjusted exit target to $68.50
01/18/12 closed Jan $65 calls @ $1.85 (+85.0%)
01/17/12 prepare to exit January calls at close tomorrow
01/17/12 new stop loss @ 64.75
01/12/12 new stop loss @ 63.75
01/07/12 readers may want to take profits now (Jan$65call +90%, Feb$65call +57%)
01/05/12 new stop loss @ 63.25, TJX announced strong same-store sales and a 2:1 split.
12/31/11 new stop loss @ 62.75

Entry on December 22 at $64.10
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 2.7 million
Listed on December 21, 2011


PUT Play Updates

Deckers Outdoor Corp. - DECK - close: 80.85 change: -1.77

Stop Loss: 84.25
Target(s): 77.00
Current Option Gain/Loss: - 8.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/30 update: DECK underperformed the market today with a -2.1% decline. If you look at an intraday chart you can see that the bounce failed twice under $83.00 today. I am lowering our stop loss to $84.25.

Earlier Comments:
Our target is $77.00. We want to keep our position size small because any unexpected rally might spark some short covering. The most recent data listed short interest at 14% of the relatively small 37.1 million-share float.

(Small Positions) - Suggested Positions -

Long FEB $80 PUT (DECK1218N80) Entry $3.10

01/30/12 new stop loss @ 84.25
01/25/12 DECK is not cooperating. Readers may want to exit immediately.

Entry on January 23 at $82.75
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on January 21, 2012


Cimarex Energy Co - XEC - close: 57.65 change: +0.12

Stop Loss: 60.25
Target(s): 51.00
Current Option Gain/Loss: -29.7%
Time Frame: exit prior to earnings on Feb. 15th
New Positions: see below

Comments:
01/30 update: Our new put play on XEC has been opened. Shares gapped open lower at $56.57. Our trigger to buy puts was $56.75 so the trade was opened immediately. The stock bounced near $56.00 and rebounded back to short-term resistance near $57.00. Look for XEC to show weakness again tomorrow morning (like a drop under $57.50) before opening new positions.

Our target is $51.00. We do not want to hold over the Feb 15th earnings report.

- Suggested Positions -

Long FEB $55 PUT (XEC1218N55) Entry $1.85

01/30/12 Trade opened on XEC gap down at $56.57

Entry on January 30 at $56.57
Earnings Date 02/15/12 (confirmed)
Average Daily Volume = 1.0 million
Listed on January 28, 2012


CLOSED BULLISH PLAYS

Mohawk Industries - MHK - close: 62.11 change: -1.34

Stop Loss: 61.95
Target(s): 67.50
Current Option Gain/Loss: -75.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/30 update: MHK underperformed the market today. The stock gapped open lower at $62.62 and then spiked down to $61.56 before paring its losses to -2.1% on the session. Our stop loss was hit at $61.95.

- Suggested Positions -

Feb $65 call (MHK1218B65) Entry $2.48 exit $0.60 (-75.8%)

01/30/12 stopped out at $61.95
01/28/12 new stop loss @ 61.95
01/26/12 new stop loss @ 61.75
01/17/12 MHK gapped open higher at $63.99

chart:

Entry on January 17 at $63.99
Earnings Date 02/22/12 (confirmed)
Average Daily Volume = 621 thousand
Listed on January 14, 2012


Omnicom Group - OMC - close: 46.26 change: -0.26

Stop Loss: 45.45
Target(s): 49.00
Current Option Gain/Loss: -19.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/30 update: OMC only lost 26 cents on the session but shares displayed a lot of weakness this morning. The stock gapped open lower at $45.67 and dropped to $44.97 before bouncing back. Our stop loss was hit at $45.45.

- Suggested Positions -

Feb $45 call (OMC1218B45) entry $1.80 exit $1.45*(-19.4%)

*exit price is an estimate. option did not trade at time of exit. 01/30/12 stopped out at $45.45
01/19/12 new stop loss @ 45.45, readers may want to take profits now (+66%)
01/18/12 new stop loss @ 44.75

chart:

Entry on January 12 at $45.75
Earnings Date 02/14/12 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on January 11, 2012