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Play Updates

One Drop But Lots of Gains

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Energy Play Updates


NE $32.21 +6.31 - Noble

For the week after their earnings Noble was a strong performer rebounding +$11 off Tuesday's lows. They announced a 4-cent quarterly dividend for shareholders of record on Nov 12th. Noble runs a fleet of 63 offshore rigs operating worldwide. Noble was also boosted by news of a new billion-dollar contract by Transocean. No change in play.

Earnings Oct 22nd, $1.43 per share up from $1.18 and est of $1.33

Breakdown Trigger: $35, hit 10.6

Position: 2010 $40 LEAP Call YVJ-AJ @ $5.20


NOV $29.89 +4.39 - National Oilwell

Nice rebound but $32 still holding as resistance. Zacks pointed out that NOV received $2.4 billion in new orders during the quarter and their backlog hit a record of $12.8 billion. Approximately 90% of that backlog is overseas and 85% is offshore equipment. They have cash of about $1.7 billion. It all sounds good to me!

Earnings: Oct-23rd $1.44, +28% compared to analyst est of $1.31

Breakdown trigger: $28.50, hit 10/8

Position: May 2009 $40 Call NOV-EH @ $6.00


PBR $26.89 +$5.84 - Petrobras

No specific news but Latin American markets rebounded with the U.S. markets and Petrobras benefited. Petrobras said it was considering its options on development of their big offshore field given the drop in crude prices.

No earnings schedule.

Breakdown trigger: $28.50, hit 10/6

Position: 2010 $40 LEAP Call YMO-AH @ $7.00


PDE $18.79 +$4.42 - Pride

Earnings were strong on Thursday with continuing operations seeing a +62% boost in profits. Fleet utilization was 98%.

Earnings: Oct 30th, $1.09 vs .67 Q3-07 and est of $1.03

Breakdown trigger: $20, hit 10/6

Position: 2010 $25 LEAP Call YAD-AE @ $5.00


RIG $82.33 +$16.07 - Transocean

Transocean announced a new $1.17 billion contract for an ultra deep water drill ship that can drill in 12,000 ft of water and drill 40,000 foot wells. The new rig's day rate equates to $640,000 per day in rent. The client was not disclosed but the day rate was a record. The new contract shocked a bunch of naysayers who had been predicting the decline in drilling costs. The contract news plus earnings from others in the sector helped propel RIG +$25 off its Tuesday lows.

Earnings schedule: Nov-5th

Breakdown trigger: $80, hit 10/6

Position: 2010 $100 LEAP Call YDR-AZ @ 13.40


Non-Energy Positions


UWM $25.76 +5.85 - Russell 2000 Proshares Ultra ETF

We were stopped out of the UWM play on Tuesday when the market took that monster dive. I sent an email out that night telling everyone to buy the opening dip on Wednesday. UWM opened at $21.04 and dipped to $20.48 in the first 30 minutes before taking off again.

I apologize for placing that stop too tight. I really did not think it would break $18 but with 1000-point swings in the market it is impossible to think any stop is safe.

I am still expecting a strong move higher over the next three months so we have plenty of time to watch this position. If the Russell moves back to 700 the UWM should hit $50. The dollar we lost on the stop is chump change compared to our potential profit.

ETF Info:

Ultra Russell2000 ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the daily performance of the Russell 2000 Index.

Recommended 10/23 at $19.94 on the UWM
Stopped at $18 on 10/28 ($2.90, -$1.10)
Reentered at $20.50 11/29 open ($4.40)

Position UWM $25 April Call Option ULX-DY @ avg cost $5.50


ATI $26.54 +$5.25 - Allegheny Technologies

ATI posted better than expected earnings but warned that nobody was protected from a protracted slowdown in global growth. ATI said it had $273 million in cash and no debt and could weather any slowdown with no problem. A challenge is the machinist strike at Boeing, which halted production on the 787.

Earnings: 10/22 -26%, $1.45 vs $1.88 year ago, $1.44 est

Breakout trigger: $26, hit 10/13

Position: 2010 $40 LEAP Call YFQ-AW @ $3.60


BAC $24.17 +$3.10 - Bank of America

Decent recovery in BAC but nothing to get excited. The banking bailouts are still too new for anyone to really know if they are working. Keep the faith here! No specific news of note.

Earnings: Oct 6th @ 15 cents

Entered: Oct 13th @ $20.87

Position: 2010 $25 LEAP Call WBA-AE @ $5.90


GS $ 92.50 -7.90 - Goldman Sachs *** Stopped ***

Something stinking at Goldman. The stock price continues to be under pressure despite lots of positive news. Somebody knows something and the market is in the dark. We were stopped on the Tuesday dip at $89.

Earnings were Sept 16th

Breakdown Trigger: $100, hit 10/9

Position: 2010 $120 LEAP Call WSD-AD @ $23.75, exit $19, 10/28


JPM $41.25 +$5.82 - JP Morgan

We came within 50 cents of being stopped on Tuesday and JPM used that dip for an $8 rebound. On Friday JPM said they were modifying mortgages and putting a moratorium on foreclosures on $70 billion in mortgages and 400,000 customers. This prompted a +10% gain. Hopefully we are out of the woods on JPM. BAC is modifying 500,000 loans. This has got to help home prices eventually.

Earnings: Oct 15th @ 11 cents

Breakdown trigger: $40. Hit 10/6

Position: 2010 $50 LEAP Call WJP-AJ @ $6.00


XLF $15.53 $+1.98 - Financial SPDR

I am encouraged by the uptick in the XLF and hopefully as more banks step up to the table to take the Fed money the sector will pick up some speed.

Breakdown trigger: $17, hit 10/6

Position: 2010 $20 LEAP Call WFS-AT @ $3.00

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