Sina Corp. - SINA - cls: 53.22 change: -0.28 stop: 49.99
SINA avoided most of the market's volatility on Wednesday. The stock traded sideways in a $1.70 range. Traders bought the dip twice near $52.00, which is a bullish signal. We would still consider new positions now although more conservative traders could wait for a rise past $54.00 before initiating positions. Our target is the $59.50-60.00 range. SINA is due to report earnings somewhere in the October 29th-November 8th range. Hopefully the closer we get to the end of October we'll find a confirmed date since we do not want to hold over SINA's earnings report. Speaking of earnings Baidu's (BIDU) earnings report is due out this week on October 25th. Reaction to BIDU's earnings could strongly influence shares of SINA.
Picked on October 23 at $ 53.40
BEA Systems - BEAS - cls: 17.55 change: -0.32 stop: 19.01
Steam continues to build behind the idea that this ORCL acquisition of BEAS will not happen. The BEAS board of directors rejected the offer again and no one else seems to be stepping up as an alternative bidder. Shares of BEAS lost 1.79% on strong volume. ORCL will cancel its $17 a share offer this Sunday at 5:00 p.m. Our target is the $15.25-14.75 range. We're suggesting a stop loss at $19.01 but readers could try and play with a stop above yesterday's high ($18.67).
Picked on October 23 at $ 17.87
Tsakos Energy - TNP - cls: 68.34 change: -0.10 stop: 72.16
The action in TNP could just be the sort of failed rally under resistance that we've been looking for as another entry point for puts. The stock reversed course under the 50-dma and was trading lower into the afternoon instead of rebounding with the market. Meanwhile in the news TNP announced that they would report earnings on Monday, November 5th. That means we will plan to exit on Friday, November 2nd unless shares hit our target first. Our target is the $65.10-63.65 zone. Almost all of its technical indicators on both the daily and weekly charts are bearish or they are turning bearish.
Picked on October 22 at $ 67.67 *gap down
Sepracor Inc. - SEPR - cls: 23.32 change: -0.71 stop: 25.05
Bears can take some comfort in the fact that there was no follow through on SEPR's big rebound yesterday. The stock slipped 2.9% and did not rebound this afternoon with the same gusto the broader market did. We're not suggesting new positions at this time. Our target is the $20.25-20.00 zone. We do not want to hold over the October 30th earnings report.
Picked on October 21 at $ 22.91 *gap down
(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)
Borg Warner - BWA - cls: 95.49 change: -0.18 stop: n/a
BWA ignored most of the market's volatility and continued to trade sideways as investors wait for the company's earnings report due out tomorrow morning. We are not suggesting new positions any longer. The options we suggested for a strangle were the November $100 calls (BWA-KT) and the November $90 puts (BWA-WR). Our estimated cost was $4.50. We want to sell if either option hits $7.25 or more.
Picked on October 23 at $ 95.67
Express Scripts - ESRX - cls: 57.37 chg: -1.03 stop: n/a
ESRX continued to see profit taking ahead of its earnings report tonight. Wall Street was expecting a profit of $0.57 a share. The company reported 60 cents a share and raised their earnings guidance. The stock is trading up in after hours and it looks like shares could gap above the $60 level tomorrow morning. We are no longer suggesting new positions in the stock. The options we suggested for a strangle were the November $65 calls (XTQ-KM) and the November $55 puts (XTQ-WK). Our estimated cost was $1.95. We want to sell if either option hits $3.50 or higher.
Picked on October 21 at $ 59.65
Intl. Bus. Mach. - IBM - cls: 112.95 chg: -1.73 stop: n/a
Technology stocks were the under performers today and IBM lost 1.5%. We are not suggesting new strangle positions at this time. Our November strangle suggested the November $125 call (IBM-KE) and the November $110 put (IBM-WB). Our estimated cost was $3.00. We wanted to sell if either option hits $6.00.
Picked on October 15 at $118.03
Monster Worldwide - MNST - cls: 36.02 chg: -1.15 stop: n/a
Shares of MNST lost 3% ahead of its earnings report today and the stock failed to rebound like most of the market this afternoon. Wall Street was expecting a profit of 33-cents a share. MNST reported after the closing bell with 35-cents and management guided earnings higher. The stock was trading higher after hours and looks like it could gap up above resistance near $38.00. We are no longer suggesting new positions. The options we suggested for our strangle were the November $40 calls (BSQ-KH) and the November $35 puts (BSQ-WG). Our estimated cost is $1.75. We want to sell if either option hits $2.95 or higher.
Picked on October 23 at $ 37.22
Microsoft - MSFT - cls: 31.25 change: +0.35 stop: n/a
Traders bought the dip in MSFT at $30.50 this morning and the market's rebound actually lifted MSFT (or MSFT leaded) with a new relative high over short-term resistance near $31.25. The big news for MSFT today was its win over rival GOOG for a minority stake in Facebook. MSFT made a $240 million investment, which is pocket change for the software titan. Tomorrow is the big day. MSFT reports earnings after the closing bell. Tomorrow is also our last day to open strangle positions ahead of the report. We would suggest positions in the $30.50-31.50 zone. The options we suggested for our strangle were the November $32.50 calls (MSQ-KZ) and the November $30.00 puts (MSQ-WK). Our estimated cost is $1.07. We want to sell if either option hits $1.85 or higher.
Picked on October 23 at $ 30.90
Autozone - AZO - cls: 122.01 change: +2.35 stop: 122.26
Shares of AZO completely ignored the market's weakness this morning. The stock began to climb and displayed impressive relative strength with a 1.9% gain and a breakout over its 10-dma on above average volume. AZO hit our tight stop loss at $122.26 ending the play. Keep an eye on the $125 level and its 100-dma overhead as additional levels of resistance.
Picked on October 21 at $118.67
Chipotle Mexican Grill - CMG - cls: 123.55 chg: -3.58 stop: 128.26
Shares of CMG experienced some profit taking today with a 2.8% decline. The stock did bounce from its intraday lows but not to the same degree as the rest of the market. It was beginning to look like the bears might have a chance here. Unfortunately, any bearish dreams of a breakdown below $120 are likely over following some news out after the closing bell. Standard & Poors has announced it will add CMG to the S&P midcap 400 index on October 26th. That means all the funds that track the midcap index will have to buy shares of CMG. The stock was up 2.8% in after hours trading. We are issuing the retreat order. All hands abandon ship. If you want to take advantage of this news then consider buying calls on a breakout over $128.50 or the $130.00 level.
Picked on October 21 at $123.40
Google Inc. - GOOG - cls: 675.82 chg: + 0.05 stop: n/a
We are throwing in the towel with GOOG. Traders had a chance to take it down today with the market down sharply this morning. The worst the sellers could do was the $660 region. Buyers stepped in twice to buy the dip in GOOG near $660. We didn't hear anything earth-shattering come out of the GOOG analyst day. It seems the big headline was MSFT winning a stake in Facebook over rival GOOG but shares of GOOG are not reacting to the news. Our failed, high-risk put strategies involved the November $550 put and a put spread with the November $580 put and $530 put. Normally we play a regular strangle on GOOG's earnings report with both an out of the money call and an out of the money put. This time we tried to play our bias, which was bearish, and it failed.
*This wasn't a strangle play but given the spread in strategy number two we decided to stick it in the strangles section of the newsletter.
Picked on October 16 at $616.00