Good evening traders. The day ended up with a fierce rally into the close in anticipation of Goldman Sachs earnings tomorrow morning. The earnings report will give GS the chance to publicly speak and defend itself against the SEC allegations. Most analysts expect a very strong earnings report which may spark a rally, but one that I think will be sold into. It feels like the market is going to consolidate here as traders digest earnings. And the longer it sits here without making new highs the chances increase for a sell-off. We got defensive on our positions over the weekend and we our well positioned for a sell-off should it occur. I suggest being nimble with position management as the market is being driven by news which can create whipsaws in both directions.
CALL Play Updates
Coca-Cola - KO - close: 55.32 change: +0.35 stop: $53.95 *NEW*
KO followed through today and is starting to chip away at the congestion/resistance area I have been mentioning in the $55 to $56 area. I am still suggesting readers consider selling positions on any continued strength in KO. For now our target remains at $57.00 but I our stop was moved up to $53.95 on Saturday, which is just below Thursday's low.
Current Position: CALL May $55.00 (KO 10E55.00) at $1.62
Entry on March 24th at $ 55.22
Earnings Date 04/21/10
Average Daily Volume = 14.6 million
Listed on March 23rd, 2010
Occidental Petrol. - OXY - close: $84.69 change: -0.37 stop: 83.45
OXY broke below our key support/resistance level at $84.50 today and is now below its 20-day SMA. The stock has not followed through and is also breaking its uptrend line support. All of this is telling me that the chart is broken and it is time to exit the position. I am suggesting traders exit the position at the open tomorrow and we will be flat OXY for a loss.
Current Position: CALL MAY $85.00 (OXY 10E85.00) at $3.25
Entry on April 7th at $85.50
Earnings Date 04/29/10 (unconfirmed)
Average Daily Volume = 5.5 million
Listed on April 6th, 2010
PUT Play Updates
Simon Property Group â€“ SPG â€“ close: 82.90 change: +0.63 stop: 86.35
Why We Like It:
SPG rallied right up to our trigger price at $83.75 this morning and then sold off hard, however, SPG rebounded to close +0.63% on the day. The stock is -$0.85 lower than our entry. I expect the $84.00 resistance to hold and I see limited support until our target at $79.50. The stock will have to contend with its 50-day SMA which is currently $80.87 but I suspect it will break though this level. Our 2nd target is $77.10. We'll place a stop at $86.35 which is above its 20-day SMA and at the top of a congestion area. Our time frame is about two weeks as SPG reports earnings on April 30.
Current Position: BUY MAY PUT $80.00, entry at $2.20.
Entry on April 19th at $ 83.75
Earnings Date 4/30/2010
Average Daily Volume = 2.6 million
Listed on April 17th, 2010
SPDR S&P 500 Index - SPY - close: 119.81 change: +0.45 stop: 123.05
SPY was very weak this morning but rallied back in the afternoon with the broad market to close just about flat. This created a bottom tail candlestick on its daily chart and SPY also bounced off of its 20-day SMA. But it also made new intraday lows so I still like the potential of the trade. Earnings could keep the markets buoyant this week but I feel at some point traders will be looking to take profits. Our target remains $115.50 and our stop is 123.05. I am looking for a better inflection point to move the stop down in the coming days.
Current Position: SPY PUT MAY $119.00, entry at $2.05
Entry on April 13th at $ 2.05
Earnings Date Not Applicable
Average Daily Volume = 164 million
Listed on April 12th, 2010
CLOSED BULLISH PLAYS
PartnerRe Ltd. - PRE - close: 79.65 change: +.06 stop: $79.10
PRE traded down to just below our stop today before rallying close about break-even on the day. We are flat on the position. PRE has broken its trend line support and did not follow through as we anticipated. The chart looks like it is failing so we stepping aside. If readers still have positions I suggest exiting them soon, or you could place a stop below the 50-day SMA if you want to give PRE more time.
Closed Position: CALL MAY $80.00 (PRE 10E80.00) @ $1.50, entry was at $2.40
Entry on April 6th at $ 80.55
Earnings Date 04/27/10
Average Daily Volume = 989 thousand
Listed on March 20th, 2010