EOT Position Update – December 22, 2010
December 22, 2010
Market Snapshot
Happy Holidays!
Volume on the major stock exchanges is light this week. Many traders and other big money players are away from their posts this holiday shortened week.
The good news is stocks continue to rally. In fact, five of our call options hit new highs this week!
Commodities continue to rip higher this week as well. Oil is above $90 per barrel. And copper, corn, soybeans, and cattle are all at or near 52-week highs.
If the Fed’s goal was to jump-start asset price inflation with their quantitative easing… I think we can say “mission accomplished”.
So the question is… Where do we go from here?
According to the leading economic indicators, the economy should be stronger in six months than it is today. That bodes well for corporate earnings. I think we’ll see stocks and commodities continue their bull market run.
Let’s move onto the updates…
Position Updates
Just a quick note: Remember, we won’t update every open position every week. I try to focus on the positions that have some significant news or price movement.
BAC May 2011 $13 Calls
BAC’s stock is up more than 5% since the trade alert went out. Our option hit a peak gain of 36% today. WikiLeaks founder Julian Assange is dropping hints he has some “dirt” on B of A he’ll let fly after New Year’s. I don’t think there’s anything he can dig up that hasn’t already been explored. And based on the market’s reaction (the stock is up), neither do the majority of investors. Continue holding for bigger gains ahead. Resistance is at $14 and $17. Support is at $11 and $10.
CNH June 2011 $55 Calls
CNH hit another new 52-week high of $48.66 yesterday. The stock is up nearly 8% since our trade alert. In December, the farm equipment sales index expanded from November’s 68.7 to a record high 77.8 (readings over 50 signal growth). Sales of new farm equipment are hitting record highs. This trend should continue as long as commodity prices stay high. Hold tight for the next leg higher. Resistance is at $54 and $60. Support is at $35 and $31.50.
MCP March 2011 $45 Calls
MCP’s upward momentum carried it to our second resistance level yesterday. Congratulations to everyone locking in gains of 153%! There’s no telling how high the speculative momentum will carry MCP. Everyone but the most aggressive traders should have locked in their gains. Congratulations on a successful trade!
ADBE January 2011 $27 Calls
ADBE issued 1st quarter 2011 guidance above analysts’ expectations this week. The stock and our call option jumped on the announcement. Analysts are increasing their price targets for the stock across the board. Our option hit a peak gain of 161% so far! Aggressive traders should sit tight but keep an eye on ADBE as it approaches our next resistance at $33.50.
Category: EOT Update
