EOT Position Update – July 8, 2009

July 8, 2009

Market Snapshot

The key word this week for the market is volatility.

The head and shoulders pattern on the Dow is casting dark shadows over investor moods.  Whether you believe in technical analysis or not, this is a situation where a technical pattern could be a self fulfilling prophecy.  Especially given all the news coverage it’s received.

Today, all eyes are on Alcoa (AA).

After the close today, they announce earnings.  Long seen as the bell-weather of earnings season, investors all around the world are biting their nails and praying for positive news.

It’s a long held belief that if Alcoa’s numbers look good, the rest of earnings season will be positive.  And if Alcoa’s numbers are bad… well, the market could fall faster than a skydiver without a parachute.

It could get ugly really quickly.

Now for 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.

  RGR August 2009 12.50 PUTS (RGRTV)
RGR almost touched $13 this week before falling back to earth.  I’m still expecting earnings later this month to be bad for the company.  Hold tight for the earnings announcement.  Resistance is at $13 and again at $14.  Support is at $10 and $8.

  BRLI August 2009 $35 CALLS (BJQHG)
BRLI flirted with the $32 level before getting kicked in the teeth.  As the Dow fell late last week, it pulled BRLI with it.  We’re now trading just over $30.  We still have a good deal of time with this trade so hold tight.  Resistance is at $36.80 and $40. Support is at $27 and $25.

  MRO October 2009 $35 CALLS (MROJG)
Oil prices have been collapsing for the last few days, and it hasn’t helped MRO.  All of the government handwringing over speculation in the energy markets hasn’t helped either.  We’re below $28 on the stock right now.  I’m watching closely but think this is a short term pullback.  Stand pat for now.  Resistance is at $35 and $40.  Support is at $26 and $25.25.

  INTC October 2009 $16 CALLS (NQJQ)
INTC peaked at over $17.30 last week, giving us a solid gain.  Congratulations to everyone who locked in a win!  Aggressive traders still holding have plenty of time for a recovery… I still think this option has plenty of upside.  Resistance is at $16.80 and $19.  Support is at $14 and $12.75.

Category: EOT Update