EOT Position Update – April 1, 2015

| April 1, 2015

Market Snapshot

There’s a lot going on in the markets as the 1st quarter of 2015 comes to an end.

Right now there are concerns about geopolitical issues, economic growth, and currency volatility around the globe.  These are being offset by easy monetary policy, low interest rates, cheap oil, and strong US economic growth.

Needless to say, this is a mixed bag for investors.  Some days it feels like the markets are ready to bolt higher and other days it feels like the multi-year bull market is running out of steam.

Just last week we had violent surges higher and dramatic selloffs in the biotech and semiconductor industries.  These are two of the top performing sectors that have been leading the markets.

The selloff last week in these industries certainly brought some of the bears out of the woodwork.  But these fears were soon put to rest as a few super-sized merger and acquisition deals reinvigorated investor optimism.

As we gear up for the beginning of the 1st quarter earnings season, I’m optimistic about the potential for stocks.  2015 earnings estimates are moving higher after dealing with widespread reductions over the past few months.

This is to be expected… analysts quickly cut earnings estimates in the energy sector as oil prices plummeted.  But they weren’t as quick to reflect the lower cost of energy in sectors that consume energy.

Now we’re starting to see these lower energy costs reflected in other sectors.  Obviously, upward revisions to earnings estimates should help propel stocks higher.

One thing that hasn’t changed is investor sentiment.  There are plenty of investors with capital ready to deploy on any small pull back.  Until that changes, I’ll continue to view pullbacks as a good buying opportunity.

Let’s move onto the updates…


Position Updates

Just a quick note:  Remember, we won’t update every open position every week.  We try to focus on the positions that have some significant news or price movement.

 CDW June 19th 2015 $40 Calls

CDW is moving higher in the upward trending price channel.  It’s currently testing support of the 50-day moving average.  Continue holding for the next leg higher.   Resistance is at $40.00 and $42.50.  Support is at $36.00 and $34.00.

 WEN May 15th 2015 $11 Calls

WEN has been in a consolidation phase the last few months after a big run up in the stock price to start the year.  There’s no doubt the stock gains have been dealing with headwinds from some profit taking among investors.  Most likely we’ve seen some the hedge funds cashing in so they can make their quarterly statements to investors look good.  I expect to see renewed buying in WEN now that the 2nd quarter has arrived.  Resistance is at $12.00 and $13.00.  Support is at $10.20 and $9.50.

Category: EOT Update

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