EOT Position Update – April 15, 2015
Market Snapshot
It’s tax time… as people across the country get their taxes in order, they tend to do some other types of financial planning as well.
As a result, there’s typically a strong inflow of money into the market in April. So, it’s no surprise to see the S&P 500 up 2.4% during the first few weeks of the month.
What’s more, investors’ appetite for stocks with more upside potential is growing.
So far this year, small-cap stocks are leading the market higher. In fact, the Russell 2000 small-cap index is at a new all-time high.
And earnings season is helping ignite bullish momentum… So far 37 companies in the S&P 500 have reported earnings and 35 of them have beaten expectations!
That’s the good news…
There are some storm clouds on the horizon that could rock the bulls.
Recently, economic data has been missing expectations by a wide margin. Just this week retail sales and industrial production have come in well below expectations.
If this trend continues, it will certainly lead to a slowdown in economic growth. Earnings growth and estimates will follow and that could send stocks lower in a hurry.
Much of this is due to the uncertainty from the rapid drop in oil prices. There’s clearly more pain to come for industrial players as well as other cyclical businesses.
And don’t forget, the sell in May crowd will be out in full force over the next few weeks.
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.
BSX May 15th 2015 $18 Calls
BSX is up 3% since we recommended buying call options on it. The option has a peak gain of 77% so far. The stock has been glued to $18.00 over the last few weeks. But the upward slopping 20-day moving average has risen up to just below the current price. This should set the stage for the next leg higher. Continue holding… Resistance is at $18.50 and $19.00. Support is at $17.00 and $16.00.
CDW June 19th 2015 $40 Calls
The bullish uptrend for CDW is alive and well. It continues to set higher highs and higher lows. So far the stock has had trouble holding above $38.00. But today’s price action is looking very promising and should continue leading up to their May 7th earnings report. Continue holding. 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 a huge disappointment. The stock has clearly lost the bullish momentum that sent the stock soaring higher to start the year. It looks like some investors were content to take their profits before WEN reports earnings on May 6th. I think there earnings and forecast will be hotter than their new ghost pepper fries… continue holding. Resistance is at $12.00 and $13.00. Support is at $10.20 and $9.50.
Category: EOT Update
