EOT Position Update – April 16, 2008

| April 16, 2008

April 16, 2008

Market Snapshot

The Dow Jones Industrial Average closed at 12619, but we took the long way getting here.  On Friday the markets gave up well over 200 points.  Then today we witnessed a 250+ point move up.  All of these gyrations are making my head spin.

Market talk this week has been on earnings.  Intel’s better than estimated guidance for Q2 gave life to the market.  Also of note was J.P. Morgan’s drop in first quarter profit.  It was less-worse than expected and the market seemed to like that.  CPI numbers were also released this week, arriving as estimated, up 0.3%.  Oil also traded above $113 per barrel . . . great news for our numerous oil company trades.

General consensus is that the Fed will cut rates at their next meeting on April 30.  The question is how much.  Some estimates are for as much as a 50 basis point cut.

Now for the trade updates.

Position Updates

  APA May 2008 $135 Calls (APAEX)
We caught a great run on Apache.  With oil pushing new highs, the industry is really climbing.  We crossed the first resistance level on Monday – with a huge five point move.  Today we crossed above 140 breaking the second level of resistance. Everyone should have nice gains at this point . . . take some profits if you haven’t already.  If you’re an aggressive investor you might hold a bit longer.

  CBI May 2008 $45 Calls (CBIEI)
CBI seems to have traded lower since the day we recommended it.  Monday we traded below the first support level.  Yesterday and today we had a slight rebound but nothing exciting.  Resistance is $50 and $52.50.  Support is $42.50 and $40.

   RRC May 2008 $65 Calls (RRCEM)
After trading lower Thursday and Friday, RRC spiked higher this week. We’re now past the second resistance level of $70. Everyone should have a profit on this trade.

   COP May 2008 $75 Calls (COPEO)
COP spiked higher this week, trading just shy of 83.  You’ve gotta love climbing oil prices.  The next resistance level is $85.  Support is $70 and $67.50.

   NSC June 2008 $55 Calls (NSCFK)
Great news, a NSC competitor announced great earnings propelling NSC to new highs. We crossed above 60 today in trading, breaking through both our resistance levels. Congratulations on a great trade.

Parting Shots…

This week I received several questions from new subscribers, including one who wanted to buy some old recommendations.

Honestly, I don’t think that’s a good idea.  Clearly it’s your money and you can do what you want.  But I would be patient.  There’s always another trade coming.

That same advice goes if you miss a trade or don’t get filled below the suggested price.  No sense in chasing a trade, there will be plenty more to come.

With that said, I’m watching the market closely and I see a few different trades starting to develop.  When I get a solid confirmation of an opportunity I’ll send everyone a trade alert.

Category: EOT Update

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