EOT Position Update – April 28, 2010

| April 28, 2010

April 28, 2010

Market Snapshot

Earnings season is rolling along.

We’re seeing companies big and small alike beat analyst estimates.  That’s a great sign the economic recovery’s ahead of schedule.

However, any good vibes being generated by strong earnings are being offset by a series of downgrades on the sovereign debt of Greece, Portugal, and now Spain.

The fear is the problems will spread throughout Europe and eventually the world.  And they could derail an economic recovery all together.

Clearly this story isn’t going away anytime soon.  The way I see it, sovereign debt problems are the single biggest threat to stocks right now.  I’ll be watching this story closely…

The combination of bad news with an overbought stock market and technical resistance sent a shockwave of selling through the markets yesterday.

Despite a few down days, the markets uptrend remains intact.

If the same trading and technical patterns play out as they have in previous pullbacks, we should see bulls quickly stepping into buy.  And that should create a good entry point for another call option…

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.

  WYN November 2010 $30 CALLS 
WYN delivered better than expected earnings.  But investors didn’t immediately jump on this as a buying opportunity.  In fact, we saw some profit taking send the stock down early today.  But it’s already recovered the majority of those losses.  There’s still a good chance the strong earnings and upbeat outlook sparks another rally over the next few weeks.  Hold tight for now.  Resistance is at $30 and $35.  Support is at $24 and $21.

  CTSH October 2010 $60 CALLS
CTSH fell back to support of the 50-day moving average today.  There really isn’t any new developments.  That means the price movements are being driven by technicals.  We’re still waiting on the quarterly earnings next week.  Keep an eye on this one when they report earnings.  Resistance is at $55 and $60.  Support is at $49 and $47.50.

  ASEI July 2010 $85 CALLS
ASEI came charging back after bouncing off of our first support area.  Aggressive traders should hold tight for the results of quarterly earnings in May.  Resistance is at $82.25 and $87.  The next support is at $70.

  SWKS May 2010 $15 CALLS
SWKS continues to trade in a range between $15.50 and $16.50.  There really hasn’t been any significant news for awhile.  But that will change when they report quarterly earnings in a few weeks.  The next resistance is at $18.  Support is at $12.25 and $11.50.

Category: EOT Update

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