| December 3, 2014

December 3, 2014

Market Snapshot

The holiday shortened week was shaping up to be a quiet week… then the OPEC decision to keep oil production unchanged rocked the market.

The decision clearly caught the market by surprise.  And WTIC oil prices plummeted more than $10 per barrel in the days that followed.

As a result, stocks in the energy sector fell while consumer and other sector that benefit from lower oil prices raced higher.

The strong performance from consumer stocks has more than offset the weakness from energy stocks and lifted the S&P 500 to a new all-time high today.

It’s clear that the bulls are in charge of the market.  But there are opportunities to profit from strength or weakness in individual stocks.

Let’s move onto 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.

WWWW January 16th 2015 $17.50 Puts
WWWW is a new trade.  We’re looking to profit from the bearish momentum in this underperforming tech stock.  Resistance is at $19.00 and $20.00.  Support is at $15.00 and $14.00.

KATE January 16th 2015 $32 Calls
KATE has clearly had a bearish to bullish reversal.  That’s good news for our call options.  It has pulled back within the uptrend over the last week.  Look for KATE to make the next leg higher in short order.  Resistance is at $33.00 and $36.00.  Support is at $27.50 and $25.00.

GLOG February 20th 2015 $20 Calls
GLOG has been extremely volatile as investor sentiment has turned bearish on any stock tied to energy.  The recent weakness in GLOG is misplaced… the company is tied into long term contracts that are not affected by the drop in oil prices.  Aggressive traders that haven’t already locked in profit still have tremendous upside potential with more than two months until these options expire.  Continue holding.  Resistance is at $24.00 and $28.00.  Support is at $14.00 and $13.00.

CVX December 19th 2014 $120 Calls
CVX stock price took a hit last week after OPEC chose to keep oil production unchanged and oil prices dropped like a rock.  I’m surprised by the cartels decision. Since then, oil prices and oil stocks have started to rebound.  The problem for this trade is time… these options expire in two weeks.  I believe we will see the CVX bounce back from these oversold conditions.  Look to exit this trade around $119.00.

Category: EOT Update

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