EOT Position Update – February 18, 2015
Market Snapshot
The S&P 500 made its first new high of the year on Friday.
Stocks have moved higher in part due to oil prices stabilizing a bit last week. And concerns about Ukraine and Greece seemed to wane.
That was enough to spark an improvement in investor sentiment.
Then two tech giants –Apple (AAPL) and Cisco (CSCO)- sparked a rally in tech stocks.
CSCO benefited from a great earnings report. And Apple took off on upgraded earnings forecast due to Apple Pay and iWatch.
As a result, many traders moved into ‘risk on’ mode. They dumped safe haven assets and bought cyclical and other risk assets.
However, the rally in large cap US stocks appears to be running out of steam after a string of weaker than expected economic reports over the last week.
Just today, we found out that the producer price index fell more than expected because of falling oil prices. There’s clearly a disinflationary aspect to the massive drop in oil prices.
We also saw that housing starts slowed and industrial production was weaker than expected in January. Needless to say, the latest data shows that the US economy might not be immune to the slowdown that’s sweeping much of the globe.
In other words, I think we’ll see more volatility and range bound trading before the market breaks one way or another.
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.
DOW March 20th 2015 $48 Puts
Dow is our latest trade. Neither the stock nor the option has much price movement since we sent out the trade alert. The stock remains in a downtrend and stuck below resistance of the 200-day moving average. This bearish setup typically leads to a drop in the stock price. Resistance is at $51.00 and $52.00. Support is at $46.00 and $43.00.
STI April 17th 2015 $41 Calls
STI shot up to $42.00 last week. And our option soared 215% from where we recommended buying it to $1.81. The bullish uptrend is driving the stock steadily higher. Aggressive traders can continue holding for more upside. The next resistance is at $42.50. Support is at $37.50 and $35.00.
GLOG February 20th 2015 $20 Calls
GLOG hasn’t been able to break out of the consolidation pattern it has been forming over the last few months. This option is set to expire on Friday. Aggressive traders that were hanging onto this option should consider selling this in-the-money option to recoup some of your capital.
Category: EOT Update
