EOT Position Update – January 7, 2015
Market Snapshot
It’s time to get another exciting year of options trading started.
After a few weeks off over the holidays to spend time with friends and family, I’m fired up and ready to go! So, I hope you’re ready to do this.
Over the past few weeks, the S&P 500 surged to a new high of 2,093… then dropped like a rock back to around 2,000 in a matter days.
Well, it looks like the pullback is over after a strong day today. As we’ve seen time and time again over the last few years- these are typically great opportunities to buy call options… keep an eye out for a new trade later this week.
My outlook for 2015 is bullish. So, we’ll continue to focus on call options and use put options when the opportunities present themselves.
The way I see it, US stocks are still the strongest area of the market. But we could see leadership shift toward consumer and industrial stocks and away from healthcare and utilities.
The wildcard is energy stocks… there’s a lot of uncertainty around oil prices. But US production is already declining in the face of lower prices. I wouldn’t be surprised to see oil prices rebound and the oil and gas companies that survive will offer tremendous upside.
All in all, I’m expecting another fantastic year full of opportunities to double, triple, or better our money with our call option strategy.
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.
WBA January 16th 2015 $32 Calls
Walgreens beat earnings and announced they would be completing the acquisition of Alliance Boots. The announcement sent the stock soaring above our $77 resistance level. The option soared 123% to a high of $3.56. Congratulations to everyone who cashed in on this Christmas present! The combined company is now trading under the ticker symbol WBA. Aggressive traders that are still holding this option should look to exit around $78.00.
WWWW January 16th 2015 $17.50 Puts
WWWW defied expectations and pushed up near our $20 resistance level. Now the stock is rolling over and moving lower in a hurry. I wouldn’t be surprised to see it test support around $15 before this option expires in a few weeks. Aggressive trader should continue holding. Support is at $15.00 and $14.00.
KATE January 16th 2015 $32 Calls
KATE has been range bound over the last few months. The initial rebound off the October lows was a nice setup heading into the holiday shopping season. But high end retail stocks haven’t been able to gain any traction with widespread concerns about growth and discounting. At this point, all but the most aggressive trader should close this trade to conserve capital.
GLOG February 20th 2015 $20 Calls
GLOG hasn’t been able to shake off the stench of the energy industry. This is a great company that’s in a very enviable financial position. But the overall sentiment toward energy stocks continues to weigh it down. If it can breakout above $22 in the next few weeks, it should make a run back toward $26.00 in short order. Continue holding. Resistance is at $24.00 and $26.00. Support is at $14.00 and $13.00.
Category: EOT Update
