EOT Position Update January 8, 2014
January 8, 2014
Market Snapshot
Happy New Year!
After an exciting 2013, I’m fired up to make 2014 our best year yet. So, let’s get started!
The Santa Claus rally delivered the S&P 500 to a new all-time high. The large cap index finished the year at 1,849.
As we start the year, investor optimism is running at extremely bullish levels. Sentiment at these levels typically triggers a pullback. But with the way things have been going, any pullback will likely be short lived.
Another thing that’s helping stocks is rising interest rates. A tidal wave of money is flowing out of bonds as interest rates rise. And that money is finding a home in stocks.
It’s important to note the recent run in stock prices hasn’t been accompanied by a similar rise in earnings estimates. The P/E expansion puts stocks at greater risk of a correction.
That puts a big emphasis on 4th quarter earnings and next year’s forecasts as we head into earnings season. We’ll see the normal volatility pick up as some stocks beat estimates and others fall short. But it’s important for the overall trend of the percentage of companies beating estimates to keep pace with previous quarters.
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.
CMLS March 2014 $7.50 Calls
CMLS is our latest trade. This momentum stock has been on fire. And it should continue to roll through their earnings announcement in March. You can buy these options up to $1.30. Resistance is at $9.00 and $10.00. Support is at $7.00 and $6.87.
SPR April 2014 $35 Calls
SPR is up about 1% from when we recommended buying options on it. The advance has slowed down a bit lately. It’s holding above support of the upward trending 20-day moving average. And it should make another run to the upside in short order. Continue holding… Resistance is at $38.00 and $40.00. Support is at $31.00 and $30.00.
CRM February 2014 $52.50 Calls
CRM exploded to the upside today after they announced that companies are quickly adopting their new Salesforce1 platform. The stock is now up nearly 11% from where we recommended buying these options. Our option hit a new high of $5.35 today. That’s a gain of 117%! All but the most aggressive traders should look to lock in these impressive gains. And don’t forget to drop me an email at customerservice@hyperionfinancial.com to let me know how this trade worked for you.
C March 2014 $57.50 Calls
C broke out above the key $53.50 level this week. Now it’s time for C to make the run up to our resistance levels at $60.00 and $65.00. Continue holding. Support is at $49.00 and $48.50.
January Options Expiration
RAD January 2014 $4.50 Calls, YGE January 2014 $8.00 Calls, and DTV January 2014 $65.00 Call options will be expiring next week. The last day to trade these options is Friday January 17th. All of these positions have hit support or resistance levels so the majority of you have closed out these positions already. All of these positions still have value (DTV just hit a new peak gain of 195% yesterday). If you’re still holding onto these positions, now’s the time to sell.
Category: EOT Update
