EOT Position Update – July 15, 2009

| July 15, 2009

July 15, 2009

Market Snapshot

The S&P 500 is showing signs of life after four consecutive down weeks.

The reversal is being spurred by the financial and technology sectors.  Thanks to better than expected quarters from two bellwethers, Goldman Sachs (GS) and Intel (INTC).

Goldman’s earnings soared 65% to $4.93 per share.  And Intel posted a better than expected $8 billion in revenue, profit margins of 50.8%, and EPS of $0.18.

This is great news for investors who have been mired in economic data showing recovery was stalling.

One thing to keep an eye on over the next week is the earnings of the big banks.

The financials were the driving force behind the March rally.  Good news from them could ignite another market rally.

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.

  INTC October 2009 $16 CALLS (NQJQ)
INTC blew away expectations for their second quarter earnings and increased their guidance going forward.  Their business is improving and their share price is heading higher.  This is great news for our deep in the money calls.  They reached a new high of $2.50 today, good for a 97% gain!  Aggressive traders may want to hold for another move higher.  We still have plenty of time.  Resistance is at $16.80 and $19. Support is at $14 and $12.75.

  PEGA December 2009 $25 CALLS (PQMLE)
PEGA is a fast growing tech company that can grow in just about any economic environment.  The next big boost should come from their second quarter earnings which are due out in a few weeks.  Resistance is at $27.50 and $30.  Support is at $20 and $17.50.

  EXP October 2009 22.50 PUTS (EXPVX)
The home building business isn’t likely to recover for at least another 18 months.  And it could be longer in markets that were overbuilt during the housing boom.  EXP depends on two of the most overbuilt areas, California and Nevada, for much of their revenue.  They have salvaged the past few quarters by cutting costs.  But I think there is a strong possibility their next earnings come up short.  Hold tight for the earnings next week.  Resistance is at $27 and again at $30.  Support is at $20 and $18.

  BRLI August 2009 $35 CALLS (BJQHG)
BRLI has been flat since it was turned back short of a new 52 week high.  It’s now consolidating around $30.  We could see another move higher once the 50-day moving average catches up to the current price.  We still have another month so hold tight. Resistance is at $36.80 and $40.  Support is at $27 and $25.

  MRO October 2009 $35 CALLS (MROJG)
MRO provided upbeat guidance on production levels this week.  The news has shares trending higher again.  But to get their share price really moving, they need oil prices to rise as well.  The good news is oil prices seem to have put in a bottom over the last week.  They should move higher from here on renewed hopes of economic recovery. Resistance is at $35 and $40.  Support is at $26 and $25.25.

  RGR August 2009 12.50 PUTS (RGRTV)
RGR closed above our first resistance level today.  Aggressive traders should hold out for the earnings announcement.  Resistance is at $13 and again at $14.  Support is at $10 and $8.

Category: EOT Update

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