EOT Position Update – July 29, 2009
July 29, 2009
Market Snapshot
The S&P 500 is up an impressive 13% in the past few weeks. But the rally is taking a breather so far this week.
Not surprisingly, the semiconductors are leading the markets higher. Intel (INTC) kicked things off with better than expected earnings and revenue. We’ve been saying the first signs of recovery would come from this industry and they didn’t disappoint. (And, we managed to rack up a 190% gain in the process.)
The improvement in semiconductors is the most important indicator of economic recovery so far.
It’s important to remember there’s going to be a lot of noise in the economic data. The economy is just beginning to turn positive. We’re going to see monthly readings for economic data behave erratically.
The data that misses expectations will undoubtedly lead to short term pauses and pullbacks. But the overall trend of improvement will keep the markets moving higher.
The best advice is to take advantage of the pullbacks and pauses to establish new positions.
On that note, keep an eye out for a new trade later this week.
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.
SYNA August 2009 $37.50 CALLS (QYGHR)
Our call options in SYNA have jumped quickly on big demand from other investors playing the earnings release. Our options are up 129% in less than a week.Conservative investors may want lock in profits now. There have been whispers SYNA isn’t going to beat estimates. However, I think there’s a good chance their numbers come in better than expected. Aggressive traders should hold out for the earnings release. Resistance is at $40 and $41.50. Support is at $31 and $27.50.
INTC October 2009 $16 CALLS (NQJQ)
Intel’s advance has slowed over the last week. But not before crossing both of our resistance levels and setting a new high. We’re showing a 191% gain so far. We still have a few months until expiration. Aggressive traders may want to hold out for bigger gains.
PEGA December 2009 $25 CALLS (PQMLE)
PEGA has been moving higher this week, which is great news for our call options. We crossed over our first resistance level today. Our call options are now up 119%.I’ve noticed the spread is quite large on these options so make sure to use a limit order to close out any open positions. Aggressive traders should hold out for the earnings announcement next week. Resistance is at $27.50 and $30. Support is at $20 and $17.50.
EXP October 2009 22.50 PUTS (EXPVX)
EXP was able to meet earnings estimates by continuing to cut costs. I’ve got to hand it to their management team for maintaining profitability in a horrible business environment. In light of the recent report on new home sales and the overall bullishness in the markets, I think it’s time to cut our losses and conserve capital. Exit this trade. Resistance is at $27 and again at $30. Support is at $20 and $18.
BRLI August 2009 $35 CALLS (BJQHG)
BRLI was able to set a fresh year-to-date high this week. There’s a good chance we could see these options move into the money prior to expiration. Hold tight for another move higher. Resistance is at $36.80 and $40. Support is at $27 and $25.
RGR August 2009 $12.50 PUTS (EXPVX)
RGR is set to announce earnings tonight after close. It’s crossed both of our resistance levels. Only the most aggressive traders should still be holding this position.
Category: EOT Update
