EOT position update March 19, 2014
March 19, 2014
Market Snapshot
The S&P 500 is caught in a tug-of-war between good and bad news…
On one side, there’s US economic data. Better than expected readings on the US labor market, retail sales, and industrial production are pulling the market higher.
On the other side, the Russian invasion of Ukraine’s Crimea region and slowing of economic data in China are pulling the market lower.
As the bulls and bears battle it out, the S&P 500 has been stuck between 1,840 and 1,875 for nearly a month.
I have to admit, the situation is a bit frustrating… Headline driven markets are always difficult to trade because the situation can turn on a dime.
One thing’s for sure, the latest US economic data has put to rest any concerns about the winter economic weakness spilling over into the spring.
If (and it’s a big if right now) the situation in Crimea can be resolved peacefully and without sanctions being levied against Russia, US stocks should be off to the races.
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.
GILD April 2014 $82.50 Calls
GILD fell through the dual layer of support at the 50-day moving average and the long-term uptrend. Previous pullbacks to this dual layer of support had resulted in strong moves to the upside on five previous occasions over the last six months. After this support level was broken, traders quickly abandoned the trade. Conservative traders should have sold this option to conserve capital as it fell below $76. GILD did find support at $75 and it’s staging a bit of rebound over the last few days. Aggressive traders should hold onto this option to see if it can regain its bullish momentum. Support is at $75. Resistance is at $85 and $90.
AMZN April 2014 $365 Mini Calls
AMZN shot up above our $380 resistance level last Thursday. And our option jumped to a high of $22.10. That’s the cue for conservative traders to capture a solid profit of 87% on this option. Aggressive traders should continue holding for a bigger move. Support is at $340 and again at $320. The next resistance is at $400.
EIGI May 2014 $15 Calls
EIGI has been volatile lately. The good news is the fundamentals are there for the stock to make another push higher. Aggressive traders should continue holding for the next leg higher. Resistance is at $20.
Category: EOT Update
