EOT Position Update – March 24, 2010
March 24, 2010
Market Snapshot
The market continued “climbing a wall of worry” this week.
The three major large cap indices have basically moved straight up along with the small and mid-caps for the last seven weeks.
The rally has sent all of them to new 52-week highs during the last week.
Despite the impressive run, investors are questioning the rally every step of the way. I think the pessimistic feelings are a good sign. It’s when everyone’s sure the market’s going up that I get worried.
Sure, the economic recovery’s still fragile. But the positive economic data, low inflation, and government support point toward a continued run in the markets.
I’m looking for the current rally to carry the S&P 500 up to around 1190 or 1200 before it runs into resistance.
Right now the only serious threat to the market’s advance is EuroZone sovereign debt fears.
And we got another dose of those fears today when Fitch cut their rating on Portugal’s debt. (Come on Europe, get your act together.)
I’ve got to admit, I’m a little surprised by consumer discretionary stocks, especially retailers, ability to keep running. On the flip side, I think tech stocks can run a lot higher from here.
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.
ASEI July 2010 $85 CALLS
We just rolled out a new trade on ASEI this morning. Take a look at the email or the website for more details. Resistance is at $82.25 and $87. Support is at $72.75 and $70.
WFR July 2010 $13 CALLS
WFR’s made a good run over the last two weeks. Our option is up 67% since we recommended it! Over the last two days, WFR is bumping up against our first resistance at $15. Conservative traders may want to go ahead and lock in profits now. More aggressive traders should hold tight. Semiconductor business is booming and the solar industry is finally starting to gain some traction. Both of these factors give WFR the potential to make a big run to our second resistance level at $17. Support is at $11.50 and $11.
VZ July 2010 $30 CALLS
VZ continues to climb higher. That’s great news for our option. It hit a peak gain of 140% yesterday! Over the last few days, VZ broke through the 200-day moving average. Today, VZ pulled back right to the 200-day moving average. This is normal price action. VZ should continue powering its way toward our resistance at $31.25 and $33. Hold tight for bigger gains ahead. Support is at $28 and $27.
INTC July 2010 $20 CALLS
INTC continues its bullish run and set another new 52-week high this week. Our option also hit a new peak gain of 122%! The best part is, I still think INTC is undervalued. Aggressive traders should hold tight for bigger gains ahead. The next resistance is at $25. Support is at $18.50 and $18.
SWKS May 2010 $15 CALLS
SWKS business keeps getting stronger. Their semiconductors allow mobile operators to meet the exploding demand for mobile data from smartphones. SWKS set a new all-time high at $16.55 this week. Good enough to reach our first resistance levels at $16.50. Conservative traders should have cashed in a 90% gain yesterday!Aggressive traders should hold tight for the next leg higher. The next resistance is at $18. Support is at $12.25 and $11.50.
CSCO April 2010 $24 CALLS
CSCO is another one of our recommendations setting new 52-week highs this week. Our option hit a new peak gain of 116%! CSCO should continue to climb higher from here. The main catalyst for future gains is increased business IT spending. Companies are embracing the idea of increasing employee collaboration. Think of it as social networking, like Facebook, but for the business world. And new CSCO technology is on the cutting edge of making easier collaboration a reality. Aggressive traders should hold tight. The next resistance is at $29. Support is at $22.50 and $20.
SBUX April 2010 $22 CALLS
SBUX popped up again today on news they declared their first ever cash dividend. The dividend could draw the attention of a whole new group of investors. Aggressive traders should hold tight. The next resistance is at $26. Support is at $18.50 and $17.
Category: EOT Update
