EOT Position Update – March 31, 2010
March 31, 2010
Market Snapshot
The impressive advance over the last seven weeks has sent the major averages to new 52-week highs. But this holiday shortened week has seen the markets drifting sideways. And it’s doing it on below average volume.
The bottom line is, I wouldn’t read too much into the market movements this week.
Overall, the economic data continues to point toward steady improvement. But the unemployment and housing data continues to be lackluster at best.
Until these two all important economic indicators begin to improve, we’ll see low interest rates and easy money from the Fed. And low interest rates and easy money usually means stock prices will continue to climb higher.
By and large, stocks are looking overbought after seven weeks of gains.
But we know stocks can stay overbought for long periods of time when there’s a strong trend. So it’s hard to try and pick a top. For now, “the trend is our (call options) friend.”
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
ASEI continues its eight week long consolidation between $73 and $77. Everyone had an opportunity to buy this option below our buy up to price. Right now, ASEI is trading just above support of the uptrend. This technical setup points to a breakout sometime in the near future. Hold tight for now. Resistance is at $82.25 and $87. Support is at $72.75 and $70.
WFR July 2010 $13 CALLS
WFR broke through the 200-day moving average on high volume yesterday. That’s a great sign WFR’s bullish momentum will continue. But don’t be surprised to see it tick back down to the 200-day moving average before continuing higher. Our option has almost doubled since we recommended it on March 10th! Aggressive traders should continue to hold for bigger gains ahead. The next resistance level is $17. Support is at $11.50 and $11.
VZ July 2010 $30 CALLS
VZ got a boost from a Wall Street Journal article claiming Apple’s (AAPL) next iPhone will be compatible with the VZ wireless network. The news sent VZ through our first resistance at $31.25. Our option has tripled in value… with a peak gain of 209! Aggressive traders should hold out for bigger gains ahead. The next resistance is at $33. Support is at $28 and $27.
INTC July 2010 $20 CALLS
INTC has entered into a consolidation after an explosive eight week run-up. I still think INTC is undervalued at its current price. Aggressive traders should hold out for bigger gains ahead. The next resistance is at $25. Support is at $18.50 and $18.
SWKS May 2010 $15 CALLS
SWKS’ uptrend continues. And for good reason too. Earnings estimates are on the rise. In the last 30 days, four of the nine analysts covering the stock have raised their 2010 earnings estimates. Good news like this should keep SWKS and our options moving up. Our option hit a new peak gain of 95% this week! 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 consolidating after hitting a new 52-week high this week. Our option hit a peak gain of 124% this week too! Our April options will expire in a few weeks. Aggressive traders should start looking for a good exit point. The next resistance is at $29. Support is at $22.50 and $20.
SBUX April 2010 $22 CALLS
SBUX has pulled back to support at around $24.50 after hitting a new 52-week high a week ago. Our options will expire in a few weeks. Aggressive traders should start looking to exit soon. The next resistance is at $26. Support is at $18.50 and $17.
Category: EOT Update
