EOT Position Update – May 5, 2010
May 5, 2010
Market Snapshot
It’s been a wild week on Wall Street. And for that matter… just about every other market around the world.
There are undercurrents of good and bad news stirring things up quite a bit.
First, the bad…
Oh Europe, you’re really making a mess of things. The sovereign debt problems in Greece, Portugal, and Spain are a grim reminder of the ’08 credit crisis. And the market collapse that followed.
Fear of a collapse in the sovereign debt markets has sent investors to the sidelines. But the lower than average volume of shares trading hands tells me one thing… Investors aren’t bailing out of the market.
Sure there’s some profit taking, but it’s been far from a full-fledged market collapse. I wouldn’t be surprised to see the markets take off again as investors’ fears fade.
And it may happen sooner rather than later… because investors have a bunch of good economic data showing the recovery is starting to kick into high gear.
Not the least of which is the ADP employment report. It shows private companies added 32,000 jobs last month. And to sweeten the deal, they also revised the February and March data higher.
Private companies actually began adding to their payrolls in February!
I’m sticking by my prediction… We’ll start to see big job gains by June.
The good economic news and strong earnings should get the market back to its winning ways quickly…. as long as the European debt markets don’t implode and bring everything down with it.
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.
UTX August 2010 $80 CALLS
UTX has held up remarkably well as the markets tumbled the last few days. Right now UTX is holding above support of the 50-day moving average. The pullback should allow everyone to buy this option at a great price. Hold tight for now. Resistance is at $80 and $85. Support is at $72 and $70.
WYN November 2010 $30 CALLS
WYN has pulled back to support of the 50-day moving average. It’s actually pulled back to the 50-day moving average five times in the last year. Each time it reached the 50-day moving average, it shot to new highs within a few weeks. I’m expecting a similar reaction here. Hold tight for now. Resistance is at $30 and $35. Support is at $24 and $21.
CTSH October 2010 $60 CALLS
CTSH reported Q1 earnings this week. The results were nothing short of spectacular. They handily beat analyst estimates. And management also raised their outlook for Q2 earnings. But their timing couldn’t have been worse. The markets posted one of their worst days so far this year at the same time. So any reaction to the positive earnings was muted by the markets bad performance.
CTSH also saw a big price swing in the first five minutes of trading today. It looks like someone unloaded a big position that quickly pushed the stock below our first support. But it was back trading above $50 within a few minutes. This looks like a one off event to me. Hold tight for now. Resistance is at $55 and $60. Support is at $49 and $47.50.
ASEI July 2010 $85 CALLS
ASEI continues landing more orders for its cutting edge x-ray technology called Z Backscatter. Their mobile units called ZBVs are the number one selling mobile inspection unit on the market. They should continue to see strong sales growth as police and military use their products to combat terrorists. This technology is used to identify car bombs like we saw in New York’s Times Square this week. Aggressive traders should hold tight for the quarterly earnings next week. Resistance is at $82.25 and $87. The next support is at $70.
SWKS May 2010 $15 CALLS
SWKS shot past our second resistance level after they reported earnings. Our option hit a peak gain of 200%! Congratulations to everyone on a successful trade. If you racked up some impressive gains on this trade, I’d love to hear about it. Send me an email at customerservice@hyperionfinancial.com.
Category: EOT Update
