EOT Position Update – May 7, 2008

| May 7, 2008

May 7, 2008

Market Snapshot

Today the Dow Jones Industrial Average closed at 12,814.  This week we reached for the 200 day moving average, but it only served as a brick wall to any rally.  It seemed like as soon as we crossed into the 13,000 territory we quickly got pushed back down. I’m still amazed at the number of 200 point or near 200 point moves we’ve seen in the market over the last few months.  I feel like a yo-yo.

It seems like the only thing on the news is climbing oil – now over $122 a barrel.

Other noteworthy news – Yahoo’s rejection of Microsoft.

On the economic front jobless claims were also positive.  Analysts estimated job losses at 80K but apparently we only lost 20K.  Not good that people are losing their jobs, but good news from an overall economic point of view.

Remember, next week is options expiration so if you haven’t done so you might look to exit any May options you have.

Now for the trade updates.

Position Updates

  DSX June 2008 $35 Calls (DSXFG)
This is a new trade for the week.  Resistance is 34.50 and 42.  If the stock breaks to the upside beyond 42, it’ll be trading at all time highs.  Support is 27.50 and 24. 

  EXM June 2008 $50 Calls (EXMFJ)
This is a new trade for the week.  I see resistance levels at 50 and 54.50, the peak of trading last December.  Support levels are 39 and 30.  Everyone should have had time to get into this trade at a decent price.

Bearish Put  UAUA June 2008 $15 Puts (UALRC)
UAUA pushed higher last Thursday, but has been falling ever since.  Today we broke the first support level of 14.  Remember we own puts and want the stock to go down. This happened very quickly.  I’m expecting more bad news.  Resistance is 17.50 and 20. Support is at 13.  

  VNO June 2008 $95 Calls (VNOFS)
VNO traded as high as 97 earlier this week, then gave up some of those gains.  One important point, the company moved above their 200 day moving average for the first time since October 2007.  Resistance is 100 and 105.  Support is 85 and 80.

   RRC May 2008 $65 Calls (RRCEM)
RRC broke our original resistance levels moving to new highs a few weeks ago.

   COP May 2008 $75 Calls (COPEO)
The stock broke our original resistance levels last week.  The stock keeps trading higher . . . today it traded over 88.

Parting Shots…

When $11 billion isn’t enough.

I always find earnings season interesting, and sometimes quite perplexing.  Like when stocks post huge losses, but rally because the losses weren’t bigger.  Or stocks that fall because earnings estimates missed by a penny or less!

It’s always amazing.

This week we had a perfect example.  Exxon Mobil recorded $11 billion in profit.  And that’s in just the first quarter!  The company is the world’s biggest oil company, and they clearly benefit from record oil prices.

Earnings were 17% higher than a year ago.  Yet they missed analyst expectations . . . and the stock dropped like a lead balloon.

It just doesn’t make sense sometimes.  If you ask me, it’s a perfect buying opportunity.

Category: EOT Update

About the Author ()

Comments are closed.