EOT Position Update – November 18, 2009

| November 18, 2009

November 18, 2009

Market Snapshot

It’s déjà vu all over again…

The major indices have rebounded at key levels of support.  And have set fresh YTD highs this week.

The markets got a boost on Monday from Fed chief Ben Bernanke’s comments to the Economic Club of New York.  What it at all boiled down to was – he doesn’t think asset prices are out of whack with reality.  In other words, we’re not sitting on another bubble that could explode at any time.

Investors took this as a sign now is still a good time to buy stocks.

But it’s still open for debate.  It all depends on how fast the economy grows.  I think the growth expectations are still on the conservative side.  That means there’s still plenty of upside potential in the markets.

On the flip side, the dollar continues to fall.  And as it does, commodity prices go higher.

Gold continues to be the biggest beneficiary.  It closed today at a record high of $1,141 per ounce.  I don’t see anything slowing gold’s rise, or the dollar’s fall, until the Fed starts raising interest rates.  And I don’t see that happening for another six months.

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.

  VIT Feb 2010 $17.50 CALLS (VITBW)
VIT posted better than expected quarterly revenue and EPS.  They also increased their full year earnings and revenue guidance.  It wasn’t the blow-out quarter some were expecting but it’s solid none the less.  I expect VIT to rally into the end of the year.  Resistance is at $21 and $22.50.  Support is at $14.50 and $12.65.

  MOT Apr 2010 $10 CALLS (MOTDB)
MOT is holding steady above support of the 20- and 50-day moving averages. Management’s looking for ways to break up the company.  They want to focus on the mobile communications business.  It looks like they may sell the set top box division for as much as $4.5 billion.  If this rumor ever becomes a reality, their shares should get a nice boost.  Resistance is at $10 and $12.  Support is at $7.75 and $7.

  MCRS Mar 2010 $30 CALLS (MFKCF)
MCRS is in a great position.  Their technology for hotel guests to completely bypass the front desk for check-in is the first of its kind.  As word spreads of the true potential of this technology, it should send shares higher.  We still have plenty of time, hold tight for now.  Resistance is at $30.50 and $33.  Support is at $25 and $22.50.

  MMM Jan 2010 $75 CALLS (MMMAO)
3M’s riding support of its uptrend higher.  It should continue to rally into the end of the year along with the rest of the market.  Aggressive traders should hold out for the next leg higher.  The next resistance is at $80.  Support is at $65 and $60.

Category: EOT Update

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