EOT Position Update – September 15, 2010

| September 15, 2010

September 15, 2010

Market Snapshot

Here we go again…

The markets have had a nice rally so far this month.  But they’re now approaching resistance from the upper end of their trading range.

Take a look at this chart of the S&P 500.


The red line is resistance from the upper end of the S&P 500’s trading range.  You can see the two previous times the S&P 500 reached this level the markets promptly sold off.

At this point, the mildly positive economic data doesn’t give me reason to believe anything is going to change this time around.

The odds are we’re going to see the S&P 500 head back down toward support around 1040.

The good news is we’re starting to see some of the leading indicators turn more bullish.  If this trend continues, we’ll see stocks breakout of the trading range to the upside.

Let’s move onto 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.

  CBU February 2011 $22.50 Calls
CBU continues to hug the 200-day moving average support line.  But it should get a bounce soon along with the entire financial industry.  Hold tight for now.  Resistance is at $25.25 and $27.  Support is at $21 and $20.

  PEGA March 2011 $25 Calls
PEGA’s products continue to get rave reviews from customers and industry experts alike.  The stock and our options continue to rally.  We’re up 84% so far.  And every indication is PEGA will keep on climbing higher from here.  Continue holding for further gains.  Resistance is at $27.50 and $35.  Support is at $16 and $15.

  APOL November 2010 $37 Puts
APOL’s short rally came to an end this week.  But not before it broke through our $45 resistance.  Conservative traders should sell to conserve capital.  More aggressive traders should hold out for the release of new government regulations for the for-profit education industry.  The next resistance is at $50.  Support is at $35 and $30.

  SBUX October 2010 $25 Calls
SBUX has had a nice rally over the last few weeks.  Positive reports on consumer confidence and retail sales have stirred up interest in consumer stocks lately.  Our options are now in the money with a month to go before expiration.  Aggressive traders should hold out for another push higher.

Category: EOT Update

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