EOT Position Update – September 30, 2009

September 30, 2009

Market Snapshot

Right now the bulls remain in control.

How can I be so sure?

Take a look at the economic data from the last week.  It’s a mixed bag at best.  There have been more than a few reports missing economists’ expectations.

For example, new and existing home sales fell shy of expectations this month.  Durable goods orders were expected to rise, but actually fell 2.4%.  And, the news didn’t get any better for the manufacturing sector where two more reports fell short as well.

What’s important is investors’ reaction to the reports.  They didn’t take the news as a cue to sell everything.  In fact, any selling was met by investors hungry to buy on a pullback.

Remember, the road to recovery isn’t going to be a direct route.  There’s going to be detours and pit stops along the way.  But overall conditions are improving.

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.

  TQNT Feb 2010 $7.50 CALLS (TQNBU)
TQNT is holding above support at the 20-day moving average.  Hold tight for the quarterly earnings report in a few weeks.  I’m expecting smart phone growth to give their numbers a nice bump.  Resistance is at $9 and $11.  Support is at $6.75 and $6.

  ININ Dec 2009 $20 CALLS (NQXLD)
ININ is holding up better than it has in previous pullbacks.  That’s a very bullish sign. You see, ININ has pulled back to the 50-day moving average twice in the past two months.  Right now it’s finding strong support at the 20-day moving average.  The milder pullback is a sign there’s still a lot buyers at current prices.  Hold tight for the next move higher.  Resistance is at $22.25 and $25.  Support is at $16.50 and $14.

  MMM Jan 2010 $75 CALLS (MMMAO)
3M’s trading flat since breaking through our first resistance level.  The good news is the stock’s holding above support of the 20-day moving average.  And it’s still well above the lower trend line… That means it may continue stair-stepping its way higher. Hold tight for the earnings announcement in a few weeks.  The next resistance is at $80.  Support is at $65 and $60.

  UEPS Oct 2009 $17.50 CALLS (QBSJW) 
Net1 continues to set new highs.  This week our call option hit $5.10.  We’re sitting on an impressive 325% gain!  It’s beyond both resistance levels.  Only the most aggressive traders should still be holding this option.

  GT Jan 2010 $20 CALLS (GTAD)
Goodyear is consolidating around $17.  We need some positive news to spark a new rally.  The next earnings report could be the catalyst to get the stock moving higher again.  GT reports Q3 earnings in about a month.  Hold tight for now.  Resistance is at $22 and $25.  Support is at $14 and $12.

  PEGA Dec 2009 $25 CALLS (PQMLE)
PEGA is climbing higher and higher.  The stock’s trading at another new 52-week high. Our options are up a whopping 356%!  Only the most aggressive traders should still be holding these options.

Category: EOT Update