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Posts Tagged ‘JTX’

Bulls Scoop Up Sprint Nextel Corp. Calls

www.interactivebrokers.com

 Today’s tickers: S, FTR, JTX & SBUX

S - Sprint Nextel Corp. – Medium-term bullish positioning is building up in Sprint Nextel Corp. options today with shares in the name trading 3.00% higher on the session at $4.84 as of 12:20pm in New York. Investors expecting shares in the provider of various communications products and services to extend gains through May expiration engaged in plain-vanilla call buying, purchasing the options out-right to position for shares to potentially reach a new 52-week high in the next couple of months. Volume is heaviest at the May $6.0 strike where 20,750 calls have changed hands versus previously existing open interest of 7,482 contracts. It looks like roughly 18,000 of the calls were picked up at a premium of $0.08 each. Call buyers make money if Sprint’s shares jump 25.6% over the current price of $4.84 to surpass the effective breakeven price of $6.08 by expiration day in May. Sprint Nextel Corp. is scheduled to report first-quarter earnings before the market opens for trading on April 28, 2011.

FTR - Frontier Communications Corp. – Put volume on the communications company jumped today after sizable trades were initiated in the May contract. It looks like investors responsible for the put activity may be purchasing the contracts to brace for bearish movement in the price of the underlying stock. Shares in Frontier Communications Corp. are currently down 0.90% to stand at $8.00 as of 12:30pm. The selection of the May contract put options could be coincident with the firm’s first-quarter earnings report, which is scheduled for release before the opening bell on May 5, 2011. One trader appears to have purchased some 3,000 puts at the May $8.0 strike for a premium of $0.40 each. The investor starts to make money on the put-acquisition if shares in FTR decline 5.0% from the current price of $8.00 to breach the effective breakeven point at $7.60 by May expiration day. Volume is greatest, however, at the lower May $7.0 strike where 15,000 put options…
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Testy Tuesday – Already?

Wheeeee, this is fun!

It’s only been a week since I called for "Turnaround Tuesday" and asked the question "Will CNBC Apologize to America" for their ridiculous, sickening parade of negativity that chased their poor viewers out of the market (now 600 points ago) by completely misrepresenting the economic outlook in order to protect the TERRIBLE advice given by Jim Cramer, the Fast Money Crew, their sponsors etc. etc. – it was all one national frenzy of media negativity designed to shove retail investors entirely out of the market while the cognoscenti went shopping.

It’s not just CNBC, of course, it’s a problem with the whole MSM but I ranted about corporate (top 0.01%) control of the media last week so let’s move on as we wave bye-bye to all the beautiful sheeple who were kind enough to sell us their stocks at the bottom, despite my warnings.  Our 500% upside plays are now well on their way to making 500% for us and our "9 Fabulous Dow Plays Plus a Chip Shot" are also looking good already.  Even the trade ideas I mentioned right in last Tuesday’s post are well on track as I said last week:

On Friday, I had said to Members right at 9:38, in the Morning Alert: "If we run up, then it will be prudent to get more neutral into the weekend but if we stay down and hold our levels, then saying a little bullish will be fine. Out of short-term short trades if you haven’t already.  Keep in mind we have some great 500% upside plays you can still grab here if you think you are too short." 

The latter was a reference to our 500% upside plays.  We also went with EEM July $38 calls at .99, and a QLD $50/53 bull call spread for $1.30 (selling puts as well for more profits) as well as long plays on RIMM, AA, HOV, VLO and TASR.  My optimism was based on the considered TA analysis I shared with Members at 2:39:

After completing last month’s "Omega III" market pattern on the Trade Bots, it’s now time to spring the bear trap and run the "Apha II" into options expiration on July 16th.  Maybe there will be as little logic to the rise as there was to the fall – who really cares – it’s just our jobs to try to


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Looming Lululemon Earnings Lifts Implied Volatility – Puts in Demand

www.interactivebrokers.com

Today’s tickers: LULU, XLE, OIH, JPM, IOC, CYB, AMSC, MW, SVU & JTX

LULU – Lululemon Athletica, Inc. – Investors are hoarding put options on athletic apparel maker, Lululemon Athletica, ahead of the firm’s third-quarter earnings report scheduled for release after market close. LULU’s shares rallied as much as 3.8% to an intraday high of $27.84. The stock is currently up 2.75% to $27.56 with 45 minutes remaining in the trading session. Some analysts expect the Canada-based company will record earnings of 19 cents per share on revenue of $111 million. Option traders hedged against an earnings disappointment by purchasing puts. Approximately 6,800 put options were coveted by investors at the January 25 strike for an average premium of 1.23 apiece. Put-buyers are positioned to profit if shares fall through the breakeven price of $23.77 by January’s expiration day. Mounting investor anticipation for third-quarter earnings and the increase in demand for option contracts on the stock boosted option implied volatility throughout the session. Volatility rose 10.85% from an opening reading of 59.93% to an intraday high of 67.52%.

XLE – Energy Select Sector SPDR ETF – Shares of the exchange-traded fund comprised of companies in the oil, gas, and energy equipment industries, fell 1% during the trading day to $54.30. A massive put spread by one investor indicates shares of the XLE may decline further by the time the quarterly December contract options expire on December 31st, 2009. It appears the bearish trader purchased 74,800 puts at the December 53 strike for 95 cents apiece, spread against the sale of 74,800 puts at the lower December 48 strike for 13 pennies each. The net cost of the pessimistic play amounts to 82 cents per contract. The investor likely holds a long position in the underlying stock. The puts serve to protect the value of the stock position in case shares continue to decline. Downside protection kicks in if shares of the XLE decline beneath the breakeven point at $52.18 by expiration on the final day of 2009.

OIH – Oil Service HOLDRs Trust – Shares of the OIH exchange-traded fund rallied 1.25% to $112.69 today. We observed bearish options activity on the fund despite the bullish movement in the price of the underlying. A put spread enacted in the January 2010 contract suggests some investors feel the need for downside protection through expiration next year. It looks like 1,500 puts…
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ACE Call Options in Demand – Option Implied Volatility Explodes

www.interactivebrokers.com

Today’s tickers: ACE, EFA, HAL, AMAT, WHR, DE, JTX & WCG

ACE – ACE Limited – The surge in demand for call options on the insurance company today drove option implied volatility up 19.75% to 28.67%, while shares gained more than 2% to $49.78 during the trading day. Investors populating the December contract exhibited bullish sentiment on ACE by selling puts and buying calls. Approximately 3,000 puts were shed at the December 50 strike for an average premium of 1.51 apiece, while some 2,100 calls were purchased at the same strike for roughly 89 cents each. Call volume at the January 50 strike sky-rocketed to 21,666 contracts – on previous existing open interest of just 1,402 calls – as traders scooped up about 20,000 lots for a premium of 1.42 per contract. Investors long the January contract call options are positioned to accrue profits if ACE’s shares trade above the breakeven price of $51.42 by expiration.

EFA – iShares MSCI EAFE Index ETF – The exchange-traded fund, which includes stocks from Europe, Australasia and the Far East, attracted bearish option players despite the 2.5% rise in shares today to $56.88. One investor, who may hold a long position in the underlying stock, unfurled a ratio put spread in the January 2010 contract. The trader purchased 10,000 puts at the January 55 strike for an average premium of 1.39 each, and sold 20,000 puts at the lower January 52 strike for about 70 cents apiece. The investor pockets a net credit of 1 penny per contract on the trade and establishes downside protection in case shares of the EFA decline ahead of expiration. The 1 cent credit is ‘free money’ for the trader as long as the shares remain above $55.00 through expiration in January.

HAL – Halliburton Co. – Options activity on the oil and gas company today suggests at least one investor is bracing for potential share price erosion through expiration in January. Halliburton’s shares rose 1% during the session to $29.57. The trader responsible for the bearish ratio put spread is likely holding a long position in the underlying stock. If this is the case, today’s transaction provides downside protection for the investor. It appears 5,000 puts were purchased at the January 29 strike for an average premium of 1.24 apiece, spread against the sale of 10,000 puts at the lower January 24 strike for 18 pennies each.…
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Buy Pick: Jackson Hewitt (JTX)

Buy Pick: Jackson Hewitt (JTX)

jtx chartCourtesy of David at The Oxen Group

On Tuesday, The Oxen Group likes the prospects for Jackson Hewitt Tax Service Inc. (JTX). The company will benefit from the extremely bullish news that came from H&R Block in after hours as they beat earnings estimates with a positive earnings report. H&R Block reported better than expected profits, earnings over $700 million while last year the company only reported earnings of $543 million. The company beat Wall St.’s estimates, as well, earnings an EPS of 2.09, with The Oxen Group estimating an EPS of 2.06. The company saw better earnings with higher prices and more online processings. They did see less overall reports, but it appears that the tax services companies may fair better than expected. The company was not as optimistic as investors were as they sent the company up over 5% in after hours. The earnings rising 20% and Wall St. expectations will help JTX, tomorrow, as the company has a very similar business to H&R Block.

The market may make a move again, tomorrow. The futures are bullish currently, reflecting bullish news from Ford in after hours, as well as, expectations that consumer spending may reveal more positive results about the economy. If the market is bullish along with the HRB news, JTX will have a great day. The technicals, further, help the case for this stock. It is currently in an uptrend on stochastics, meaning more buyers are entering the stock than sellers. Further, the stock has lots of upper room on bollinger bands.

Watch for a pop and buy in on a pullback.

Entry: Recommend buying with first 10-25 minutes.
Exit: Exit on 2-4% increase
Resistance: Upper 7.00

 

 



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Phil's Favorites

Jobless Claims Improve, Leading Indicators Decline: Economic Report Card

Courtesy of John Nyaradi.

Jobless claims improve while leading indicators decline in today’s economic report card

by Wall Street Sector Selector Staff

Weekly jobless claims declined to 424,000 from last week’s 432, 000 but stubbornly stayed above the all important 400,000 level for another week.

August Leading Indicators came in at +0.3% compared to 0.5% for July, as the economy continues registering weakness.

Good news came from July Home Prices which rose to +0.8% from the previously reported +0.7%.

But the biggest economic news of the week came yesterday when the Federal Reserve said it saw  “significant downside risks to the economic outlook, including strains in global financial markets.”

Global stock markets responded negatively yesterday an...



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Insider Scoop

Priceline.com Trades Higher on Q1 Earnings Results (PCLN)

Courtesy of Benzinga

Shares of Priceline.com Incorporated (NASDAQ: PCLN) are trading higher in the after-hours following the release of its Q1 earnings results. Currently, shares are up 2.74%, trading at $548.60; they closed the regular session down 0.67 %, at $533.97.

The company said that its Q1 EPS came in at $2.66 on revenues of $809.3 million; this compares to the Street's estimate of $2.46 per share on revenues of $779.5 million. Revenues rose 38.6% year over year.

"In the 1st quarter, the Group benefited from strong growth in our global hotel business, particularly at Booking.com and Agoda," said Jeffery H. Boyd, Priceline President and Chief Executive Officer.

He added, "Room nights booked grew by 55.8% and our international gross bookings grew by 79% compared to prior year...



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Zero Hedge

Fukushima Explosion Update: Core Presumed Intact As Sea Water Used To Bring Temperature Down, Radiation Level At 1015 Microsieverts/Hour

Courtesy of Tyler Durden

The damage control to the Fukushima explosion reported earlier is coming fast and furious. According to CNN, "the explosion at an earthquake-damaged nuclear plant was not caused by damage to the nuclear reactor but by a pumping system that failed as crews tried to bring the reactor's temperature down, Chief Cabinet Secretary Yukio Edano said Saturday. The next step for workers at the Fukushima Daiichi plant will be to flood the reactor containment structure with sea water to bring the reactor's temperature down to safe levels, he said. The effort is expected to take two days." While the government is trying to play down the threat from the explosion, it has nonetheless double the evacuation zone radius from 10 to 20 kilometers: "Radiation levels have fallen since the explosion and there is no immediate danger, Edano said. But authorities were nevertheless expanding the evacuation ...



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Chart School

The Mega-Bear Quartet and L-Shaped "Recoveries"

Courtesy of Doug Short

Note from dshort: I retired this chart series last summer in deference to my prefered inflation-adjusted series that aligns the S&P 500 2000 high with the Nikkei peak in 1989. However, I continue to receive requests for this version, despite the "V" shape of the the recovery since the March 2009 low. This chart series overlays the current S&P 500 with the L-shaped "recoveries" after the Dow Crash of 1929, the Nikkei 225 after Japan's 1989 bubble, and the post Tech Bubble NASDAQ. Click the chart below for a larger version and use the links to see various comparisons.


Click for a larger image

I've ...



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Sabrient

Sabrient Risers - 3/12/2011

Top 5 RisersStockRatingAnalysisVLOSTRONGBUYAn increasingly positive growth rate of past earnings, along with improving expectations for long term growth, make Valero a good prospect for high returns.KROSTRONGBUYKronos Worldwide has been gaining recognition from analysts as a good canditate for achieving higher than expected earnings along with higher overall projected valuation.SFIBUYiStar is one of the top candidates projected to achieve both higher than previously projected earnings in the short run and a higher earnings growth rate in the long run.AMATSTRONGBUYApplied Materials has been...

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Option Review

Bulls Scoop Up Sprint Nextel Corp. Calls

 Today’s tickers: S, FTR, JTX & SBUX

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OpTrader

Swing trading portfolio - week of March 7th, 2011

This post is for live trades and daily comments. Please click on "comments" below to follow our live discussion. All of our current virtual trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading portfolio (strategy, performance, FAQ, etc.), please click here

Optrader 

Swing trading portfolio

 

One trade portfolio

...

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Stock World Weekly

Stock World Weekly

Here's the newest Stock World Weekly:  Illusion Based on a Fantasy 

Comments welcome... share your thoughts. 

Download Newsletter 3/6/11


Stock World Weekly archives here >

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Pharmboy

Biotech Junkies Update and Momenta Pharma Moving Forward

February is now past, and the Biotech Porfolio is loaded with winners and a miss (PLX).  MRK is down a bit, but I expect that trade to recover, and one could be more agressive and double down on it, or play another round at the Jan13 $30 options for roughly the same price.  Below is the summary, and note the grey boxes are ones that did not fill.  I am still a fan of BMRN, and like DEPO as well.  Now let's look at a few others.

Table 1.  PSW Biotech Plays Since January 2011

 

Our newest play is Momenta Pharmaceuticals (MNTA), who is pursuing a three-part business model which includes complex generic equivalents in partnership with the Sandoz division of Novartis, proprietary compounds, and follow-on- biologics (FOB).  It seems that this company is tied up in competition/litigation wit...



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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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