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Analyst Articles
Stocks remain under pressure today. After a couple of encouraging economic reports early last week, Friday’s disappointing employment situation report extended the trend of weaker-than-forecast economic data. Adding to the gray pall that has descended on investor sentiment were the election results in Greece over the weekend. Read More
We made several changes to our holdings earlier. We walked away from our long position in SunPower (SPWR) as the stock doesn’t not appear ready to take off. Roughly offsetting our loss in the SunPower trade was the gain we earned on our Chesapeake Energy (CHK) October 16 put. Here our sale was prompted by the risk that CEO Aubrey McClendon might step down, which could trigger a rally in the stock. We replaced Chesapeake with the Coach (COH) August 67.50 put option. It’s a buy up to $5.10. We also closed out two trades on Friday. We pocketed a 25 percent profit on our short sale of BeBe Stores (BEBE) in 23 days after the company offered reduced guidance for the year ahead. We also closed out our Starbucks (SBUX) July 55 put option for an 11 percent gain in 17 days. The timing on our Nabors Industries (NBR) September 18 call option could have been better, having traded lower with the overall market. But since the stock is so volatile we’re willing to give the trade some more time to work out. Hold. Read More
Sell your long position in SunPower (SPWR) at the market. Sell to close the Chesapeake Energy (CHK) October 16 put option at the market. Buy to open the Coach (COH) August 67.50 put option, using a limit order to pay no more than $5.10 per option. Read More
Sell to close the Starbucks (SBUX) July 55 put option at the market. Read More
Buy to cover your short sale of Bebe Stores (BEBE) at the market. Read More
Stocks are once again trading at the upper end of their range, aided by good, though not great, earnings reports. While the previous high (at 1419 for the S&P 500 on a closing basis) may prove to be a difficult hurdle to surmount, the market’s internal action – with the notable exception of trading volume – has been fairly good. Read More
This morning we added the Nabors Industries (NBR) September 18 call option. Nabors is an important player in the contract drilling space where expectations are quite low right now. Use a limit order to pay no more than $1.62 per contract if you don’t own it already. In the only other change to our holdings since our last update, we closed out the SPDR Select Sector Technology ETF (XLK) June 30 call option trade at a loss last Wednesday after the index bounced on the release of Apple’s quarterly results. There has been more bad press regarding Chesapeake Energy’s (CHK) CEO Aubrey McClendon, with the Internal Revenue Service now examining the company’s Founders Well Participation Program, which granted McClendon the right to take a 2.5 percent interest in every well the company drills. That program, along with his sweetheart loans have forced the board of directors to strip McClendon of the title of Chairman. He does however, remain CEO. The bad press hasn’t hurt the stock though, which has also gotten a lift from a bounce in natural gas prices. Nevertheless, those gas prices remain far below the level the company needs to operate at a profit, which should lead to a weaker stock price in the next few months. We’re holding a long-dated option with our Chesapeake October 16 put, so we have plenty of time for this trade to work out. The option is a buy for new clients at its current price. Investors didn’t like what they heard with Starbucks’ (SBUX) recent results last week. The stock fell sharply on the news and we expect it will work its way lower still – at least to its 50-day moving average, now at $54.41. The Starbucks (SBUX) July 55 put option is a buy for new clients at its current price. Read More
Buy to open the Nabors Industries (NBR) September 18 call option. Use a limit order to pay no more than $1.62 per contract. Read More
Sell to close the SPDR Select Sector Technology ETF (XLK) June 30 call option at the market. Read More