Markets for the most part remained fairly choppy this week, which was options expiration for the month of February. I noted in a prior post that the massive OI in the 152 calls in SPY were more than likely going to keep this market range bound until next week. WMT emails stating lower than expected sales, and lowest in seven years spooked the markets on Friday and sent it for a test of the 10-day, and it was quickly boughten. This market remains strong and a buy on dips, while holding a large book of longs may not be the best of ideas, but at the same time the same guys calling for the pull back for the last 50 handles are still calling for it.
QQQ much like the SPY was just a low volume chop fest and continues to remain largely range bound, but individual names continue to move.
IWM had the strongest week, but was also choppy and low volume, but it is definitely a bullish sign in my opinion to see speculation money continue to roll into small caps and send them to new 52 week highs.
Financials were interesting this week and ended Friday with not the greratest of candles, and it really looked like the were poised for a big week, but the massive false break out in AIG on Tuesday may have been a signal, but GS continued to show a lot of strenght afterwards but on Thursday could not break out and same with Friday as it gave one last attempt and then trended lower throughout the day. Will definitely be a sector to keep an eye on early in the week.
XLE after breaking out on Thursday really put in an ugly day on Friday selling off on heavy volume, and underperforming the broader markets, but was able to hold its 10 day.
XLB was just in an all out battle with its 10 & 20 days MA all week and will be one to watch for a larger move in the coming days week as it is coiled tightly sitting in this volume pocket so a break out above or below could lead to a large quick move.
XLI put in a strong week displaying strength and closed out right near the highs and breaking out through resistance, will definitely be a sector I look to for strength on Tuesday.
XLY attempted to break out on Friday but failed and is showing signs of uncertainty, but is a sector to look at for strength and through Fridays highs could put in a nice week.
XLV is set here to break out of this flag and many in this sector look bullish especially smaller cap names, and this is a sector I expect to out perform and break out this week on any market strength.
|19-Feb||10:00 AM||NAHB Housing Market Index||48||47|
|20-Feb||7:00 AM||MBA Mortgage Index||NA||-6.40%|
|20-Feb||8:30 AM||Housing Starts||910K||954K|
|20-Feb||8:30 AM||Building Permits||918K||903K|
|20-Feb||8:30 AM||Core PPI||0.10%||0.10%|
|20-Feb||2:00 PM||FOMC Minutes||-||-|
|21-Feb||8:30 AM||Initial Claims||358K||341K|
|21-Feb||8:30 AM||Continuing Claims||3150K||3114K|
|21-Feb||8:30 AM||Core CPI||0.20%||0.10%|
|21-Feb||10:00 AM||Existing Home Sales||4.94M||4.94M|
|21-Feb||10:00 AM||Philadelphia Fed||1.5||-5.8|
|21-Feb||10:00 AM||Leading Indicators||0.30%||0.50%|
|21-Feb||10:30 AM||Natural Gas Inventories||NA||-157 bcf|
|21-Feb||11:00 AM||Crude Inventories||NA||0.560M|
AGN has consolidated its early year break out well, and currently looks positioned to make new 52 week highs, shares have been riding the 10 day, while being under accumulation, and saw some volume come into the name on Friday, this is one to watch next week as the entire sector sets up well and a break of 108.73 should take this higher.
SHW has been riding the 10 day and on Friday exploded out of the volume pocket with RSI on the move and not yet overbought, MACD set for a bullish cross and shares under accumulation this is a name to watch opening the week for a volume surge to new 52 week highs.
APOL has been weak for a long time and shares continue to be sold on any spike, and certainly one to watch for a break of thursdays lows or as an aggressive short on any pop to the 10 day with a simple stop if it breaks the 20 or 50 day depending on how much room one wanted to give it.
APH building a nice flag here and could take some time, but looks nice on a break over 71 with volume.
BMY bouncing around the box after making a nice move and retraced back to the 20 day and bounced hard to reclaim the 10 day on friday, it looks good through fridays highs or the 37.08 area. Again, the entire sector looks good so definitely a name I am interested in next week.
CHRW weekly chart shows shares really rolling over and struggling to catch a bid after what looks like a prolonged dead cat bounce. Looks like a decent short candidate below 57ish.
FISV is interesting here after a orderly pull back, shares put in a solid day on friday getting up all moving averages and RSI ripped back through 50 and looks set to run higher, while shares have remained under accumulation throughout the entire pull back.Will be on watch to break out of that channel and through the volume pocket all converging around the 81 area, this one could have a good move in it.
Har after the massive gap down, which saw shares really fall, but then rebound now look set to retest the 200 day and possibly even the break down lows. One to keep an eye on for a short candidate.
JBL is really tight here in this ascending triangle and RSI is beginning to move upwards, and a gap fill ahead this is one that I will be watching for a trade as I think it could put in a large move with strong volume.
IRM shares have rebounded well and are consolidating their latest break out as they build up steam to take out those old 52 week highs it attempted to break out of this consolidation on friday and failed, but one that sets up fairly well here and one to keep an eye on.
HST shares dipped briefly but quickly came back to 52 week highs like a magnet, this one is interesting here and need to see volume come into this name to take out all of that resistance and fly higher.
MDCO is sitting in a large flag here and shares failed on friday after poking their head out and with that large volume pocket there it could be an explosive move. Shares are on the thinner side, but could have a measured move to the $35 area.
JCI pulled back tested near the 50 day and now look ready to make new 52 week highs RSI is roaring higher, with shares being accumulated sharply and MACD crossing bullishly and volume increasing last week, it looks like a very nice set-up to me.
MON sets up well here after a brief test of the 10 and 20 day moving averages to work off some extreme overbought conditions. RSI is now in the below 60′s and moving higher MACD looks ready to cross bullish and shares continue to be accumulated on any dips. This name could be positively or negatively affected by CF earnings this week so something to keep in mind if looking to swing this name.
NTAP pulled back to the 50 day for a test and then saw 3 high volume bull days to break out of the downward channel and now are running to test and potentially make new 52 week highs.
REXX a bit volatile here but after a test of the 50 day shares have rallied back on strong volume and RSI is moving north with a bullish MACD cross and share accumulation underway it looks good for a run to new 52 week highs.
MUR another name that pulled back a bit aggressively, but consolidated and began building a bear flag, but broke out of it with good volume on Friday and now looks set for a break through of Fridays highs to explode back to 52 week highs and beyond. RSI is moving higher, a bullish MACD cross is underway i like this set up here and it has room to run.
RRD shares continue to grind higher in the quest to test and potentially break out past the 200 day I like this one on a break of 9.80 for a run to the 200 day test and see how it handles it from there.
XEL has made a nice move here and last week had a few attempts at breaking out of this resistance, and as we know the more times it tries the more likely it is to break so one to watch here for sure.
Others Worth More Study-
Options: (other notable options positions have been highlighted in daily blogs)
ECA shares broke down hard last week, but may have seen a capitulation candle on friday and could be set to reverse course and move higher. Traders bought over 18,000 March $19 calls a significant position and one worth watching for the reversal here next week.
FRX attempting to put in a higher low here and break above its 20 & 50 day moving average, but came back in and was able to hold its 10 day. An odd position took place on Friday with over 6,000 May 41 calls being bought 14% out of the money. Certainly a very speculative play, and most likely someone looking for a takeover here and could be worth a shot here as a small speculation play.
FLO a name that had seen an orderly pull back, but on Friday saw volume kick in and the pull back begin to look like a break down, although it held its 20 day there is cause for concern here, and to amplify matters further over 11,000 March 25 puts traded on Friday against an open interest of just around 100. A notable position and a name to look at for a break down below the 20 day for a short.
COF shares broke down hard this week, and are now looking to hold last summers lows as shares continue to remain bid-less after a weaker than expected earnings report. Traders were active in June 55 calls for 5000 on thursday and another 2000 on friday. Shares definitely seem like a value here, but I am not a knife catcher and I will wait for some form of reversal candle before getting interested in the name, but definitely worth keeping an eye on.
DISH will report earnings Q4 2/20/13 before the market opens and the street is expecting EPS of .51 compared to last year same quarter of .70. DISH has beat on 2 of the last 4 reports and missed two of the prior four reports. DISH has beaten the past three times it has reported Q4 results. Past 4 quarters average earnings move is 1.6%, with the highest single day move of 3.35%. March options chain shows about a 2 to 1 skew in calls bringing about a bullish case for shares into earnings and the month after. DTV beat earnings but guided a bit light with some currency issues and shares were off about 2%.
Long March 33-40 ratio 1 by 2 call spread at 3.20 debit & long 36-33 March ratio put spread at .30 or just 36-33 put spread at .80. Total trade cost 3.50-4.00.
MDT reports earnings 2/19/13 before the market opens and the street is looking for EPS of .91. MDT has met or beat streets estimates the past four quarters with an average move of 2.3% and max move of 4.45%. March options are pricing in a $3.20 move by expiration or a 6.8% move. Bulls have been aggressively positioning themselves in March calls and open interest is sitting about 5 to 1 in favor of calls with May & August also displaying a bullish case.
Long MDT shares at 47.12
Short March 50 calls for .52 credit
Long March 47 puts for 1.45 debit
Short April 47 puts for 2.00 credit.
Total trade cost is long shares of MDT at 46.05.
SINA will report earning 2/19/13 after the market closes and the street is expecting EPS of .05, SINA has meet or beat expectations in each of the past 6 quarters. SINA has a 4 quarter average earnings move of 12% with the largest move being 15%, and 3 of the 4 prior quarters seeing positive movements. Options are pricing in a $5.30 move roughly 10% slightly cheaper than historical movements. Weekly options chain is fairly mixed and March options chain does have a bullish bias. Shares broke out of a small downward channel last week and reclaimed all moving average.
Long Feb 60-62.50-65 call fly at .27 debit.
CF reports earnings 2/19/13 after the close and the street is looking for EPS of of $7.03. CF average 4 quarter move is 2.6% and its largest move of 6.8%. Options are pricing in roughly a $8 move about 4%, slightly more expensive then history has said in the past. Share have been trading weak into the report since reaching 230 area and are currently testing the 50 day. Options chain is slightly bullish, but nothing worthy of determine a side here.
Trade Idea: Long Feb 210-205 1 by 2 ratio put spread for a .10 credit
Long 220-225 1 by 2 ratio call spread for a .10 credit.
AIG reports earnings 2/21/13 after the close and the street is looking for a loss of .09, AIG has easily beat the streets estimates the prior 4 quarters. AIG has an average earnings move of 3.5% and the largest move of past 4 quarters is 7.15%. Options are pricing in roughly a $1.45 move or roughly 3.8% move largely in line with historic moves. February and march are both skewed bullishly when looking into the open interest. Shares have been rolling over since having a massive false break out early in the week.
Trade Idea: Short the 40/37 Feb strangle at .45 credit & Long the March 40/37 March strangle at 1.10… Total debit of .65.
ANF reports earnings 2/22/13 before the market opens and the street is looking for $1.95, ANF has met or beat expectations each of the prior 4 quarters. 4 quarter average earnings move is 16%, but largely skewed by last quarters 34% move, and taking that out the average move is roughly 10%. Options are pricing in a $5.70 move or 11.1% roughly in line with the past. ANF has held all of prior quarters move and has trended higher and is now in a long consolidation awaiting its next catalyst.
Trade Idea: Long the Feb/March 46 call calendar spread at .25 debit.
Long ANF Feb/March 44 put calendar spread at .50 debit.
INTU will report earnings 2/21/13 after the market close and the street is looking for .33 a share. INTU has beat the streets estimates 3 of the past 4 quarters with an average earnings move of 2.3% and largest move of 5.9%. INTU March options are pricing in roughly a $3 move or 5%, which seems a bit inexpensive with 3 weeks remaining before expiration after earnings.
Trade Idea: Long March 1 by 2 ratio 65-67.50 call spread for a .20 debit.
JWN will report earnings 2/21/13 after the close and the street is looking for $1.34 in earnings. JWN has a 4 quarter average earnings move of 2.45%, and a high move of 4.8% options are pricing in a $3.10 or 5.6% a bit expensive in comparison to prior quarters, but will also have 3 weeks remaining after earnings. Shares are bouncing around in anticipation of earnings.
Long March 57.50-60 call spread & short the March 52.50-50 put spread for free.
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