Weekly Update: April 2, 2015

| April 2, 2015

Weekly Update:  April 2, 2015


What To Watch

US equities continue to trade sideways, but the range is narrowing.  The S&P 500 is up about a half of percent this year and is still sitting right around its 50-day moving average.  NASDAQ stocks and small caps have fared better this year, with the Nasdaq 100 up about 2% on the year and the Russell 2000 up over 4%.

The narrowing of the S&P 500 trading range is significant to technical traders.  If you’re into that sort of thing, the consolidation in trading could mean a breakout is going to occur (one way or another) in stocks in the near future.

There are some potentially major catalysts coming up.  The March jobs number comes out tomorrow, for one.  Also, earnings season isn’t too far off with the first quarter recently coming to a close.

There’s always the potential of some major geopolitical event sparking a big directional move in stocks.  However, it’s most likely to come from domestic economic news, specifically anything which could give us a clue as to when interest rates are going to change.

Let’s take a look at our current positions.


Portfolio Recap

Position #1: Take Two Interactive Software (TTWO) April 25 Calls

Price Paid: $1.15

Current Price: $0.65

Time Until Expiration: 15 days

TTWO looks to be consolidating around the 200-day moving average.  That suggests we could see a breakout move in the very near future.  The most likely direction is towards the 50-day moving average at the $27 level.  As long as it happens in the next two weeks, we should be in decent shape.


Position #2: Prudential Financial (PRU) April 82.50 Calls

Price Paid: $1.77

Current Price: $0.76

Time Until Expiration: 15 days

PRU finally settled down this week and traded in a narrow range around $80.  With time value starting to take a toll on our calls, we need to see a move higher soon.  We’re looking for a run at the 200-day moving average right around $85 per share.


Position #3: Blackberry (BBRY) May 10 Calls

Price Paid: $0.70

Current Price: $0.26

Time Until Expiration: 43 days

BBRY took a hit on a negative analyst note.  That’s unfortunate timing for us, considering we recently bought calls.  I also think most analysts are being overly negative on the company, which just posted better than expected earnings.  While conservative traders should’ve exited this position on the dip, aggressive traders are still in.


Position #4: Cree (CREE) May 37.50 Calls

Price Paid: $1.47

Current Price: $1.11

Time Until Expiration: 43 days

We just got into CREE this week, so not much to report.  The stock’s down a bit today for no specific reason, but no reason to worry about short-term moves as we own May options.  Stay tuned.


Category: OTW Weekly Updates