Weekly Update: April 23, 2015

| April 23, 2015

Weekly Update:  April 23, 2015


What To Watch

US equities are slightly positive from a week ago, but with today’s climb, they’ve set a new 52-week high.  Meanwhile, NASDAQ stocks just closed at a record high, finally making it all the way back from the dot.com crash around 15 years ago.  The NASDAQ 100 is up nearly 6% on the year, or twice as much as the S&P 500.

Crude oil is also surging, climbing from the mid to low $40 range per barrel all the way to $57.  That’s a robust 18% climb in the last month.  The ongoing military action in Yemen is at least part of the reason behind the increasing price of oil.

So far, earnings season has been kind of blah.  Companies, on average, are posting better than expected earnings but missing on revenues.  Earnings results aren’t doing a whole lot to move the market overall.  We’re in a period of relatively low correlation among stocks, although I don’t expect it to remain this way for long.

Economic data are showing a bit of a slowdown in US economic activity.  However, there’s nothing alarming going on at the moment.  The general slowdown is related to the strong dollar hurting international sales and harsh weather conditions.  The numbers should improve as the summer rolls in.

Let’s look at our positions.


Portfolio Recap

Position #1: Blackberry (BBRY) May 10 Calls

Price Paid: $0.70

Current Price: $0.52

Time Until Expiration: 22 days

We got an excellent jump in BBRY, with the stock price closing above the key 200-day moving average.  With three weeks to go, there’s still plenty of time to hit our upside targets.  We’re closing in on the conservative profit-taking point.


Position #2: Cree (CREE) May 37.50 Calls

Price Paid: $1.47

Current Price: $0.03

Time Until Expiration: 22 days

CREE missed earnings and the stock got crushed.   The shares can be volatile enough to bounce back, but after the bad news, it’s going to be highly unlikely.  Conservative traders should have exited the position already.


Position #3: GoPro (GPRO) May 48 Calls

Price Paid: $1.55

Current Price: $2.10

Time Until Expiration: 22 days

GPRO is slowly but surely moving higher.  Our position continues to be a decent winner, and there’s plenty more upside.  We’re one good day from our fist profit-taking exit point.


Position #4: Splunk (SPLK) May 60 Puts

Price Paid: $1.48

Current Price: $0.40

Time Until Expiration: 22 days

Well, I said SPLK would be volatile, and it hasn’t disappointed.  The stock dropped fairly sharply right after we purchased the puts, but it’s exploded higher since.  You can expect this stock to continue to be a rollercoaster, but conservative traders should’ve already exited.


Position #5: Bank of America (BAC) June 16 Calls

Price Paid: $0.36

Current Price: $0.32

Time Until Expiration: 57 days

We just purchased BAC calls yesterday, so nothing to report yet.  Unlike some of our other positions, I would expect BAC to be far less volatile.


Category: OTW Weekly Updates