Herbalife Trending Well

Herbalife has moved since our recommendation and since the close of December Options which is where the short trade happened in the Puts.  This could make for a textbook straddle at the 30 strike given the outcome of Herbalife's talks scheduled later next month.

Happy Trading...

Herbalife Ltd. (HLF)

Lots going on here after the short play all over the news.  Is this hype, to make a buck, in which case SEC needs to investigate or is there truth?

Herbalife is supposed to counter the pyramid-scheme accusations in January, at this level any good news should propel this forward.

Take a look and watch.

Happy trading...

Playing 2013 Volatility

Take the unknowns of the fiscal cliff off the table and 2013 is analysed to be a bull year.  If you believe this buy long into VXX puts as a calender spread as the news causes more fear and market drops.  Take the volatility that is sure to be around over the next month and buy the puts in the front months...

I am currently still holding Jan 13 28 PUTS starting on the day plan-B was taken off the table.  I am only playing with 10% of 2012s profits, so I absolutely view this as a speculative play but I still find it hard to believe that even this government would allow us to head full speed into another recession over entitlements and taxes.

Let's face it we have become an entitlement nation, time to cut the cord and fix the defense budget.  Especially since we now want to being "training" in Africa and focus more on a southeast Asia curtain.  Terrorists aren't going away anytime soon.

Happy Trading...

SODA Stream

Recently there has been much hype over Sodastream (SODA) in the news and on TV, to include an anticipated Super Bowl commercial.  Add to this my recent purchase of a Sodastream Genesis as a birthday gift and revelation that the profit margins on this product must be outrageous given what I paid for it and the discovery that it didn't even have to be plugged it.  Having followed SODA in the days when it was strongly correlated and following Green Mountain's (NASDAQ: GMCR) every move, riding high into the 70's before falling humbly to earth, I figured it was time to take a look, again.

The commercials and print products are revealing the companies push to show conservation as a key theme.  Don't contribute to the waste of resources to produce bottles and cans of soda when you can reuse the same container and make a steadily increasing choice of beverages when you desire.

I put Sodastream (NASDAQ: SODA) back on my radar screen a few weeks ago when it was in the mid-30's and began talking about it with fellow traders to see what they were thinking.  It recently rose above 40 and has made a mild pull-back even in an up market.  Investor's Business Daily has it highly ranked and the fundamentals are great except for the 49.5% short interest showing up last month, which was a slight increase over the previous month.

Pulling the data on the fundamentals reveals consistent quarterly earnings and even some positive surprises. Quarter's one and two were in-line while quarter three with raised expectations beat by $.07.  Fourth quarter results are due to be released on Feb. 27, 2013 before the bell.  Expectations are for $.37 per share.  It is possible the Christmas season, desire for conservation and re-use and the ever growing variety of available flavors and name-brands could push sales high enough to surprise again. 

More fundamental information shows a consistent growth in cash and short term investments strengthening the balance sheet by increasing revenues, low price-to-earnings and price/earnings-to-growth of 19.8 and .66 respectively, as well as two times the net profit margin (10.67%) of the industry average (closest related industry not necessarily the home made soda industry)  

Actual industry comparison is rather difficult for Sodastream as there are no publically traded direct competitors.  Most analyst reports utilize the household durables industry group for comparison.  This includes the home furnishing, household appliances, house-wares and specialties and consumer electronics. Major players include IRobot (NASDAQ: IRBT),Panasonic (NYSE: PC), Sony (NYSE: SNE), Garmin (NASDAQ: GRMN), Whirlpool (NYSE:WHR) and Newell Rubbermaid (NYSE: NWL) among others.  Obviously none of these companies compete directly, but they do make up a large portion of products that gadget lovers want to own.  Sodastream has that gadget appeal but also has a recurring revenue stream through the need for CO2 cartridges and soda flavors.

The big concern is the almost 50% short interest, especially since it is 80% institutionally owned.  I would only be speculating why a company that looks this strong and has increased consumer and product exposure is shorted this much.  My speculation, with no significant depth of thought is that this is remnants of "is this purely a hype product" thinking when the product came out.

After owning one of these and the 12-pack sample soda flavoring for about a month now, I have personally seen the value of having a multitude of soda flavors readily available without storing multiple cans/bottles of soda in the pantry.  The question that remains is, can this product start to take significant share of the home beverage market, become an enduring ecco product and continue its licensing with other name-brand beverages?  If so then SODA could reach back to its 2011 highs and possible fairly quickly, especially if short-covering is factored in.

This stock is fairly volatile and shows through in the options premiums, which make this a good prospect for a bull call spread (buy 40 and sell 50 strikes July or further out).  Covered calls are an option here as well given the strong premiums available.  If you are not experienced with options, I recommend buying the stock outright incrementally, a third or fourth at a time since the price fluctuates strongly.

If nothing else, owning a Sodastream machine makes stocking stuffers easy, just pick up a five-buck flavoring bottle, wrap, and put in the stocking! 

DECK Again

So, Decker shoes is what made a lot of millionaires in the past.  Pulled way back to the high 20's now in the 40's.  Today up 10% after a lot of talk about where they could be.  I'd wait to a low 40's and buy half and wait and see where it is going.

Happy Trading...

NFLX & Redbox

Everyone loves Redbox, get ready for Redbox Instant when Coinstar teams with Verizon...  More info from the Motley Fool :

http://www.fool.com/investing/general/2012/11/30/is-this-a-netflix-killer.aspx

Play at-the-money calls on CSTR and ride the underlying to 60-62...

Happy Trading...

Off-line, Sorry... New Ideas

Have been watching RIMM since the BB10 information started flowing.  Great article on the web-browser here and how it may make an impact:

http://www.techvibes.com/blog/blackberry-best-mobile-browser-2012-11-09

RIMM went from 20% to 5% market share and has never had a good browsing experience but is still the corporate tool of choice, this could be what is needed to get some market share back and any indication it will be well received will shoot this equity up fairly rapidly.  Looking at some 6-month bull call spreads...

SODA is the next on my list to watch.  SODA has continued to trade "correlated" to GMCR.  GMCR exploded after earnings which has drove SODA a bit.  SODA is now less than 50% shorted however it is not much below 50%.  Good marketing and earnings beats have piqued interest in some near-mid term moves.

SIRI has pulled back from approaching 3 but consolidated well.  2.50 calls for 14 are our play.

Happy Trading...

EMC Breaking Out

EMC provided an early look at its earnings for next week and popped 10% today.  Earnings have been coming in strong, yes they are low-balled, but enough to create enough momentum to trade for now.  EMC Jan 13 30 Calls were up 130% from yesterday, we added 50% to our position yesterday before the report and picked up more shares outright...  Jan 12 24 Calls up over 200%.   Have limits in to catch the momentum up.

Happy Trading!!!

Coal Profits

Sorry, I didn't ID this one but it was a very risky trade, although it netted 112% return in a few days thanks to short-covering.  PCX is something to keep on the radar-scope.  It's not poised to go bankrupt even though it's trading about 1500% below its 52-week high.  It ran up on some coal demand indicators that are fizzling and since it was highly shorted it got driven up.  I mention it now for those that are risk-takers or want  to try to day-trade it on the down-side.

Happy Trading...

EMC Returning Big Profits

EMC Jan 13 24 Calls returned 50% this week.  Pushing Jan 13 25 calls and long the equity as well for a good balance.  The pull-back prompted a half-dozen upgrades and price targets are at the 30$ range.  They report the towards the end of the next month.

The Euro relief rally was a good catalyst to move this back up, now if it can maintain this base you should see a push higher into earnings!

Happy Trading...

EMC Chart Two

Back above 200-day, pushing towards 50-day...  relief of overall market pressures coupled with great news and upgrades...



Happy Trading...

Greek Elections Surge Markets

The elections were one by the pro-bailout party, good news for short term jump.

EMC has been recovering well off the lows, well oversold.  The double-down on the options are proving profitable and the shares we bought outright are now primed to return significant profits.

EMC Deeply undervalued:

http://seekingalpha.com/article/664581-emc-deeply-undervalued-ready-to-surge?source=email_rt_article_readmore&ifp=0

Happy Trading...

And the futures are up!

Weekend is full of Global News

China reported a marginal slowdown, we'll see how the news sells this.  Retail sales were up but productivity was down by .2 from Bloom estimates.

Spain should request bailout funds.

World is slowing but how much is it slowing?

This weekend has much news from across the globe and will determine next weeks trading start.  Bloomberg is announcing the news most sanely...

Happy Trading...

What We're Trading Now

Nadda!....  I am buying long holdings of EMC to offset the likely loss on the call options.  Not much in the way of any recovery this year.  This may take some time but EMC getting beat up like this does present a buying opportunity.

Trade the VIX, short the indexes, play the Europe close bounce at 1130est.  Be in cash at the end of the day!

After the mess that the global economy is setting up for we will be primed to make money on the way back up.

S&P already below any hope of a bullish bounce.  Futures way down, will break below 12000 tomorrow.

Happy Trading...

EMC Technicals

Here it is, approaching 200 day MA... Not looking good here, but well in oversold territory.  Too much overall pressure on the market...

When a Stock can Become Optionable

Options on newly issued stocks can start trading when they meet standards set by the options exchanges. At the CBOE, for example, a spokeswoman outlines the rules as follows:

· Minimum of 7,000,000 shares of the underlying security must be owned by people other than officers, directors and shareholders with more than 10 percent of the stock. 

· Minimum of 2,000 stockholders

· Trading volume has been at least 2,400,000 shares in the preceding 12 months — i.e., it needs to reach cumulative trading volume of 2,400,000. If they hit that volume level in a day, or two, or three, that would qualify.

· Market price per share has been at least $3.00 for the previous five consecutive business days preceding the date on which a certificate is submitted to the Options Clearing Corporation for listing and trading.

Happy Trading

Monday Update

RAX got hit hard after missing by a penny.  However, this was unwarranted given the report showed growth across the board.  I think others believe this as well as it is off it's lows and trending higher on 11 million volume.  Recommend 50$ Jan 13 calls.

GMCR small bounce as expected for quick profit.

Layer into EMC carefully

GOOG, set up a trade trigger to buy 600 Jan 13 Calls when GOOG breaks 600 and sell when it breaks 608 or so, pick your own targets but this has proven a good range to wash-rinse and repeat.

Happy Trading...

Looking at EMC again

Picked up 25 30 Jan 13 calls.  Once EMC can build support at 30 should see the next move up.  It's currently in the mid 28 range even through the recent turmoil days of trading...

Happy Trading...

No More Green Mountain (GMCR)

I had picked up a small covered call on GMCR at 43 and change sold the 44's. Unwound it last week for a grand.  Good timing.  The report missed expectations and with all the hype on the company it took a 40% beating to well below 52-week lows.  All the GMCR hype is what made me open the covered call as their was a good premium on the options.  Shorts made big money this morning!  400% and above in some cases.

So, the report wasn't super terrible just couldn't meet the WS expectations, so what does this mean?  Is it time to take advantage of this, is it really a20% stock, did it deserve to lose 3B in value today?

Everywhere I look there are K-Cups and Keurigs with no slow down or need to replace with a Starbucks machine.  Today may be worth picking up some LEAP Calls at a discount.

GMCR announced their hardest thing was determining demand for their product.  This may be an information arbitrage situation setting up for some quick profits!

Happy Trading!

Nothing Like Delayed Updates

TNK, safe to hold if you got in on the 14 M share sale.  $7 price target.  Dividend still paying.

JOEZ, finally got some attention, has moved from .50 to 1.60ish, settled high 1.30s Friday after reporting on Thursday evening.  The else brand is exceeding expectations, wholesale and retail growth both grew.  Topline improved, now let's see what they do to increase that bottom-line.  Brand recognition is key, once that happens on to be the next True Religion?

GOOG splitting, has surpassed the 650 mark so those options performed well, pulled back on Friday.  keep on eye on how the split is perceived.

EMC Jan 30's next.  RIMM going down, down, down... buy-out in the future?  Still a valued service by business only consumers who don't want all the "toys" of most smart phones, who will pick them up?

Until next time, happy trading...

Dry Bulk Shipper (DRYS)

Dryships will report Wednesday.  Already up 100% off it's lows this year, it is still about 2 bucks below its high.  Dry bulk shipping should be the first to rebound over time followed by petroleum shippers.  DRYS does both.

Call activity is high across the front months and in and out-of-the money.

Will be watching the earnings report and looking to buy at-the-money calls on good news and forecast.

Also, check out Yahoo's Message board: http://messages.finance.yahoo.com/mb/drys

Happy Trading...

Baltic Shipping Index to Climb

More reasons to hold things like TNK...  Oversupply seen shrinking and recovery starting... Of course this is over the next couple of years.  My recco buy shipping companies monthly/quarterly and hold these for long-term dividend payments.  FRO use to pay 14 bucks a year dividend, of course the percentage will rely on the variable cost you pay.  This is why I continue to get in now.

http://www.cnbc.com/id/46451998

Happy Trading...

Weekend Update

TNK-I'm out, my limit was @ 4.50 and TNK breakthrough to 4.51 Friday to close at 4.42.  Earnings are out Thursday, they were upgraded but this was a pure trade set-up and I'm comfortable with how it performed.  I still own some TNK in a long-term account because of the dividend and potential dividend after the shipping sector recovers.

EMC-I am out of this as well.  Those of you that have stayed since the open of the trade at 1.51 for Jan 13 25 Calls, they are now trading over 4.  Approximately a 330% return so far.

CROX-17.50 Jan 13 Calls are almost up 100%, earnings due soon but looking stable.

NFLX- Pulling back now, but the 150 Calls bought when the underlying was in the 60s are up around 400%.

SIRI 2.50 Jan 13 2.50 Calls are approaching the 100% return mark.

Cloud and cloud supporting, goods and services in support of the cloud computing space are the next trend.  EMC for storage, VMW for virtualization.   HP is producing ridiculously low wattage servers and haven't seen the competition working this yet.  Reducing energy costs will increase revenue per server and flow through the top-line right to the bottom-line.  HP is around it's 52-week low, need to look into them more since the pro's have them targeted around 30.

SKYY is an ETF covering cloud and cloud support type industries.  It is currently around its high and is relatively new.  Would like to see if this is  a good way to keep in the cloud game as an investment.

End-clients, mobile devices and application developers and APP performance management are the other side of the cloud trade.  

Cloud based IPOs make up half of IPO filing form Seeking Alpha

http://seekingalpha.com/article/359781-cloud-based-solutions-drive-half-of-ipo-filing-activity-this-week

The SOLAR sector has heated back up, YNG, SOL, TSL, FSLR, MEMC all off the lows.

Looking the next big mover!

Happy trading...

ARAY AAPL GOOG TNK

Accuray (ARAY) up 15% today, now almost 100% from first mentioned.  TNK sold its offering over the last two days and now above the offering price.

GOOG over 600, 600 calls prime for profit taking.

AAPL approaching 500 fast.  New IPAD in March rumor

Happy Trading...

jason Wu sold out at Target today!

look for an earnings play here with at/in the money calls out about 6-months...

Happy trading...

FACEBOOK

Facebook to file for IPO Feb 1.  That's the rumor.  Then we will get to take a look at their financials.  Many analyst are already comparing this to the Google IPO.  Keeping an eye on this one.

Happy Trading...

Tech Rage, Some Shoes and Other Updates

AAPL, as usual, crushed earnings, up 7% in the AH breaking 450! NASDAQ futures up.  EMC smashed earnings and forecast for an almost 60% return on the Jan 25 13 LEAPS. 

CROX 17.50's up almost 100% from the time recommended.

Cloud is the future, storage, management and security of cloud components: hosting, enabling, transport etc.  Those are the companies to watch and find the best of breed.  EMC, VMWare NetApp, IBM etc. etc. etc.

Still watching GOOG, looking at Jan 13 600's for a long play.

Laughing at Wallstreet is a great book, put's the information arbitrage and psychology of trading boldy on well planned trades.  I need to write a review on this.  Bottom-line is the CROX and EMC calls were solid on every front and I should have split my portfolio between the two...

F reports Thursday, current indicators are pointing to a solid report.  Recommend trailing stops Wednesday as protection.  If it moves above 14, volitility should increase upping the Call premiums.  I plan on covering at 15 a couple months out with the plan to be called out, but I'll take the premium only as well.

SIRI, almost a double on the Jan 13 2$ Calls, the underlying is staying above 2 now, solid base, what's the catalyst for the move to $2.50...

ARAY, has recoverd nicely as well as ZQK.

My all-time fave and lacking call is TNK, it has been noted lately, has over half of it's spots covered for 12.  Has performed a nice rebound off the bottom, if you picked it up in the 3s hold this one, you may never get the dividend return like this again.  Also eyeing DRYS and FRO in the shipping lanes.

Airlines are worth watching again.

Happy Trading...

Memory FLASH

Research firm IC Insights predicts that sales of flash-memory chips will surpass DRAM sales this year, with revenue expected to reach $32.8 billion. DRAM sales are predicted to decrease 3%, to $30.3 billion. Flash memory's growth is expected to continue thanks to mobile-platform use and mobile-device adoption, IC Insights says.

Happy Trading...

Quick it's Quicksilver (ZQK)

ZQK broke out today and long-term guidance, we are now apporaching that 5+ mark we bought this for.  no worries taking profits here though.

Happy Trading...

CROX is going higher

CROX reported it's fourth quarter earnings will be at the top of its estimates!  Jumped over 2 bucks today and the Jan 13 17.50's are up to 4.90!

Happy Trading...

AA near 52-week low

With aluminum prices bottoming and demand still high, watch Alcoa after the bell on Monday.  They report then and any loss from fourth quarter could bring them down to 8 territory.  Maybe a outright buy with a cover later in the year...

Happy Trading...