The bulls and bears battled to mixed results on Monday as both sides looked for the next catalyst to cling to but there were none as economic news was light and earnings were a non-event. We mentioned trading would probably be lackluster, and it was, although there was a little action in Tech which we covered in the afternoon.
The Dow fell 20 points, or 0.2%, to finish at 11,362 but made a run to 11,392 which is just under our 11,400 target we have outlined as resistance. A break here could carry the Dow to 11,600-11,700. Support is at 11,200.
The S&P 500 slipped 2 points, or 0.1%, and settled at 1,223. The index stayed in our 1,220-1,225 zone but the bulls are looking for a charge to 1,250. A break above 1,230 would be bullish. There is a floor of support at 1,200 with 1,170-1,175 providing back-up.
The Nasdaq managed to end with a slight gain of 4 points, or 0.1%, and went out at 2,594. The index touched a new 52-week high of 2,599.19 and we have been calling for a print of 2,600-2,700 since early November. Specifically, the index has a shot at its January 2008 high of 2,661 and we only need a 3% move to get there by the end of the year? Book it.
One stock we want to highlight before roll out this morning is DryShips (DRYS, $6.21, up $0.33) which jumped nearly 6% yesterday and 12% on Friday. Shares are getting new life as interest in the company’s deep water drilling unit starts to gain momentum.
The stock does trade options and we show you two that surged 40% and 35%, respectively, on yesterday’s move inside our Members Area. Better yet, these options could return up to 300% if DryShips can get to double-digits in 2011!
Think about that folks. The stock is cheap enough to buy at current levels and we think shares can easily run to $8-$9 in 2011 but that would only be a 50% return from current levels. While owning a stock is always a safer trade than owning an option on a stock, we think there is a chance for a homerun here. A 50% return is a single but a 300% return is a grand-slam homerun. We haven’t taken a shot at the fences, yet, but we are in the batter’s box and have them on our Watch List. We still want to do some more research.
As we head to press, the Dow futures are up 87 points to 11,440 while the S&P futures are higher by 12 points to 1,234. The Nasdaq 100 futures are showing a 26 point pop and are at 2,216.
It’s should be a GREAT day for our current trades. Subscribers, check for the updates.]]>