The bulls returned to their winning ways on Wednesday by pushing the major averages higher for the sixth time in seven sessions. The market once again traded in a tight range over Europe’s debt concerns but found some strength once their markets closed. Although the indexes finished slightly off their highs, the momentum continues to be on the bulls side as they look to test new highs.
The Dow added 56 points, or 0.5%, to finish at 12,626. The index traded to a high of 12,643 and easily closed above its next wave of resistance. The blue-chips will now try to tackle 12,800 with 12,350 still serving as support.
The S&P 500 was up a little over a point to settle at 1,339 after trading just above 1,340. We are still looking for a run past 1,350 and up to 1,375 with support coming in at 1,300.
The Nasdaq gained 8 points, or 0.3%, and closed at 2,834. Tech traded to a high of 2,838 and we are looking for a pop past 2,850 over the near-term. Support is at 2,800.
We wanted to give a quick update on the coffee stocks and a free trade we profiled a few weeks ago outside our Members Area. Green Mountain Coffee Roasters (GMCR, $93.45, up $1.48) and Peet’s Coffee & Tea (PEET, $61.06, up $0.19) hit fresh 52-week highs yesterday and Starbucks (SBUX, $40.42, down $0.53) touched a 1-year high of $41.11 on Tuesday. We said in early May that Starbucks shares would run to $40 but we ran out of time with the June options and should have went with the July calls. As far as Peet’s, here were our thoughts on June 24 (quotes from that day):
“Peet’s Coffee & Tea (PEET, $55.36, up $0.50) is at double-nickels after hitting a 52-week high of $56.26.
We have been following Peet’s for quite some time and we mentioned earlier this month that we felt shares were headed to $70. We have tried playing options on the stock but they are thinly traded without much open interest and usually carry wide bid/ ask prices. For instance, the August 60 calls (PEET110820C00060000, $1.30, up $0.15) have a “bid” of $1.05, which is what you would get if you sell the options, while the “ask” is $1.45. Only 2 contracts traded today which represents the open interest.” (END)
The August 60 calls are now at $1.80 but the bid/ask is a lot closer than before.
Futures are pointing towards a decent open despite jobless claims coming in just below expectations and hopes of the knuckleheads in DC coming to an agreement on the nation’s debt. As we head to press, Dow futures are up 58 points; S&P futures are higher by 9 points; Nasdaq futures are advancing 15 points.