MomentumOptionsTrading.com Weekly Wrap for 3/10/13
11:30pm (EST)
1. Market Summary
2. Nymox Pharmaceutical (NYMX) – New York Medical Experiment
3. Earnings
4. Weekly Wrap Portfolio Update
5. Week Ahead
(To view the charts, please log into the Members Area and go to the Weekly Wrap Premium section.)
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1. Market Summary
“The bulls continue to defy the laws of gravity as they turned a normally bearish February into a bullish month. With its 9th positive Friday, the Dow gained 229 points, or 2%, for the month and is just 107 points from clearing its intraday all-time high of 14,196. The S&P 500 gained 20 points, or just over 1%, and is working on a 9-week win streak. The Nasdaq advanced 27 points, or 1%, while the Russell 2000 was up a dozen pints, or 1%, as well for February.
The indexes’ gains show that while the market went up, it appears as though the “defensive” or blue-chips stocks were the go to group. Monday’s pullback to the lows would have easily given the bears the victory for the week and the slight test towards the 50-day MA’s was either a warning sign or one of the nicest bear traps in recent memory.
March is an interesting month because it favors both the bulls and bears with the market moving higher throughout the first 2 weeks while struggling with the last 2 weeks of the month. We mentioned last week the first day of March had been bearish in recent years and the opening dip on Friday looked as though the bears would continue that streak as the Dow dropped triple-digits on negative news from across the pond. China’s Purchasing Managers Index (PMI) came in at 50.1 for February, down from 50.4 the previous month, and close to contraction (a reading below 50). The United Kingdom also posted lower PMI numbers while Italy’s came in at 45-and change. Good things economic news here at home came in better than expected as Consumer Confidence and vehicle sales were up which helped with Friday’s turnaround.
The Dow fell to 13,937 while the S&P 500 tested 1,501 on Friday. The Nasdaq dropped to a low of 3,129 while the Russell 2000 kissed 899. After giving back 1% at the open, the market started March off with decent quarter-percent gain. With the major indexes near 5-years highs and all-time highs, another 2%-3% gain would have all of the indexes at all-time highs, excluding Tech of course, and would be the blow-off type top that sucks in the last of the quiet money still on the sidelines.
If this were to happen over the next few weeks, it would be the perfect setup for a pullback going into triple-witching week and the back half of March. Triple witching is when all index, stock, and future options expire and this event will take place on March 15. The past couple of years have been bullish on March triple-witching expiration day as well as the rest of the month but over the past decade there has been heavy losses in certain years so it will something the bulls will have to guard against.
The panic selling on Monday, and to a degree on Friday, shows how the market is at the mercy of negative headlines and that the drops can come hard and swift in a matter of hours. The sequester budget cuts kicked in on Friday and none of the zombies were working overtime before the midnight deadline or this weekend to come up with something for the coming week.
The head zombie blamed the Republicans for the failure to reach a compromise, as usual, but the wide-ranging spending cuts could come back to haunt those who don’t believe this is a big deal. The total cuts of $80 billion really are a drop in the bucket but it could slow economic growth by at least 0.5%-1% on an already struggling economy recovery.
The political gridlock in DC is worse than the traffic on I95 during rush hour and it isn’t going to get better anytime soon. The next zombie rally is slated for Wednesday, March 27 and they will need to pass a new resolution to fund the government by April 15 or there will be more shutdowns. Since the President has been in office, he has rung up $1 trillion in yearly deficits that has pushed America $17 trillion in the hole and he still hasn’t come up with a budget.
And while we are at it, the next time he takes a dig a the millionaires and billionaires (he is a millionaire) or the Wall Street CEO’s and their private jets, Air Force Uno costs $180,000 an hour to fly so the trip he took to play golf with Tiger costs taxpayers well over a $1 million and that’s not including the pit stop to Chicago. We haven’t done the math for the Hawaii bill back in December but you can see why the government needs to slash spending and get a president in there who will work America’s deficit the other way without raising taxes.
When asked if he was a dictator on Friday, the President said no but his actions and antics are dividing the zombies even further apart so the fireworks should be pretty good in a few weeks as they try to come to an agreement on SOMETHING.
Gold rebounded to push $1,619/ ounce midweek but closed at $1,576 on Friday while Silver ended at $28.55 after testing a low of $27.92. We have also been following the action in Copper and it held $3.50 for the week but did test $3.47 on Friday:
The warnings signs are there for a pending market correction but with the Fed in play and Ben Bernanke at the money joystick, the market could continue to see a push to all-time highs over the next few weeks. However, the number of stocks making new highs versus new lows is going the opposite way which is also suggesting a market top and Monday’s have favored the bears in recent weeks.
Some of the oversold indicators have pulled back following Monday’s 3% drop from high to lows and the bulls normally run strong through April. As long at the bottom uptrend lines continue to hold the market will move higher but once they are snapped (and we do have one index struggling), the bulls wall of worry will come crumbling down.” (from 3/3/2013 Weekly Wrap Update)…
The bears have been in a deep sleep and continue to hibernate as the bulls were able to push fresh highs during the first full week of March. We mentioned last week that March is typically a strong month for the bulls with the market averaging 1% gains. Although the back half of the month tends to see some weakness, the momentum will be hard to stop.
The Dow added 67 points, or 0.5%, to finish at 14,397 on Friday. The blue-chips tested the 14,000 level to start the week but it was all uphill from there as all-time highs were reached on Tuesday’s breakout. We have been watching 14,200 as resistance and said last week a close above this level could get 14,500 in play over the near-term. Wednesday’s peak was 14,320 and Thursday’s high was 14,354. Friday’s high was 14,413. If 14,500 clears, hello 14,750. The Dow hit a low of 13,784 just 2 weeks ago and has since surged over 600 points. Going forward, it will be interesting to see if 14,000 will be the “new” floor of support on any pullback but the bears will nees to crack 14,200, first. The Dow was at 14,089 to start Monday’s open and surged over 307 points, or 2.2%, by Friday’s close. The blue-chips have zoomed 1,293 points, or 9.9%, so far in 2013.
The S&P 500 jumped 7 points, or 0.5%, to end at 1,551. The bulls needed to clear 1,525 coming into the week while holding 1,510-1,500 on any pullback and Monday’s trip to 1,512 was all the bears could muster. The bulls were able to rebound off the lows and got their close above 1.525 by a fifth of a point. There was no dip on Tuesday which confirmed 1,550-1,575 could be in play and the close at 1,539 was impressive. Wednesday and Thursday’s pops pushed 1,545 and Friday’s opening run to 1,552 was just what we wanted to see. Although the index quickly gave back the gains to trade down to 1,542, the close back above 1,550 confirms there should be a run to all-time highs, or 1,575. It is quite possible the S&P 500 could see 1,600 before a significant pullback. The bears will be gunning for a close back below 1,525 this week and 1,500 should serve as major support. The S&P 500 came into the week at 1,518 and advanced 33 points, or 2.2%, on another fine effort by the bulls. The index is officially up triple-digits for the year – 125 points, or 8.8%.
The Nasdaq popped a 12-pack, or 0.4%, to close at 3,244. Tech needed to clear 2 hurdles last week and the first was at 3,175. Monday’s close of 3,182 was sweet and then the second hurdle at 3,200 was cleared on Tuesday’s jailbreak as the index finished at 3,224. We mentioned a close above 3,200 could lead to 3,225-3,250 and Tuesday’s peak was 3,227. The hints were good enough as the Nasdaq kissed 3,233 and 3,235 the following 2 sessions. Friday’s peak was 3,248 and if 3,250 clears, the bulls could push 3,300 over the near-term. The bears will try to force the action back below 3,225-3,200 this week. Tech was at 3,169 before Monday’s opening bell and roared 75 points, or 2.4%, higher for the week. For 2013, the Nasdaq is higher by 225 points, or 7.5%.
The Russell 2000 gained 8 points, or 0.9%, to settle at 942.50 on Friday. The small-caps needed to hold 900 on any pullback following the previous Friday’s dip to 899. The bears drank a 6-pack on Monday’s open to push 908 but they passed out and allowed the bulls to escape with a 2-point win with the close of 916. This set the bulls up for a run past 920 which needed to be cleared as confirmation a test to fresh highs were coming again. Tuesday’s open was right on 920 and the bulls never looked back after closing the session at 927. Wednesday’s tease to 930 was a prelude to Thursday’s record close of 934.57. Friday’s peak was 942.56 and if 950 is cleared there could be a run to 970-975 in store for the small-caps over the next month or so. The bears will try to get aggressive and push 930 this week but they won’t have any momentum until they crack 920 again. The Russell 2000 was at 916 to start the week and jumped 28 points, or 3%, after setting all-times highs again. The index is showing a gain or 93 points, or 11%, for the year.
The S&P Volatility Index ($VIX, 12.59, down 0.47) was at 15.36 to start the week and the bulls were looking to get below 15 while pushing new highs. Monday’s pop to 16.16 had Wall Street worried as the market tested support but by the close, the VIX had retreated to end at 14.01. We said last week a move back to 13.50 was possible on continued strength and Tuesday’s strong rally pushed the VIX to a low of 13.24. The close came at 13.48. Wednesday’s and Thursday’s lows were 13.17 and 13.03, respectively, and Friday’s close below 13 gets the 52-week low of 12.08 (from mid-February) back in play. We aren’t sure if the VIX will hit single-digits before a pullback but at some point this year we do see the VIX falling below 10. A move back above 14 could be a warning sign the bears are waking up and at times we have said, don’t flinch until 15 triggers. This is one of those times again.
The Dow just closed it tenth winning Friday for 2013 and hasn’t posted a week ending loss since the last day of 2012. This accomplishment has occurred 8 times since the 1950’s with the last Friday win streak coming in 2007. That Dow Friday winning streak lasted 13 weeks and ended with nearly a 1.5% drop. At current levels, that would mean the Dow could drop over 200 points when its Friday win streak ends if history repeats itself.
This Friday will pose its own challenges as Quadruple Witching can be volatile. This event happen 4 times a year on the third Friday of every March, June, September and December and is when index futures, market index options, stock options and stock futures expire. While Quadruple Witching days can be accompanied by considerable volatility, this week’s economic news is light and overall trading volume is below normal levels. This could mean the Dow’s Friday win streak reaches 11 this week.
While there continues to be concerns the market has gotten frothy, we mentioned last week the bear trap from late February that saw the market drop 3% on the Italian election results compressed some of the overbought technical indicators that many technicians like to use. We like to use them as well but we also rely on market history and sentiment to judge where there market is headed over the short and longer-terms.
As far as bullish/ bearish sentiment, we like to follow the AAII Investor Sentiment Survey. In late January, bullish sentiment had jumped to over 50% but with the talking heads and Wall Street pros still calling for a pullback and with the market at new highs, bullish sentiment is now just over 31%. Meanwhile, bearish sentiment has risen from a low of 24% to just over 38% while neutral sentiment has risen from 23% to 30%.
Bullish sentiment is the percentage for expectations that the market will rise over the next six months. Bearish sentiment is the percentage for expectations the market will fall over the next six months. The pullback in bullish sentiment is also favorable over the short-term because it means we have not seen the euphoria that often accompanies new market highs.
We covered the short-term charts this week on the major indexes to show the major support levels because there is no resistance when they are making new all-time highs until there is a pullback. We mentioned last week that we expected continued strength until March 22, or shortly ahead of the next zombie rally on March 27 to keep the government going. This event could lead to a pullback but if there is some type of resolution it could lead to a market rally that lasts through April which averages the highest monthly returns out of the historic 6-month bull runs from November through April.
We gave our 2013 price targets for the indexes on February 3 and while we will talk more about them in the coming weeks {Dow 16,000; S&P (500) 1,700; Nasdaq 3,800; and Russell (2000) 1,025} we wanted to show the 10-year chart on the S&P 500 from late January we drew up for you. The close above 1,550 on Friday was perfect for our prediction the S&P 500 could trip 1,700 this year but there is still a lot of time between now and then.
Winter started on December 21 and Spring 2013 is just around the corner (March 20). The S&P was at 1,443 and fell 1% to close at 1,430 on the first day of winter. There bears made some noise just before yearend as the index tested 1,400 but is possible there could be a 200-point rally before they wake up.
As long as support holds, the near-term targets we have given you are Dow 14,750; S&P (500) 1,600; Nasdaq 3,300; and Russell (2000) 975.
As we head to press, futures are showing a higher open for Monday. Dow futures are up 10 points to 14,384 while the S&P 500 futures are higher by a third of a point to 1,549.60. The Nasdaq 100 futures are advancing a point to 2,801.
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Key of Technicals Used In Following Articles
2. Nymox Pharmaceutical (NYMX) – New York Medical Experiment
By Michael Bryant
Nymox Pharmaceutical (NYMX, $5.00, down $0.14) has two important dates coming up. First, on Monday, March 11th, it will release its 4th quarter earnings. But more importantly, it will speak at the 28th Annual European Association of Urology Congress on Sunday, March 17th.
The company was incorporated in May, 1995 by acquiring all of the common shares of DMS Pharmaceutical, a private company which had been carrying on research and development since 1989. DMS’ research focused on diagnostics and drugs for brain disorders and diseases of the aged with an emphasis on Alzheimer’s disease. On March 2, 2000, it acquired Serex, a privately held diagnostic company based in New Jersey. Through this acquisition, it added NicAlert and TobacAlert to its product portfolio. Thus, the company is divided into two subsidiaries: Nymox Corporation which performs AlzheimAlert test and Serex which does some of the manufacturing for NicAlert and TobacAlert. Both subsidiaries do some research and development. NicAlert and TobacAlert are currently being distributed by Nymox, CVS/pharmacy, Drugstore.com, and Jant Pharmacal Corporation. The company markets its products primarily in the United States, Canada, and Europe.
Serex developed and patented its particle valence technology: a unique, highly sensitive, new method to detect very small amounts of biochemical indicators in body fluids such as blood, urine, and saliva. This technology can be adapted to detect a wide range of biochemical indicators for diseases, conditions, and drug use. Serex also assisted in the development of AlzheimAlert test, which measures the level of a brain protein called neural thread protein (NTP). NTP is elevated early in Alzheimer’s disease.
Its products under development include NX-1207, NXC-4720, NXB-4221, NXB-5886, and NXT-1021. It has a license and collaboration agreement with Recordati of Ireland for the development and commercialization of NX-1207. The table below summarizes its products and those in development.
| NicAlert | Marketed | test that use urine or saliva sample and a test strip to determine detect smoking or tobacco-related status |
| TobacAlert | Marketed | home test using urine or saliva sample and a test strip to determine of a person’s level of exposure to tobacco products including second hand smoke |
| AlzheimAlert | Marketed | test that aids physicians in the diagnosis of Alzheimer’s disease |
| NX-1207 | Phase 3 | treatment of benign prostatic hyperplasia (BHP), the enlargement of the prostate gland |
| Phase 2 | treatment of hepatocellular carcinoma (the most common type of liver cancer) and localized prostate cancer | |
| NXC-4720 | In development | antibacterial agent for the treatment of E. coli O157:H7 bacterial contamination in hamburger meat and other food and drink products and for the treatment of urinary tract and other bacterial infections in humans. |
| NXB-4221 | In development | treatment of chronic and persistent urinary tract infections |
| NXB-5886 | In development | treatment of streptococcal infection |
| NXT-1021 | In development | treatment of staphylococcal infection |
On December 20,2012, the company secured commitment for $15 million in equity financing from institutional investors. The new funding will be used for general corporate purposes including the current U.S. trials for NX-1207.
On February 19th, the company announced its lead drug candidate, NX-1207, has not shown any evidence of eliciting an immune reaction in men treated with intraprostatic injections of the drug. Extensive testing of men in its Phase 3 trials (NX02-0017 and NX02-0018) and Phase 3 repeat injection safety study (NX02-0020) showed no evidence of antidrug antibody formation. Periodic safety monitoring reviews of the NX-1207 trials to date have shown no evidence of any allergic reaction to the drug either on first injection or repeat injection.
On March 5th, the company sent off good news that Phase 2 prostate cancer clinical trials for NX-1207 have so far had positive safety assessment with no serious or unexpected adverse effects related to the drug. The cancer trial had attained the halfway point in patient recruitment. The NX03-0040 prostate cancer clinical evaluation of 150 men was testing low (2.5 mg) and high (15 mg) single doses of NX-1207 for the effect to eradicate or shrink low grade localized prostate cancer tumors.
On Sunday, March 17th, a presentation on NX-1207 for benign prostatic hyperplasia (BPH) will be given during the 28th Annual European Association of Urology Congress in Milan, Italy at 3:45 p.m. in the Milano Congressi.
As mentioned earlier, the company will release 4th quarter earnings on Monday, March 11th. Analysts estimate the company will earn -$0.08 per share on $800,000. In the 3rd quarter, it beat earnings estimates by $0.02. As shown in the graphs below, analysts’ revenue and earnings target seems easily attainable from those of the 3rd quarter. Thus, we expect it to at least meet estimates.
Athena Diagnostics, a division of Quest Diagnostics (DGX), Amorfix Life Sciences (AMF.TO), and privately held Innogenetics NV are the company’s top competitors in Alzheimer’s disease diagnosis. NicAlert and TobacAlert’s main competition are products used by Lab One, LabCorp (LH), and Quest Diagnostics (DGX).
upward cross in the next few weeks. The earnings report probably would not sway the stock as much as the 28th Annual European Association of Urology Congress. We expect that the company will have good things to say.
At $5.00, the stock is well below its only target of $16.43 as recorded by Thomson/First Call. This means there are few on Wall Street following this stock. Using a scale of 1.0 as a strong buy and 5.0 as a sell, the rating of the stock is 1.0, unchanged from a week ago.
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Last Month |
Two Months Ago |
Three Months Ago |
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Strong Buy |
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1 |
1 |
1 |
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Buy |
0 |
0 |
0 |
0 |
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Hold |
0 |
0 |
0 |
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0 |
0 |
0 |
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Sell |
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3. Earnings
The companies in BOLD, we are looking at as possible trades and we may list call or put options on them in our Daily Newsletter. If they become official recommendations, we sent out Trade Alerts or include them in our 9am and 1pm updates that come out during the week (Quotes are from 3/8/13 close)
By Catherine Tierney
Monday
7 Days (SVN, $13.39, Flat), Analogic (ALOG, $74.25, up $0.25), Artesian (ARTNA, $22.47, down $0.04), Assisted Living Concepts (ALC, $11.86, down $0.02), BioScrip (BIOS, $11.04, up $0.17), Black Diamond (BDE, $7.85, down $0.01), Chiquita Brands (CQB, $6.74, up $0.13), Citizens (CIA, $9.37, up $0.11), Communications (JCS, $10.83, up $0.02), Connecticut Water (CTWS, $29.27, down $0.19), Cross Country Healthcare (CCRN, $6.06, down $0.06), CVR Energy (CVI, $59.43, down $0.25), CVR Refining (CVRR, $29.86, up $0.02), Diamond Foods (DMND, $17.56, up $0.26), Dick’s Sporting (DKS, $50.60, up $0.24), Douglas Dynamics (PLOW, $14.46, down $0.04), DTS (DTSI, $20.63, up $0.13), Erickson Air-Crane (EAC, $13.56, up $0.04), Fortegra Financial (FRF, $9.25, up $0.12), Gulf Island Fabrication (GIFI, $22.77, down $0.23), Harvest Natural (HNR, $5.72, up $0.05), Home Inns & Hotels Management (HMIN, $30.39, down $0.39), Insmed (INSM, $6.26, Flat), Investors Real Estate Trust (IRET, $9.75, down $0.08), KCAP Financial, (KCAP, $10.69, up $0.13), Luxfer (LXFR, $13.39, up $0.14), Manitex (MNTX, $10.51, down $0.54), National Western Life Insurance (NWLI, $166.00, up $6.49), NN (NNBR, $9.37, up $0.20), Oil-Dri Corp. of America (ODC, $28.20, down $0.15), Oxford (OXM, $52.91, up $0.74), Perfect World (PWRD, $11.29, up $0.36), PHI (PHII, $31.27, down $0.25), Preferred Apartment Communities (APTS, $9.53, up $0.18), RRSat Global Communications Network (RRST, $7.82, up $0.20), Safety Insurance (SAFT, $47.63, up $0.05), Scientific Games (SGMS, $8.88, Flat), Stewart Enterprises (STEI, $9.01, up $0.09), Sutron (STRN, $5.52, down $0.03), Sutron (STRN, $54.82, down $1.17), Union Bankshares (UNB, $20.00, up $0.15), Urban Outfitters (URBN, $#41.31, up $0.82), Walter Investment (WAC, $47.29, down $0.42), Xenoport (XNPT, $9.02, up $0.39), Xerium (XRM, $5.62, down $0.22), Yongye (YONG, $5.55, up $0.04)
Tuesday
ACADIA (ACAD, $6.53, down $0.01), Amedisys (AMED, $11.77, up $0.05), BioSpecifics (BSTC, $16.29, up $0.09), Bon-Ton Stores (BONT, $11.79, down $0.10), Bridgepoint Education (BPI, $9.98, up $0.19), Core-Mark (CORE, $47.72, up $0.26), Costco Wholesale (COST, $103.04, up $1.07), CPI Aerostructures (CVU, $8.55, up $0.10), Craft Brew Alliance (BREW, $6.71, down $0.09), Dole Food Company (DOLE, $11.69, up $0.07), Engility (EGL, $19.18, up $0.15), Evolving (EVOL, $6.49, down $0.03), First Citizens Banc (FCZA, $6.63, down $0.16), GenMark Diagnostics (GNMK, $10.91, up $0.19), Global Cash Access (GCA, $7.13, up $0.08), GSI (GSIG, $9.78, down $0.07), GSV Capital (GSVC, $8.68, down $0.09), Horizon (HRZN, $15.09, down $0.26), Inter Parfums (IPAR, $24.82, down $0.15), JinkoSolar (JKS, $7.30, down $0.11), JTH (TAX, $15.74, Flat), Kansas City Life Insurance (KCLI, $37.74, up $0.13), Kennedy-Wilson (KW, $17.06, up $0.23), Laredo Petroleum (LPI, $17.88, up $0.32), Limoneira (LMNR, $19.75, up $0.09), LMI Aerospace (LMIA, $22.51, up $0.53), magicJack VocalTec (CALL, $14.90, up $0.21), Numerex (NMRX, $12.41, down $0.25), Raven (RAVN, $29.36, up $0.09), Resources Connection (RECN, $12.78, up $0.04), Saba Software (SABA, $9.35, up $0.25), Saga (SGA, $48.55, down $0.03), Scholastic (SCHL, $31.76, up $0.43), Sears Hometown and Outlet Stores (SHOS, $44.53, up $1.00), Stage Stores (SSI, $26.75, up $0.29), Tandy Leather Factory (TLF, $6.45, up $0.45), TICC Capital (TICC, $10.58, up $0.06), Transmontaigne (TLP, $46.92, up $1.41), Whitestone REIT (WSR, $15.06, up $0.01)
Wednesday
Addus HomeCare (ADUS, $8.99, up $0.23), AEP Industries (AEPI, $72.50, Flat), AEP (AEPI, $7.07, up $0.05), Bright Horizons Family (BFAM, $28.08, up $0.13), ChemoCentryx (CCXI, $14.00, up $0.06), China Biologic Products (CBPO, $23.10, down $1.19), Chindex (CHDX, $11.00, down $0.11), Christopher & Banks (CBK, $6.42, down $0.12), Express (EXPR, $19.06, up $0.26), Federated National (FNHC, $6.18, up $0.07), Flotek Industries (FTK, $14.38, up $0.15), Global Sources (GSOL, $8.09, Flat), Guess’ (GES, $28.46, up $0.57), Hot Topic (HOTT, $13.83, down $0.04), Magnetek (MAG, $11.97, down $0.01), Matador (MTDR, $8.21, up $0.08), The Men’s Wearhouse (MW, $29.41, up $0.68), Orexigen Therapeutics (OREX, $6.63, up $0.06), Perion (PERI, $9.38, down $0.12), PhotoMedex (PHMD, $14.74, up $0.04), Primus Telecommunications (PTGI, $11.98, $up $0.33), Providence (PRSC, $17.43, up $0.03), Summit Midstream (SMLP, $24.74, up $0.58), Sunesis (SNSS, $5.95, up $0.11), TravelCenters of America (TA, $7.18, down $0.32), Tree.Com (TREE, $16.89, up $0.05), Vera Bradley (VRA, $24.30, up $0.42)
Thursday
AAON (AAON, $25.04, up $0.13), ADA-ES (ADES, $27.84, up $0.59), Aeropostale (ARO, $13.68, down $0.02), Ameresco (AMRC, $7.98, down $0.08), Bonanza Creek Energy (BCEI, $38.15, up $0.35), Callon Petroleum (CPE, $5.08, down $0.43), Carmike Cinemas (CKEC, $15.78, up $0.01), Cornerstone (CRTX, $6.92, down $0.07), Coronado Biosciences (CNDO, $8.21, down $0.03), Diana Shipping (DSX, $9.06, down $0.02), Dynegy (DYN, $19.58, down $0.44), Ebix (EBIX, $15.47, down $0.14), Edgen (EDG, $8.00, up $0.06), Global (GLP, $36.20, up $1.40), GSE (GSE, $7.74, up $0.32), Hawaiian Telcom Holdco (HCOM, $20.17, up $0.11), Health Insurance Innovations (HIIQ, $13.97, up $0.05), Integrated Electrical (IESC, $5.72, up $0.07), (KIRK, $11.69, down $0.22), Krispy Kreme Doughnuts (KKD, $14.69, down $0.09), Lifetime Brands (LCUT, $11.21, up $0.38), Merrimack (MACK, $6.50, down $0.01), Natural Gas (NGS, $17.46, up $0.27), Neonode (NEON, $5.88, up $0.46), Nortek (NTK, $73.00, up $0.60), Northern Tier (NTI, $31.41, up $0.65), Obagi Medical (OMPI, $13.99, down $0.10), ShangPharma (SHP, $8.91, Flat), STEC (STEC, $5.12, up $0.07), Supernus (SUPN, $7.85, down $0.02), Synta (SNTA, $9.80, up $0.17), Buckle (BKE, $46.23, up $1.34), Ulta Salon, Cosmetics & Fragrance (ULTA, $89.79, down $0.12), Zumiez (ZUMZ, $23.06, up $1.06)
Friday
Brown Shoe (BWS, $17.47, up $0.22), Citi Trends (CTRN, $10.24, down $0.01), Federal Signal (FSS, $7.68, down $0.02), Hibbett Sports (HIBB, $52.95, down $1.23), Jinpan (JST, $5.84, up $0.13), Keryx Biopharmaceuticals (KERX, $7.38, up $0.12), Optibase (OBAS, $5.65, Flat), Stonemor (STON, $26.02, up $0.42), Vaalco Energy (EGY, $8.39, up $0.14), Zhongpin (HOGS, $12.85, up $0.08)
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4. Weekly Wrap Covered Call Portfolio Update (Closing prices as of 3/8/13)
Our Weekly Wrap Closed Trade Track Record for 2013 is 7-1 (51-3, overall since 2011).
Cisco Systems (CSCO, $21.83, up $0.03)
Original Entry Price: $21.13 (3/5/13)
Lowered Price from Selling Options: $21.13
Exit Target: $24
Return: 3%
Stop Target: $20
Action: Cisco reached a fresh 52-week peak of $21.97 on Friday and we were looking for a close above $22. We would like to sell a call option once this level clears and we are targeting the May 23 calls (CSCO130420C00023000, $0.32, up $0.02) but would like to get a little more premium. Shares are on track to test $24-$25 and support is at $21.
Bank of America (BAC, $12.07, down $0.19)
Original Entry Price: $11.61 (3/5/13)
Lowered Price from Selling Options: $11.61
Exit Target: $15+
Return: 4%
Stop Target: $10
Action: We were expecting a run past $12 when we got into the trade last Tuesday. Shares reached a 52-week high of $12.44 on Friday before pulling back. The chart shows a run to $14 is possible over the near-term if $12.50 is cleared with support trying to hold at the 50-day MA. There is further help at $11.25 which is forming a strong base and represent the bottom uptrend line. We made gains of 20%, 26%, 6% last year with BAC and closed out another covered call trade for 14% earlier this year. We are in no hurry on selling an option until shares trade past $14.
Research in Motion (BBRY, $13.06, down $0.16)
April 12.50 calls (BBRY130405C00012500, $1.55, down $0.10)
Original Entry Price: $12.86 (3/5/13)
Lowered Price from Selling Options: $11.36
Exit Target: $15+
Return: 15%
Stop Target: $10
Action: We sold in-the-money options when we recommended the trade because the premiums were so juicy it lowered our risk. Support is at $12 if $13 doesn’t stick with further risk down to $10 on a pullback. Shares traded to a high of $13.56 midweek and a close above $14 would be bullish. The company’s new Z10 phone will hit the U.S> later this month.
We recommended buying Research In Motion at $12.86 on 3/5/13. We also sold the April 12.50 calls for $1.50 which lowered our cost basis to $11.36. If we are called-away at $12.50 in April, the trade will make 10%.
Apollo Group (APOL, $16.97, up $0.11) (Short Position)
Original Entry Price: $16.10 (3/4/13)
Lowered Price from Selling Options: None
Exit Target: $12
Return: -5%
Stop Target: $20
Action: This is our first short recommendation for the Weekly Wrap and we should have recommended shorting the stock when it was in the $30’s last year. We felt we needed to add this feature during momentum swings that take place in the market and we feel comfortable betting against the stock.
The break below $18 last month was bearish and shares were at their 52-week lows when we sold them. There is risk back to $18 and our stop is at $20 but we feel as though shares will test the low teens by the summer.
Sony (SNE, $15.59, up $0.03)
April 16 calls (SNE130420C00016000, $0.50, down $0.05)
Original Entry Price: $15.38 (3/4/13)
Lowered Price from Selling Options: $14.78
Exit Target: $20+
Return: 5%
Stop Target: $12
Action: A close above $16 could be bullish for a short-term push to $18. We are expecting Sony to rebound to $20 at some point this year. Support is at $15 followed by the base at $14.
We recommended buying Sony at $15.38 on 3/4/13. We also sold the April 16 calls for 60 cents which lowered our cost basis to $14.78. If we are called-away at $16 in April, the trade will make 8%.
Keryx Biopharmaceuticals (KERX, $7.38, up $0.12)
Original Entry Price: $7.22 (2/12/13)
Lowered Price from Selling Options: $7.22
Exit Target: $10+
Return: 2%
Stop Target: None
Action: Shares are trying to break out of a tight trading range and a close above $7.80 would be bullish for a run past $8, and possibly $10, again. Support is at $7 with $6.50 as but any setbacks with its drug, Zerenex, would be bearish.
We recommended buying KERX at $7.22 on 2/12/13.
Yahoo (YHOO, $22.90, up $0.20)
April 22 calls (YHOO130420C00022000, $1.30, up $0.10)
Original Entry Price: $19.81 (2/6/13)
Lowered Price from Selling Options: $19.16
Exit Target: $25
Return: 20%
Stop Target: $14
Action: Shares kissed $23.09 and fresh 52-week highs midweek and we have been calling for a push to $24-$25 over the near-term. Support is at $21.50 but a new base could be forming at $23.
We recommended buying Yahoo at $19.81 on 2/6/13.
On 2/13/13 we sold the April 22 calls for 65 cents which lowered our cost basis to $19.16. If we are called-away at $22 in April, the trade will make 15%.
Solazyme (SZYM, $9.38, up $0.32)
Original Entry Price: $12.35 (8/9/12)
Lowered Price from Selling Options: $11.55
Exit Target: $15+
Return: -19%
Stop Target: $5
Action: Shares finally cleared resistance at $9 on Friday and a close above $9.50 would be bullish for a run up to the 200-day MA. Support is moving up to $8.50, from $8.
We recommended buying SZYM at $12.35 on 8/9/2012 and for every 100 shares to sell the September 12.50 calls for 80 cents. This lowered the cost basis to $11.55.
Scientific Games (SGMS, $8.88, flat)
Original Entry Price: $11.10 (3/20/12)
Lowered Price from Selling Options: $11.10
Exit Target: $13
Return: -20%
Stop Target: None
Action: We were looking for a close above $9.25 last week as a tight trading is forming. A break above $9.60 would be supper bullish while a close below $8.50 would be bearish. Earnings are due out on Monday and shares are poised for a big move on the news below support or past resistance.
We recommended buying SGMS at $11.10 on 3/20/12.
Pizza Inn (PZZI, $3.19, down $0.22)
Original Entry Price: $4.50 (2/22/12)
Lowered Price from Selling Options: No options available
Exit Target: $9
Return: -29%
Stop Target: None
Action: Shares rallied last week to push $3.50 and the next wave of resistance is at $3.60. We would love to see a close above $3.80 that would suggest a breakout is on the horizon. Support at $3 held as shares may have bottomed.
We recommended buying PZZI at $4.50 on 2/22/12.
MGM Resorts International (MGM, $12.37, down $0.07)
March 14 calls (MGM130316C00014000, $0.02, flat)
Original Entry Price: $13.77 (2/2/12)
Lowered Price from Selling Options: $12.35
Exit Target: $15
Return: 0%
Stop Target: None
Action: The March options expire this Friday and we will look to sell an April or May option next week if we aren’t called away. Last week’s low was $12.00 which is near-term support. There is risk down to $11.50-$11 (100-day and 200-day MA’s) on further weakness. A move back above $12.75 and the 50-day MA would be bullish.
We recommended buying MGM at $13.77 on 2/2/2012 and for every 100 shares to sell the March 15 calls for 45 cents. This lowered the cost basis to $13.32.
On 3/20/12 we recommended selling the April 14 calls for $0.65 which lowered the cost basis to $12.67.
On 2/13/13 we recommended selling the March 14 calls for $0.32 which lowered the cost basis to $12.35. If we are called away at $14 in mid-March the trade will make 13%.
Trades on HOLD: DryShips (DRYS, $1.96, up $0.05), AKS Steel Holding (AKS, $3.85, up $0.09), Rare Element Resources (REE, $2.57, down $0.15), Rambus (RMBS, $5.64, up $0.04), Bebe Stores (BEBE, $4.08, up $0.03), Vivus (VVUS, $11.70, up $0.28)
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6. Week Ahead
