Another Morning Pop
Take DRQ Profits!
PLAY: Sell your DRQ November 55 Calls (DRQ KK) at market, good for the day.
Dear Bottarelli Research Member,
Good morning. As we open the trading day, the major market averages are popping aggressively to the upside thanks to earnings news from Intel and J.P. Morgan Chase. In particular, JPM posted third-quarter earnings of $3.6 billion ($0.82 per share) compared to $527 million ($0.09 per share) one year ago. Since Thomson Reuters expected earnings of $0.52 per share, this was a big number. But as I look at these results, they don’t come without some hairy warts.
After all, JPM also reported that they nearly doubled the amount of money they set aside for failed loans in the quarter, which is a trend that they expect to continue for the foreseeable future. Since this is still a very troubling sign for the economy, there’s a possibility that you could see the professional traders use this morning’s pop as a nice exit opportunity. Therefore, let’s take advantage of this upside right now by locking in profits on our November call positions.
In particular, the DRQ November 55 Calls (DRQ KK) that we entered on October 13th for $1.90 have opened the day at $2.30, good for a 21% gainer. At the same time, the GMCR October 70 Calls (QGM JN) that we entered on October 12th for $2.60 are flirting with our entry price. Let’s take our DRQ profits while maintaining GMCR.
PLAY: Sell your DRQ November 55 Calls (DRQ KK) at market, good for the day.
At the same time, JPM’s powerful numbers are shooting PRU in the opposite direction. But let’s see if the pro traders sell this gap, which could lead to a quick reversal. Therefore, maintain your PRU November 50 Puts (PWQ JW). As always, I’ll follow up with more commentary as the day progresses. Until then…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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