Brent Archer
Virginia, US - http://www.investorsobserver.com
Brent Archer is an options analyst and writer at Investors Observer.
eBay drops on TV analyst's comments
eBay, Inc. (NASDAQ: EBAY) shares are falling today on no obvious news, but after CNBC analyst and BloggingStocks.com's own Jim Cramer said on his Mad Money TV show last night that he could not get behind the company, and that someone should buy them "and put them out of their misery." When Cramer talks, people have a habit of acting, so this could be the reason for the company's swoon. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on eBay. After hitting a one-year high of $40.73 in October, the stock hit a one-year low of $23.52 last week. This morning, EBAY opened at $25.21. So far today the stock has hit a low of $24.75 and a high of $25.41. As of 1:45, EBAY is trading at $24.80, down 0.58 (-2.3%). The chart for EBAY looks bearish and steady, while S&P gives the stock its highest 5 STARS (out of 5) strong buy rating.
For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $30 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in three months as long as EBAY is below $30 at October expiration. eBay would have to rise by more than 20% before we would start to lose money. Learn more about this type of trade here.
Continue reading eBay drops on TV analyst's comments
New York Times (NYT) lifted by earnings, 20% price hike
Shares of The New York Times Co. (NYSE: NYT) are trading higher today after the company posted a second-quarter profit of $21.1 million, or 15 cents per share. NYT's adjusted profit came in at 26 cents per share, beating analysts' estimates of 22 cents per share. The company also annouced an increase int eh newsstand price from $1.25 to $1.50. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NYT.After hitting a one-year high of $23.85 last July, the stock hit a one-year low of $12.08 last week. NYT opened this morning at $13.05. So far today the stock has hit a low of $12.38 and a high of $13.42. As of 1:15, NYT is trading at $13.00, up $0.16 (1.1%). The chart for NYT looks bearish and steady, while S&P gives the stock a bearish 2 Stars (out of 5) Sell rating.
For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $12.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 19.0% return in just four weeks as long as NYT is above $12.50 at August expiration. NYT would have to fall by more than 4.3% in the next few weeks before we would start to lose money. Learn more about this type of trade here.
Continue reading New York Times (NYT) lifted by earnings, 20% price hike
Continental Airlines (CAL) lifted by easing oil worries
Continental Airlines (NYSE: CAL) shares are trading higher today as oil futures are falling now that Hurricane Dolly looks like it will not hit key oil installations in the U.S. Gulf of Mexico. The recent slide in oil prices has been good news for most airline stocks, which were battered as investors acted like there was no stopping the rise in oil. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CAL.After hitting a one-year high of $37.79 in October, the stock hit a one-year low of $5.91 in July. CAL opened this morning at $13.46. So far today the stock has hit a low of $12.90 and a high of $15.20. As of 12:50, CAL is trading at $13.84, up $0.48 (4.4%). The chart for CAL looks bearish but improving slightly, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $5 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 19.0% return in just five months as long as CAL is above $5 at December expiration. Continental would have to fall by more than 64% before we would start to lose money. Learn more about this type of trade here.
Continue reading Continental Airlines (CAL) lifted by easing oil worries
Hershey (HSY) rises on strong Q2 earnings
The Hershey Co (NYSE: HSY) shares are trading higher today after the company reported a second-quarter profit of $41.5 million, or 18 cents a share, helped by a price increase and more efficient production lines. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on HSY.
After hitting a one-year high of $48.77 in August, the stock hit a one-year low of $32.31 earlier this month. HSY opened this morning at $35.55. So far today the stock has hit a low of $35.32 and a high of $36.81. As of 1:00, HSY is trading at $36.40, up $1.45 (4.1%). The chart for HSY looks bearish and improving, while S&P gives the stock a bearish 1 Star (out of 5) Strong Sell rating.
For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $30 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 7.5% return in just four months as long as HSY is above $30 at November expiration. Hershey would have to fall by more than 17% before we would start to lose money. Learn more about this type of trade here.
Continue reading Hershey (HSY) rises on strong Q2 earnings
Trade idea for Salesforce.com downgrade
Salesforce.com (NYSE: CRM) shares are falling today after an analyst at Citigroup downgraded the stock to "Hold" from "Buy" based on the stock's valuation. Investors are shrugging off Thomas Weisel's "Buy" initiation in favor of the Citi downgrade. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on CRM.After hitting a one-year low of $37.24 in August, the stock hit a one-year high of $75.21 in June. This morning, CRM opened at $67.15. So far today the stock has hit a low of $64.70 and a high of $67.23. As of 1:05, CRM is trading at $65.90, down $3.48 (-5.0%). The chart for CRM looks bearish but improving slightly, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bearish hedged play on this stock, I would consider an August bear-call credit spread above the $80 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 6.4% return in four weeks as long as CRM is below $80 at August expiration. CRM would have to rise by more than 21% before we would start to lose money. Learn more about this type of trade here.
Continue reading Trade idea for Salesforce.com downgrade
Chicago Merc (CME) soars on Q2 earnings
Chicago Mercatile Exchange (NYSE: CME) shares are soaring higher today after the company reported a second-quarter profit of $201 million, or $3.67 per share. Excluding one-time costs, CME earned $3.93 per share, beating analysts' estimates of $3.85 per share. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CME.After hitting a one-year high of $714.48 in December, the stock hit a one-year low of $282.00 last week. CME opened this morning at $328.99. So far today the stock has hit a low of $326.67 and a high of $349.80. As of 12:50, CME is trading at $344.28, up $18.75 (5.8%). The chart for CME looks bearish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.
For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $280 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just four weeks as long as CME is above $280 at August expiration. CME would have to fall by more than 18% before we would start to lose money. Learn more about this type of trade here.
Continue reading Chicago Merc (CME) soars on Q2 earnings
Nokia (NOK) drops on Vodafone (VOD) warning
Nokia (NYSE: NOK) shares are falling today after international wireless carrier Vodafone (NYSE: VOD) warned that FY2008 sales will likely fall below the company's forecast between 39.8 billion pounds ($79.7 billion) and 40.7 billion pounds. VOD blamed widespread economic weakness for the lagging sales, and if the wireless provider isn't doing well, then it could be a bad sign for NOK too. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on NOK.After hitting a one-year high of $42.22 in November, the stock hit a one-year low of $23.58 earlier this month. This morning, NOK opened at $26.36. So far today the stock has hit a low of $26.26 and a high of $26.72. As of 1:10, NOK is trading at $26.41, down $0.91 (-3.3%). The chart for NOK looks neutral and improving, while S&P gives the stock a 4 STARS (out of 5) buy rating.
For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $31 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 14.3% return in three months as long as NOK is below $31 at October expiration. Nokia would have to rise by more than 17% before we would start to lose money. Learn more about this type of trade here.
Continue reading Nokia (NOK) drops on Vodafone (VOD) warning
Wachovia (WB) lifted by Bank of America earnings
Wachovia (NYSE: WB) shares are trading higher with most other banks after rival Bank of America (NYSE: BAC) posted a second-quarter profit that beat analysts' expectations. WB reports earnings tomorrow morning before the open and is pretty much in the same boat as BAC, so this, along with other positive earnings from financial stocks last week could imply that Wachovia will see a good reaction to their release. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on WB.After hitting a one-year high of $53.10 in September, the stock hit a one-year low of $7.80 last week. WB opened this morning at $13.52. So far today the stock has hit a low of $12.98 and a high of $14.66. As of 12:55, WB is trading at $13.61, up 64 cents (4.9%). The chart for WB looks bearish and steady, while S&P gives the stock its lowest 1 STARS (out of 5) strong sell rating.
For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $7.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just four weeks as long as WB is above $7.50 at October expiration. Wachovia would have to fall by more than 44% before we would start to lose money.
WB hasn't been below $7.50 at all in the past year and has shown support just below $10 recently. This trade could be risky if the company's earnings (due out tomorrow morning) disappoint, but even if that happens, this position could be protected by the support the stock might find at its year low at $7.80.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in WB or BAC.
Trade idea for Whole Foods (WFMI) upgrade
Whole Foods Market (NASDAQ: WFMI) shares are trading higher today after an analyst at Morgan Stanley upgraded the stock to Equal-weight from Underweight, as noted by Eric Buscemi. If you agree with Morgan Stanley and think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on WFMI.After hitting a one-year high of $53.65 in October, the stock hit a one-year low of $20.18 last week. WFMI opened this morning at $23.27. So far today the stock has hit a low of $22.37 and a high of $24.06. As of 12:45, WFMI is trading at $22.50, up $1.12 (5.2%). The chart for WFMI looks bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $19 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 15.6% return in just four weeks as long as WFMI is above $19 at August expiration. Whole Foods would have to fall by more than 15% before we would start to lose money.
WFMI hasn't been below $20 at all in the past year and has shown support around $21 recently. This trade could be risky if the company's earnings (due out on 8/5) disappoint, but even if that happens, this position could be protected by the support the stock might find at its year low between $20 and $21.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in WFMI.
XM Satellite (XMSR) subscriber numbers growing
XM Satellite Radio (NASDAQ: XMSR) shares are trading higher today after the company announced it gained 322,000 new net subscribers during the second quarter, 17% higher than the same quarter last year. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on XMSR.After hitting a one-year high of $16.44 in November, the stock hit a one-year low of $6.78 earlier this month. XMSR opened this morning at $8.75. So far today the stock has hit a low of $8.69 and a high of $9.02. As of 12:15, XMSR is trading at $9.04, up 48 cents (5.8%). The chart for XMSR looks bearish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $6 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 9.9% return in just two months as long as XMSR is above $6 at September expiration. XM would have to fall by more than 33% before we would start to lose money.
XMSR hasn't been below $6.75 at all in the past year and has shown support around $7.25 recently. This trade could be risky if the company's earnings (due out late this month) disappoint, but even if that happens, this position could be protected by the support the stock might find at its year low at $6.80, which is has bounced up from recently.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in XMSR.
Merck (MRK) higher on Buy rating despite Vioxx settlement news
Merck & Co (NYSE: MRK) shares are trading higher today after a Citi Investment Research analyst initiated coverage on the stock with a "Buy" rating, saying the company will benefit as rivals' drug patents expire in the coming year. This is despite news that came out today that Merck will soon start to send out almost $5B in Vioxx settlement checks. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on MRK.After hitting a one-year high of $61.62 in December, the stock hit a one-year low of $34.49 in June. MRK opened this morning at $37.12. So far today the stock has hit a low of $36.60 and a high of $37.38. As of 1:05, MRK is trading at $37.38, up 42 cents(1.1%). The chart for MRK looks neutral and improving, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.
For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $32.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 16.3% return in just three months as long as MRK is above $32.50 at October expiration. Merck would have to fall by more than 13% before we would start to lose money. Learn more about this type of trade here.
MRK hasn't been below $34.50 at all in the past year and has shown support around $37 recently. This trade could be risky if the company's earnings (due out 7/21) disappoint, but even if that happens, this position could be protected by the support the stock might find at its year low, which is just below $35.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in MRK.
Oracle (ORCL) lifted by IBM earnings strength
Oracle (NASDAQ: ORCL) shares are trading higher today after competitor IBM (NYSE: IBM) posted a strong second-quarter profit that beat analysts' estimates. IBM said its sales were strongest in its information technology services division, which could be a good sign for ORCL. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on ORCL.After hitting a one-year low of $18.18 in February, the stock hit a one-year high of $23.57 in June. ORCL opened this morning at $20.89. So far today the stock has hit a low of $20.65 and a high of $21.20. As of 1:15, ORCL is trading at $21.14, up 37 cents(1.8%). The chart for ORCL looks bearish and steady, while S&P gives the stock its highest 5 Stars (out of 5) strong buy rating.
For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $18 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 7.1% return in just two months as long as ORCL is above $18 at September expiration. Oracle would have to fall by more than 15% before we would start to lose money. Learn more about this type of trade here.
ORCL hasn't been below $18 at all in the past year and has shown support around $20 recently. This trade could be risky if the company's earnings (due out in mid September) come out before expiration and disappoint, but even if that happens, this position could be protected by the support the stock might find at its year low, which is just above $18.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent owns and controls positions in ORCL and IBM.
Mattel (MAT) scores win in Bratz case
Mattel (NYSE: MAT) shares are trading higher today after the company posted a second-quarter profit of $11.8 million, or 3 cents per share, beating analysts' estimates of 2 cents per share. Also, last night Mattel won a copyright case against rival MGA Entertainment over the origins of MGA's Bratz dolls. Next week a jury will decide on any damages owed to MAT by MGA. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on MAT.After hitting a one-year high of $26.12 last July, the stock hit a one-year low of $16.42 in January. MAT opened this morning at $20.42. So far today the stock has hit a low of $19.96 and a high of $21.18. As of 1:05, MAT is trading at $20.48, up $2.20 (12.0%). The chart for MAT looks bearish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $15 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 13.6% return in just six months as long as MAT is above $15 at January expiration. Mattel would have to fall by more than 26% before we would start to lose money. Learn more about this type of trade here.
MAT hasn't been below $16.40 at all in the past year and has shown support around $17 recently. This trade could be risky if the damages turn out to be negligible, but even if that happens, this position could be protected by the support the stock might find around $16.50, where it has bottomed out twice in the past seven months.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in MAT.
Regions Financial boosted by finance sector earnings
Regions Financial (NYSE: RF) shares are trading higher today with other financial stocks after a slew of positive financial earnings. JP Morgan Chase (NYSE: JPM) reported a second-quarter profit of $2 billion, or 54 cents per share, beating analysts' predictions of 44 cents per share, while PNC Financial (NYSE: PNC) and Comerica (NYSE: CMA) also reported earnings and are trading higher. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on RF.After hitting a one-year high of $33.65 last July, the stock hit a one-year low of $6.41 on Tuesday. RF opened this morning at $8.88. So far today the stock has hit a low of $8.09 and a high of $9.91. As of 12:45, RF is trading at $9.07, up 1.06 (12.8%). The chart for RF looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $5 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 13.6% return in just one month as long as RF is above $5 at August expiration. RF would have to fall by more than 44% before we would start to lose money. Learn more about this type of trade here.
RF hasn't been below $6.40 at all in the past year and has shown support around $7 recently. This trade could be risky if the company's earnings (due out on 7/22) disappoint, but most of the banks that have reported so far have responded well to their earnings reports.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in RF nor CMA. He does own and control bullish hedged trades on PNC and JPM.
Texas Instruments rises on Nokia earnings, outlook
Texas Intruments (NYSE: TXN) shares are trading higher today after mobile-phone maker Nokia (NYSE: NOK) reported a second-quarter profit of $2.18 billion, beating analysts' estimates on strong sales growth. TXN's semiconductor chips are used in NOK phones, so this is good news for TXN. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on TXN.After hitting a one-year high of $38.99 last July, the stock hit a one-year low of $26.48 on Tuesday. TXN opened this morning at $28.72. So far today the stock has hit a low of $28.03 and a high of $29.18. As of 1:05, TXN is trading at $28.65, up 0.59 (1.6%). The chart for TXN looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $25 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in just one month as long as TXN is above $25 at August expiration. TI would have to fall by more than 12% before we would start to lose money. Learn more about this type of trade here.
TXN hasn't been below $26 at all in the past year and has shown support around $27 recently. This trade could be risky if the company's earnings (due out on 7/21) disappoint, but even if that happens, this position could be protected by the support the stock might find just below $27, where it bottomed over the past month.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in TXN nor NOK.
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