Trade
Buy/write NX Quanex
Buy the stock, sell the May 50 call
A picture perfect chart base and upward earnings guidance are the impetus to buy this steel stock.
Current holdings:
PDLI PDL Biopharma (slight chance of it being called)
ABX Barrick Gold (certain to be called away today)
BAB British Air (hedged)
PGR Progressive (auto insurance)
NX Quanex steel (hedged)
Elsewhere, Google reports blow out earnings and booms higher. Google announcing earnings just before options expiration creates a real crap shoot situation for option traders. Dell gets slammed by an analyst and almost becomes interesting on valuation. One "magic" number is one-times sales (currently at 1.17 times at $27 per share). Dell would have to drop to about $24 for that 1.0 price-to-sales ratio. Ebay and Intel continue lower after their earnings. Google is not providing much of a halo effect for other tech stocks.
Oil stocks provide leadership for the broad market. Oil also leads a recovery in both gold in silver after yesterday's dump, the precious metals have recouped a good deal of the losses. Again, my opinion is that these volative markets, especially silver, are only for the most nimble, or those looking to average in or average out of a position.
No comments:
Post a Comment