Monthly Archives: March 2013

Optionity Daily Report 03/28/2013

Date: March 28, 2013
Daily Market Statistics

Source: Barrons

S&P 500 5-Day Daily Chart

(click to enlarge)

Source: Google Finance

Economic Calendar(click to enlarge)

(click to enlarge)

Source: Briefing

Options Market Recap

The market sentiment was driven by greed with Fear & Greed Index at 72, which had increased from the previous day closing of 68. As reported by CBOE, the total put/call ratio was 0.90 for the day. The index put/call ratio was 0.98, and the equity put/call ratio was 0.68. The CBOE volatility index (VIX) put/call ratio was 0.25. The stocks with unusual call activities had been identified through our daily options scanning process, with the scanning criteria where the daily call option volume ratio was above 2.00 (2x of the average call option volume) with a call option volume above 10,000. Unusual option activities can be an indicator or precursor of a major movement for the underlying stock.

(click to enlarge)Source: Schaeffer’s Research

Stocks with Unusual Volume

Below is the top 10 list obtained from AVAFIN.com for options alert with the following screening criteria:

  1.  Unusual Volume
  2.  300% spike in volume
  3.  In all sectors and all industries

(click to enlarge)

Source: AVAFIN.COM

Market Volatility and Analysis

(click to enlarge)

For Option Equity Put/Call Ratio, the MACD (12, 26, 9) continues to be slightly bullish. RSI (14) is decreasing and indicating a slightly bearish lean. RSI (14) closed at 48.58 (previous closing of 51.55). MACD Histogram is currently at 0.002. If MACD and RSI both become bullish, then market is expected to decline.(click to enlarge)

SPDR S&P 500 ETF Trust (SPY)

SPY opened flat and closed higher at $156.55 (+0.25%). The volume was 26.64M. On weekly basis, the MACD (12, 2, 9) is showing a bullish trend and the MACD Histogram increased in the last trading day and closed at 0.700. SPY is currently trading above its 200-day MA of $119.68 and its 50-day MA of $140.82. RSI (14) increased and closed at 75.53. The next resistance is $161.10 (R2).

Optionity Core-20 Options Portfolio (Credit Put Strategy)

Stock criteria:

  1.  Large Cap with low beta
  2.  Fair/Under-valued
  3.  Consistent, strong earnings
  4.  Dividend distribution
  5.  High liquidity, large volume
  6.  Good/strong economic moat

This options portfolio consists of 20 core stocks. The portfolio will employee mainly the credit put strategy with the primary objective of generating consistent cash flow. The portfolio focuses on 1) sufficient sector diversification 2) risk/reward ratio control 3) margin of safety by leveraging options.

Daily portfolio performance will be updated at Seeking Alpha Instablog and Optionity.com.

Transaction details will be updated whenever new position is opened or the existing position is closed/expired/adjusted.

Core-20 Stocks Update

(click to enlarge)

Source: Seeking Alpha

Existing Position(s):

Core 20 Positions:

MDLZ credit short put spread $22/$25 June 21, 2013 ($0.31 credit, established on February 15, 2013)

CHL credit short put spread $50/$52.5 April 19, 2013 ($0.30 credit, established on February 25, 2013)

CHL credit short put spread $50/$52.5 April 19, 2013 ($0.55 credit, established on March 6, 2013)

TEVA credit short put spread $35/$37.5 April 20, 2013 ($0.19 credit, established on March 7, 2013)

WFM credit put spread $80.5/$83 May 17, 2013 ($0.68 credit, established on March 13, 2013)

CHL credit short put spread $50/$52.5 April 19, 2013 ($0.75 credit, established on March 19, 2013)

ORCL credit short put spread $29/$31 May 17, 2013 ($0.32 credit, established on March 21, 2013)

ORCL credit short put spread $29/$31 May 17, 2013 ($0.38 credit, established on March 25, 2013)

Other Options Positions:

AKAM credit short put spread $30/$32 May 17, 2013 ($0.38 credit, established on February 13, 2013)

NOV credit short put spread $60/$62.5 May 17, 2013 ($0.51 credit, established on February 14, 2013)

HL credit short put spread $3.5/$4.5 April 19, 2013 ($0.32 credit, established on March 11, 2013)

NOV credit short put spread $60/$62.5 May 17, 2013 ($0.36 credit, established on March 19, 2013)

ZNGA credit short put spread $2.5/$3 June 21, 2013 ($0.16 credit, established on March 25, 2013)

Closed Position(s):

Core 20 Positions:

GLW credit short put spread $11/$12 Mar. 15, 2013 ($0.23 credit, established on February 7, 2013) => Closed short put $12 at $0.07 on February 20, 2013. $0.16 profit (20.78% Return on Margin, 13 days, including non-trading days). $11 put position was sold for $0.04 on February 26, 2013, adding $0.04 to the total profit.

Other Options Positions:

N/A

 

All rights reserved © Optionity 2013

Valero Energy: All Ethanol Plants Running, Improving Cash Flow [Seeking Alpha]

Valero Energy Corp (VLO) is a refining and marketing company. VLO closed flat at $44.95 on March 27, 2013. VLO had been trading in the range of $20.00-$48.97 in the past 52 weeks. VLO has a market cap of $24.85B with a beta of 1.53. With the recent pullback, investors can review the long-term position for VLO, which has higher margins with a fair priced cash flow.

All Ethanol Plants Running

Valero Energy had resumed production on March 21, 2013 at an ethanol plant in Linden, Indiana, the last of several plants that the company idled in 2012 due to poor margins. The Linden refinery was idled last year. When running, it can process about 43 million bushels of corn into 120 million gallons of denatured ethanol and 370,000 tons of co-products. Valero spokesman Bill Day said, “Improved margins have allowed the plant to be operated profitably, which led to the restart”.

Operations resumed at a Valero facility in Bloomingburg, Ohio, in early March and a plant in Albion, Nebraska, was restarted last month. With the restart of the Linden, Indiana, plant, all 10 of Valero’s U.S. ethanol facilities are online.

Read MORE.

Optionity Daily Report 03/27/2013

Date: March 27, 2013

Daily Market Statistics

Source: Barrons

S&P 500 5-Day Daily Chart

(click to enlarge)

Source: Google Finance

Economic Calendar(click to enlarge)

Source: Briefing

Options Market Recap

The market sentiment was driven by greed with Fear & Greed Index at 68, which had decreased from the previous day closing of 75. As reported by CBOE, the total put/call ratio was 0.92 for the day. The index put/call ratio was 0.71, and the equity put/call ratio was 0.68. The CBOE volatility index (VIX) put/call ratio was 0.31. The stocks with unusual call activities had been identified through our daily options scanning process, with the scanning criteria where the daily call option volume ratio was above 2.00 (2x of the average call option volume) with a call option volume above 10,000. Unusual option activities can be an indicator or precursor of a major movement for the underlying stock.

(click to enlarge)

Source: Schaeffer’s Research

Stocks with Unusual Volume

Below is the top 10 list obtained from AVAFIN.com for options alert with the following screening criteria:

  1.  Unusual Volume
  2.  300% spike in volume
  3.  In all sectors and all industries

(click to enlarge)

Source: AVAFIN.COM

Market Volatility and Analysis

(click to enlarge)

For Option Equity Put/Call Ratio, the MACD (12, 26, 9) continues to be slightly bullish. RSI (14) is increasing and indicating a slightly bullish lean. RSI (14) closed at 51.55 (previous closing of 48.58). MACD Histogram is currently at 0.006. If MACD and RSI both become bullish, then market is expected to decline.(click to enlarge)

SPDR S&P 500 ETF Trust (SPY)

SPY opened lower and closed slightly higher at $156.16 (+0.01%). The volume was 21.08M. On weekly basis, the MACD (12, 2, 9) is showing a bullish trend and the MACD Histogram did not change in the last trading day and closed at 0.669. SPY is currently trading above its 200-day MA of $119.67 and its 50-day MA of $140.81. RSI (14) stayed the same at 74.94. The next resistance is $161.10 (R2).

Optionity Core-20 Options Portfolio (Credit Put Strategy)

Stock criteria:

  1.  Large Cap with low beta
  2.  Fair/Under-valued
  3.  Consistent, strong earnings
  4.  Dividend distribution
  5.  High liquidity, large volume
  6.  Good/strong economic moat

This options portfolio consists of 20 core stocks. The portfolio will employee mainly the credit put strategy with the primary objective of generating consistent cash flow. The portfolio focuses on 1) sufficient sector diversification 2) risk/reward ratio control 3) margin of safety by leveraging options.

Daily portfolio performance will be updated at Seeking Alpha Instablog and Optionity.com.

Transaction details will be updated whenever new position is opened or the existing position is closed/expired/adjusted.

Core-20 Stocks Update

(click to enlarge)

Source: Seeking Alpha

Existing Position(s):

Core 20 Positions:

MDLZ credit short put spread $22/$25 June 21, 2013 ($0.31 credit, established on February 15, 2013)

CHL credit short put spread $50/$52.5 April 19, 2013 ($0.30 credit, established on February 25, 2013)

CHL credit short put spread $50/$52.5 April 19, 2013 ($0.55 credit, established on March 6, 2013)

TEVA credit short put spread $35/$37.5 April 20, 2013 ($0.19 credit, established on March 7, 2013)

WFM credit put spread $80.5/$83 May 17, 2013 ($0.68 credit, established on March 13, 2013)

CHL credit short put spread $50/$52.5 April 19, 2013 ($0.75 credit, established on March 19, 2013)

ORCL credit short put spread $29/$31 May 17, 2013 ($0.32 credit, established on March 21, 2013)

ORCL credit short put spread $29/$31 May 17, 2013 ($0.38 credit, established on March 25, 2013)

Other Options Positions:

AKAM credit short put spread $30/$32 May 17, 2013 ($0.38 credit, established on February 13, 2013)

NOV credit short put spread $60/$62.5 May 17, 2013 ($0.51 credit, established on February 14, 2013)

HL credit short put spread $3.5/$4.5 April 19, 2013 ($0.32 credit, established on March 11, 2013)

NOV credit short put spread $60/$62.5 May 17, 2013 ($0.36 credit, established on March 19, 2013)

ZNGA credit short put spread $2.5/$3 June 21, 2013 ($0.16 credit, established on March 25, 2013)

Closed Position(s):

Core 20 Positions:

GLW credit short put spread $11/$12 Mar. 15, 2013 ($0.23 credit, established on February 7, 2013) => Closed short put $12 at $0.07 on February 20, 2013. $0.16 profit (20.78% Return on Margin, 13 days, including non-trading days). $11 put position was sold for $0.04 on February 26, 2013, adding $0.04 to the total profit.

Other Options Positions:

N/A

 

All rights reserved © Optionity 2013

Wells Fargo And JPMorgan Chase: Buying For Solid Fundamentals And Inexpensive Cash Flow [Seeking Alpha]

Wells Fargo & Co (WFC) and JPMorgan Chase & Co. (JPM) are two large-cap bank stocks with strong cash flow, which comes at an attractive price (P/CF below 8). Both stocks also have stronger ROE and lower P/E compared with peers. WFC and JPM will be reviewed fundamentally and technically in this article. Investing strategies will also be presented.

Wells Fargo & Co

WFC was up 0.24% and closed at $37.30 on March 26, 2013. WFC had been trading in the range of $29.80-$38.20 in the past 52 weeks. WFC has a market cap of $196.60B with a beta of 1.36. WFC remains a great long-term buy with its solid fundamentals and inexpensive cash flow.

Analysts Calls and Estimates

On March 13, 2013, BMO Capital initiated coverage on WFC with a market perform rating and a price target of $40.00. Analysts currently have a mean target price of $39.51 for WFC, suggesting 5.92% upside potential. Analysts, on average, are estimating an EPS of $0.88 with revenue of $21.58B for the current quarter ending in March, 2013. For 2013, analysts are projecting an EPS of $3.64 with revenue of $85.61B, which is 0.60% lower than 2012. However, for 2014, analysts are predicting an EPS of $3.89 with revenue of $86.43B, which is 1.00% higher than 2013.

Read MORE.

National Oilwell Varco And Enterprise Products: 2 Solid Stocks To Own [Seeking Alpha]

National-Oilwell Varco, Inc. (NOV) and Enterprise Products Partners L.P. (EPD) are two oil & gas related stocks in the sector of basic materials, both with high net margins, solid revenue growth, and offering steady dividends. Both stocks will be analyzed fundamentally and technically in this article. Investing strategies will also be reviewed.

National-Oilwell Varco, Inc.

NOV was up 1.40% and closed at $69.74 on March 26, 2013. NOV had been trading in the range of $59.07-$89.95 in the past 52 weeks. NOV has a market cap of $29.64B with a beta of 1.71. NOV remains a great buy with its strong fundamentals and solid growth at current valuation.

On March 26, 2013, Guggenheim upgraded NOV from neutral to buy with a price target of $83.00 (from $71.00). Analysts currently have a mean target price of $85 for NOV, suggesting 21.88% upside potential. Analysts, on average, are estimating an EPS of $1.37 with revenue of $5.39B for the current quarter ending in March, 2013. For 2013, analysts are projecting an EPS of $5.96 with revenue of $22.72B, which is 13.40% higher than 2012.

Read MORE.

Westport Innovations: Improving Earnings And Ready For New Emission Standards [Seeking Alpha]

Westport Innovations Inc. (WPRT), with a market cap of $1.56B, is a provider of engine and fuel system technologies, engaged in the research, development and marketing of low-emission engine and fuel injection systems that utilize alternative gaseous fuels such as natural gas, propane or hydrogen. WPRT was down 0.14% and closed at $28.24 on March 26, 2013. WPRT had been trading in the range of $21.93-$45.85 in the past 52 weeks. WPRT is currently 38.41% below its 52-week high and 28.77% above its 52-week low.

EPA Certificate

As reported by Zacks, Cummins Westport, a joint venture between Cummins Inc. (CMI) and Westport, revealed that its ISX12 G engine had received a certificate from the U.S. Environmental Protection Agency. The engine met both the EPA 2013 regulations and the new greenhouse gas and fuel-efficiency rules that are about to take effect next year. Limited production of the ISX12 G engine will be started next month, and full production of the engine will start in August.

WiNG Power Ready on Ford F-Series

Westport announced that the Ford F-Series Super Duty trucks with the Westport WiNG Power System will soon be available to Canadian customers and be ready for delivery to customers by late June 2013.

Read MORE.

Optionity Daily Report 03/26/2013

Date: March 26, 2013

Daily Market Statistics

Source: Barrons

S&P 500 5-Day Daily Chart

(click to enlarge)

Source: Google Finance

Economic Calendar(click to enlarge)

Source: Briefing

Options Market Recap

The market sentiment was driven by greed with Fear & Greed Index at 76, which had increased from the previous day closing of 72. As reported by CBOE, the total put/call ratio was 0.79 for the day. The index put/call ratio was 0.77, and the equity put/call ratio was 0.62. The CBOE volatility index (VIX) put/call ratio was 0.30. The stocks with unusual call activities had been identified through our daily options scanning process, with the scanning criteria where the daily call option volume ratio was above 2.00 (2x of the average call option volume) with a call option volume above 10,000. Unusual option activities can be an indicator or precursor of a major movement for the underlying stock.

(click to enlarge)Source: Schaeffer’s Research

Stocks with Unusual Volume

Below is the top 10 list obtained from AVAFIN.com for options alert with the following screening criteria:

  1.  Unusual Volume
  2.  300% spike in volume
  3.  In all sectors and all industries

(click to enlarge)

Source: AVAFIN.COM

Market Volatility and Analysis

(click to enlarge)

For Option Equity Put/Call Ratio, the MACD (12, 26, 9) continues to be slightly bullish. RSI (14) is decreasing and indicating a slightly bearish lean. RSI (14) closed at 48.58 (previous closing of 53.52). MACD Histogram is currently at 0.002. If MACD and RSI both become bullish, then market is expected to decline.(click to enlarge)

SPDR S&P 500 ETF Trust (SPY)

SPY opened higher and closed higher at $156.15 (+0.70%). The volume was 23.54M. On weekly basis, the MACD (12, 2, 9) is showing a bullish trend and the MACD Histogram increased and closed at 0.669. SPY is currently trading above its 200-day MA of $119.67 and its 50-day MA of $140.81. RSI (14) increased to 74.94 from 71.75 with an increasing buying momentum. The next resistance is $161.10 (R2).

Optionity Core-20 Options Portfolio (Credit Put Strategy)

Stock criteria:

  1.  Large Cap with low beta
  2.  Fair/Under-valued
  3.  Consistent, strong earnings
  4.  Dividend distribution
  5.  High liquidity, large volume
  6.  Good/strong economic moat

This options portfolio consists of 20 core stocks. The portfolio will employee mainly the credit put strategy with the primary objective of generating consistent cash flow. The portfolio focuses on 1) sufficient sector diversification 2) risk/reward ratio control 3) margin of safety by leveraging options.

Daily portfolio performance will be updated at Seeking Alpha Instablog and Optionity.com.

Transaction details will be updated whenever new position is opened or the existing position is closed/expired/adjusted.

Core-20 Stocks Update

(click to enlarge)

Source: Seeking Alpha

Existing Position(s):

Core 20 Positions:

MDLZ credit short put spread $22/$25 June 21, 2013 ($0.31 credit, established on February 15, 2013)

CHL credit short put spread $50/$52.5 April 19, 2013 ($0.30 credit, established on February 25, 2013)

CHL credit short put spread $50/$52.5 April 19, 2013 ($0.55 credit, established on March 6, 2013)

TEVA credit short put spread $35/$37.5 April 20, 2013 ($0.19 credit, established on March 7, 2013)

WFM credit put spread $80.5/$83 May 17, 2013 ($0.68 credit, established on March 13, 2013)

CHL credit short put spread $50/$52.5 April 19, 2013 ($0.75 credit, established on March 19, 2013)

ORCL credit short put spread $29/$31 May 17, 2013 ($0.32 credit, established on March 21, 2013)

ORCL credit short put spread $29/$31 May 17, 2013 ($0.38 credit, established on March 25, 2013)

Other Options Positions:

AKAM credit short put spread $30/$32 May 17, 2013 ($0.38 credit, established on February 13, 2013)

NOV credit short put spread $60/$62.5 May 17, 2013 ($0.51 credit, established on February 14, 2013)

HL credit short put spread $3.5/$4.5 April 19, 2013 ($0.32 credit, established on March 11, 2013)

NOV credit short put spread $60/$62.5 May 17, 2013 ($0.36 credit, established on March 19, 2013)

ZNGA credit short put spread $2.5/$3 June 21, 2013 ($0.16 credit, established on March 25, 2013)

Closed Position(s):

Core 20 Positions:

GLW credit short put spread $11/$12 Mar. 15, 2013 ($0.23 credit, established on February 7, 2013) => Closed short put $12 at $0.07 on February 20, 2013. $0.16 profit (20.78% Return on Margin, 13 days, including non-trading days). $11 put position was sold for $0.04 on February 26, 2013, adding $0.04 to the total profit.

Other Options Positions:

N/A

 

All rights reserved © Optionity 2013

Gilead Sciences: Stribild Recommended, Great Long-Term Hold [Seeking Alpha]

Gilead Sciences, Inc. (GILD), with a market cap of $68.16B, is a research-based biopharmaceutical company, which develops and markets therapies to treat life-threatening infectious diseases with the core portfolio focused on HIV, liver diseases, such as hepatitis B and C, and cardiovascular/metabolic and respiratory conditions. GILD was down 1.16% and closed at $44.98 on March 25, 2013. GILD continues to be bullish and has gained 10.90% since my last focused article of “Gilead Sciences: A Great Long-Term Buy And Heading Bullishly Into Earnings.” In this article, recent development will be updated for GILD and new investing strategy will be presented.

Stribild Recommended

As reported by Zacks, GILD announced that the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) recently rendered a positive opinion on its HIV combination pill, Stribild (formerly known as Quad). Stribild is a combination of elvitegravir, cobicistat and Truvada (combination of Viread and Emtriva). As quoted, “The CHMP recommended the approval of Stribild for treating HIV infected adults who are either antiretroviral-naïve or are HIV infected without known mutations associated with resistance to any of the components of Stribild.” The CHMP’s positive recommendation will be reviewed by the European Commission, which has the authority to approve medicines for use in the 27 countries of the European Union (EU).

GILD expects a final decision on its Marketing Authorisation Application (MAA) for Stribild in the coming months. As reported by Business Wire, Stribild has received marketing approval in the United States, Canada, South Korea and Australia. Gilead has also granted its Indian manufacturing partners and the Medicines Patent Pool the right to develop and distribute generic versions of Stribild in 100 developing countries.

Read MORE.

EMC And Activision Blizzard: Buy For Cheap Cash Flow [Seeking Alpha]

EMC Corporation (EMC) and Activision Blizzard, Inc. (ATVI) are two solid technology companies, both with high margins and inexpensive cash flow, as well as healthy balance sheets. Both stocks are currently trading below analysts’ target prices and received positive updates from analysts recently. EMC and ATVI will be analyzed fundamentally and technically in this article. Investing strategies will also be presented.

EMC Corporation

EMC is a leading provider for hardware, software and services for enterprise network storage. EMC holds 80% ownership of outstanding shares in VMWare (VMW), the largest global vendor providing virtualization software for server operating systems. EMC was down 1.70% and closed at $23.74 on March 25, 2013. EMC had been trading in the range of $22.75-$30.00 in the past 52 weeks. EMC has a market cap of $49.96B with a beta of 1.02. EMC remains a great long-term buy for its attractive cash flow despite the short-term pullback.

On March 11, 2013, Longbow Research initiated coverage on EMC with a buy rating and a target price of $30.00. Analysts currently have a mean target price of $29.47 and a median target price of $30.00, suggesting 24.14%-26.37% upside potential. Analysts, on average, are estimating an EPS of $0.39 with revenue of $5.42B for the current quarter ending in March, 2013. For 2013, analysts are projecting an EPS of $1.86 with revenue of $23.47B, which is 8.10% higher than 2012.

Read MORE.

Nokia And Sprint: Great Potential For Turnaround [Seeking Alpha]

Nokia Corporation (NOK) and Sprint Nextel Corporation (S) are two telecom related companies that had been under-stressed in the past few years. Sprint had been gaining positive momentum with its announcement of SoftBank and Clearwire deal. However, despite Lumia’s positive feedback, NOK continued to decline in the past two months. Both companies have great potential for strong turnarounds and will be analyzed fundamentally and technically in this article. Investing strategies will also be presented.

Nokia Corporation

NOK was down 2.10% and closed at $3.26 on March 25, 2013. NOK had been trading in the range of $1.63-$5.57 in the past 52 weeks. NOK has a market cap of $12.21B with a beta of 1.58. Despite the positive feedback for Lumia phones, NOK’s share price continues to decline in the past 2 months. Investors need to watch closely for the short-term technical supports before establishing the long-term position.

On February 27, 2013, Argus upgraded NOK from hold to buy with a $6 price target. Analysts currently have a mean target price of $3.69 and a median target price of $3.13 for NOK. Analysts, on average, are estimating an EPS of -$0.05 with revenue of $8.70B for the current quarter ending in March, 2013. For 2013, analysts are projecting an EPS of $0.06 with revenue of $38.36B, which is 3.30% lower than 2012. However, for 2014, analysts are predicting an EPS of $0.15 with revenue of $38.52B, which is 0.40% higher than 2013.

In early March, IDC had forecasted global smartphone shipments to total 918.6 million units in 2013. The total is an increase of 29 percent when compared to a year ago, but has slowed from last year’s annual growth rate of 44 percent. Emerging markets will be the key areas for expansion, which including India, Brazil, and China (account for 33 percent of all smartphone shipments in 2013). NOK’s share price had been declining since mid-January and Stoxx Ltd. had recently stated that NOK, the Finland-based company, will be removed from the Euro Stoxx 50 index.

Read MORE.