SPY chopped around most of the day staying in a roughly .30 range for the most part before breaking out to highs of the day in the late afternoon session before selling off a bit for an overall unchanged day. QQQ did roughly the same, while the IWM closed right near session highs with a big green candle to end the day. While the VIX closed right at session lows to end the day. Overall, a bullish close in my opinion. But becoming a choppy tape.
Options Activity-
Equity Put/Call ratio- .56
Index Put/Call ratio- 1.39
Equity call volume- 824,905
Equity Put Volume- 465,420
Economic Data:
- Treasury Budget at 2:00 P.M.
Options Corner
MSFT is interesting here as it put in a very strong day today and took back the 10 day moving average. 13,000 Feb 28 calls were traded today and is certainly a very inexpensive way to play this name and a possible break out to the 200 day. I entered this trade today at .12 and calls are now trading at .15, but still a very cheap way to play this name. One that could move on a positive CSCO report. CSCO is also a name that has been a target of bulls and today they took aim at the Feb 21.50 calls, earnings are on 2/13/13.
ORCL is interesting here after taking a breather and pulling back, albeit a bit further than most would like as it has lost its 10 and 20 day, but certainly a decent bounce candidate and one to watch as it could make a run back towards 52 week highs. Today saw bullish activity in the April 35 calls I entered this one as well at 1.19, and calls are trading at 1.32 now, but still a great way to play a name that has been very strong and should perform well in the coming months. Going out to April gives many options as well and the one I will be looking to do, is selling front week premium against my spreads.
FFIV shares are beginning to roll over here and RSI has already rolled over, while MACD is crossing bearish, and also has the small earnings gap, which seems likely to get filled. Today saw a trader paying about $6 for 1,000 April 105 puts, $600,000 in put premium a pretty significant position. It is certainly an interesting position and one to keep in mind and one to possibly play if looking for a short position. A March 100-95 put spread and trades at about 1.25 could be a better way to position for this move.
Shares of NOC have held trend support and put in a higher low, while taking back the 10-day and moving towards the 20 day RSI is moving and looking to leap above 50, while at the same time MACD is setting up for a bullish cross. Today we say 4,000 March 67.50 calls bought add that to 4000 in OI at the March 65 strike and over 10,000 now in OI at the march 70 strike, while what appeared to be some put selling in May, and you really have a bullish scenario here.
Shares of SYK pulled back and held the 20 day and last week regained momentum and took back the 10-day, and now look set to make a break out to new 52 week highs. Today saw over 2,000 March 65 calls bought.
COST had been a set-up I had been watching for a while now waiting for that 104 break, but it never happened, but shares have pulled back here breaking the 10 day and closing right on the 20 day. Today saw some interesting action out in July calls deep in the money the most bullish of positioning with 800 July 93 calls 1500 July 98 calls & 900 July 100 calls. July is going out too far for me, but if you were interested in a stock replacement I would certainly say the July 93 calls are attractive and using a covered call strategy writing front month premium or overwriting is a good way to play this. I am more interested in a shorter time frame and with this pull back I feel like there is now more ways to play this one could look to play an overshoot of the 20 day and making a buy at or near the 50 day around 100 or play the break out above 104.
Large Caps-
WRPT is interesting here after making a series of higher lows, and putting in a strong day today, I like how this one set ups through today's highs for a move higher up to the 200 day and possibly beyond.
YHOO sets up well here and earnings pull back has been bought very quickly RSI is moving MACD crossed bullish and this one looks great through today's highs.
Small Caps-
AXL looks very strong here after a long ride on the 10 days shares broke free today and RSI is moving MACD is bullish, & shares have been under accumulation there is not much here not to like. Looks to me like 12.70 then 12.94 and then off to new highs I think this one has gas.
ELY this is a weekly view as shares broke out on the daily, but stopped perfectly on some resistance into the weekly I like this one on a break above 7.25.
GTIV shares broke out of this trend resistance today and RSI is moving with a bullish MACD this one can run with 10.97, 11.21, 11.79, 11.95 & then 12.60 all reasonable targets here.
MU shares are flagging and put in a strong day today, I mentioned over the weekend the notable call buying in this weeks 8 calls, and I received some hate mail on stocktwits from a guy that seemed to be losing long and short in this name and seemed very confused. This one looks good on an $8 break.
OVTI with AAPL catching a bid so are its suppliers and OVTI sets up well here looking for that 16.03 break.
Earnings-
BWLD has missed wall street estimates the past 2 quarters and has beat 2 of the prior 4 quarters. Wall Street is looking for .95 in the current quarter. Four quarter max move is 17%, and average move past four quarters is 11.8%. Options are pricing in about a 10% roughly in line with past for quarters average move. Feb open interest is about 2 to 1 calls/puts and nothing notable today. March 75 puts were active today with 1400 trading, and need to confirm OI change tomorrow.
On the chart BWLD has been range bound but trending up and has failed to make much progress in filling the prior earnings gap always a worrisome sign, but for the most part the chart does not matter much except for levels coming into earnings. Resistance is at 79.31 the 200 day moving average and has the gap fill into the 82 area. While support comes in at the 72.50 level and 69.80 below that and 68.70 area below that.
Trade Ideas:
Feb 80-85-90 call fly for 1.65
Feb 75-70-65 put fly for 1.00
Feb/March 85 call calender spread at .40
Feb/March 70 put calender spread at .60
Sell the Feb 85-90 call spread & 70-65 put spread for credit of 1.35
Nile has missed Wall Street estimates 2 of the last 4 quarters, while beating the prior two. NILE 4 quarter max move of 32.5% and average 4 quarter move of 12.3% affected largely by a no reaction to report in November, but taking that away gives an average move of 16.4%. The options market is pricing in a 12.8% earnings reaction largely in line with prior reports.
On the chart NILE looks pretty bad and looks set to fill a prior earnings gap that needs filling, which would take shares all the way down to the 26 level roughly in line with the expected earnings move. Up above you find resistance at 34.67, 40.25-40.54 and at 43.
Trade Ideas:
Feb 30-25 put spread at 1.25
Feb 30-35 call spread at 2.00
Feb 35-40 call spread at .50
Feb/March 25 put calender spread at .20
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Trades Today:
RAX +$1.20
NOC +$.02
RTN -$.03
Solid day for a dull day in the markets.
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