Stock And Option – Intraday Comments For Nov 01 2012 CAT, AAPL, LOW, WMT, NUE, HD

Finally a bounce. About time too, don’t you think. There are a number of reasons for the bounce being quoted by analysts but I believe a lot of it was because there was no big drop yesterday and this brought a lot of investors back to the markets and today is the first day of a new month. October was poor for stocks but could have been a lot worse. We are now entering the start of what is historically the best 6 months for stocks which for investors is another reason to get in on some oversold stocks like Dupont Stock, Intel Stock and others. Whether stocks can push back through their recent highs still is questionable but stock indexes are not that low off the highs and investor enthusiasm is always a factor that is hard to take into account. My personal view is markets could easily push to another new high but to stay there and move indexes cleanly above will take a lot of earnings power from companies. So while stocks could rally and set new highs again, whether they stay there will be another thing entirely, but I cannot trade for what might happen, only what is happening. Right now the trend is back up.

Here are some of the stocks I have followed this morning.

Stock and Option – Home Depot (HD)

Yesterday I did my Put Selling trades on Home Depot per my article on those stocks which I felt would benefit from the hurricane and I will be posting those trades and the details later today.

Stock and Option – NUCOR STOCK (NUE)

I did my Put Selling trades in Nucor Stock yesterday as per my article on those stocks that could benefit from Hurricane Sandy. I will be posting those trades and the details later today.

Stock and Option – Walmart Stock (WMT)

I did my trades in Walmart Stock this morning as the stock remains weak. I wrote the trades up this morning. I had to adjust my strategy on Walmart Stock as obviously the stock is over-valued and investors are unwilling to push it much higher. That said the downside I believe is limited in Walmart Stock.

Stock and Option – Lowes Stock (LOW)

Lowes stock was another company I thought could benefit from the hurricane but I could not get the prices I wanted on the put options. Overall I have never been a big Lowes Stock fan. I prefer Home Depot which overall I think has a better corporate structure and better earnings potential. I will not be proceeding with my Put Selling against Lowes Stock. The options are not liquid enough to make it possible to get the premiums I would prefer. Instead of trading the options with other options traders I am trading with market makers and they are never going to give me the premiums I want. My asks yesterday for my Put Selling sat the entire day often with just a 2 cent spread and were still not filled.

Stock and Option – Caterpillar Stock (CAT)

I believe that caterpillar stock (CAT) will be my best trade out of the hurricane strategy. I sold puts and I bought calls. The reason is simple. Caterpillar was undervalued and ready for a bounce back. I didn’t want to commit capital to buying the stock so I felt the calls were a better trade. I will post this analysis later today as well.

Stock and Option – Apple Stock (AAPL)

The bounce in Apple Stock this morning is expected. As explained in my market direction article from last night, Apple Stock is now entering a firmer area of support. This should slow the descent of the stock and there will be lots of rally opportunities. However until Apple Stock shows more market share increases along with earnings growth, I believe this stock is better played with put and call credit strategies options or for those who follow my Shark Options Trading Strategy, the shark strategy has worked well for the entire year and so far it has not signaled to get back into Apple Stock.

Stock and Option Outlook At Noon

Market direction outlook at noon today is for the market to continue to build on this rally. I would expect some give back in the afternoon which would work well for the IWM ETF Trading For Pennies Strategy, but overall I think the rally will last more than just today. The push back by the NASDAQ is I believe key to this rally effort and I will be watching the NASDAQ market direction closely for any signs of it being unable to sustain further moves higher. That will be key to the market rally failing.

 

  • DJ

    Teddi, 73 bucks when or if broken on WMT is a break of the very last long from my day chart…similar to the INTC trades, this will likely go lower as you said. I will wait for 70 bucks to consider shorting WMT puts…I want in by Mid-Nov with Dec strikes…if 73 holds, we could sell the NOV 70’s or Dec 70’s….looking good here. THANKS.

  • A good strategy which I am working on a short article is to scale into this type of position. Walmart stock is the type that is slow to fall. It has pulled back several times but never far enough or long enough for a lot of put sellers. I scale into a position in Walmart Stock as this allows me to earn some income and if the trade works I can keep earning more income as the stock falls toward my position. I’ll explain in an article and attach a link to it here.