Stock And Option – Intraday For Nov 06 2012 – Market Rallies – MSFT, INTC, BBT

The market rally late morning is probably more about anticipating of the election results and not so much about who is going to win. Investors hate uncertainty and at the same time worry that they may miss out on the ground level of another upturn in stocks. In 2008 the market advanced on the day of the election and surprisingly, statistics shows that stocks do better under Democrats than Republicans, which seems at odds with the Republican stance of being pro-business. Looking at defense stocks today you would think Romney is going to win easily. The defense sector is at new 52 week highs today.

I think investors are hoping for a clear win today and an end to the fiscal cliff which most believe will never happen. Meanwhile many economically sensitive stocks are being pushed up by investors, like Wells Fargo and BBT Stock.

Stock and Option – BBT STOCK

BBT Stock was badly hammered just a few trading sessions ago and I believe the chance of it falling further is limited, at least until December options expiry. This morning I sold naked puts on BBT Stock at the $27 strike for .28 cents. Looking back 6 months, the stock hit a low of $27.40 last June. Already down 15% from its high earlier this fall, BBT Stock I think is pretty compelling here.

BBT Stock

BBT Stock is set up perfectly for Put Selling into December.

Stock and Option – Microsoft Stock

I am not sure what it is that analysts like about Microsoft Stock right here but I am happy to take whatever rise in the stock investors can give me. Today the stock rallied above $30.00 and my naked puts all look like they are going to expire by Nov 17.

The recovery in Microsoft Stock has been just excellent, but the volume is terrible. Today I sold my shares in Microsoft Stock for $29.90 which I had bought Oct 25 for $27.90. I don’t see this rally continuing much higher but I could be wrong. Anyway I’ll take the profit here.

Microsoft Stock - Nice recovery

Microsoft Stock - nice recovery -terrible volume

Stock and Option – Intel Stock

I’m sorry not to have been able to respond to all the Intel Stock and option emails but I am working my way through all the emails.The chart below shows yesterday’s readings at the close. There has been no real recovery just a bounce off support in the low $21 range. Intel Stock is stuck in a very narrow trading range. personally I plan to keep Put Selling each time the stock falls back to the low $21.25 to $21.40 price range. I will be picking the $20 strike most of the time as at $20 Intel Stock is definitely fairly valued.

Intel Stock

Intel Stock has seen no recovery yet but perhaps a bottom

Technically, the slow stochastic (A) is signaling that the move should be higher, but today you can see that the signal has changed to down. But yesterday the Fast Stochastic (B) showed stock direction will push back down. Neither the slow or fast stochastic indicators are oversold or overbought so while the majority of the big selling is probably over and a bottom may be in place, the upside will be limited until Intel shows some earnings that get investors excited again.

Stock and Option Summary of Intraday Comments

It should be an interesting election and I hope most will get out and vote. There is still enough economic facts to indicate that the US economy is still sluggishly growing and housing may indeed have finally bottomed. I think one of the more important indicators are the consumer sentiment ones and right now consumers seemed fairly upbeat. This means Christmas shopping could be another big push for stocks as we are now into the best 6 months of the trading year. Despite everything, the consumer still accounts for 70% of the economy and if they are in a spending mood, it can only help stocks.