VOL
A smart 4%+ move today on heavy volume. 4X the norm
Every other stock in my universe is showing low volumes. Hell, MRVL had <2M shares traded and their average daily is 6M+.
JLG had strong volume today
So did BGC & CTRN.
Stocks I feel good about: SNDK, CSH, GHL
If you are going to buy a stock, consider a short term call. A lot of stocks will move up shortly as sanity returns to the market and attention turns to the earnings. Buy on the rumor, sell on the fact.
I have calls on JLG, ESV, TRID, and TIE. I bought out ~4 months. My JLG and ESV are doing well. TRID is still in the doghouse and TIE is just being dull.
In this case, I am betting that the underselling will reverse. The JLG $22.50 jan '07 calls went for $1.70 when I bought. I was counting on a reversal of at least a few dollars, so I figured $20 in the near term and $25 potentially in a month or two (remember that it was at $32 recently). In any case, the calls are now $2.15 or almost 30% gain in less than 2 weeks. If the stock decides to return to normalcy, I could be getting a fat $5 for the call in a month, or almost 200% profit.
I think that the calls to buy are in oversold stocks like JLG, ESV, or GRP. Especially GRP - look at the billions Anadarko threw into buying drilling companies. Drilling is the place to be and they need GRP's equipment. They hit a higher low than the last bust in March when they dropped like a rock to $36. This time they bottomed at $40. If they move again to a higher high, they will beat $54. At $45 price, they have a 15 P/E. Analysts give it a target price of $63. The variance in this quarter's earning sestimate is massive: from $0.66 to $0.96 or 50%.
Let's talk upside fantasies. What if they return to $55 in the next 2 months based on incredible results. Oct $50 calls are $2.50. That's 100% return. If they return to the cycle they've been doing for several quarters, $60 or $65 is possible.
When stocks get oversold because of market conditions and not stock fundamentals, it's always worth considering calls. In this case, sentiment looks to be turning or at least prices are reversing a bit. Even a 5% reversal is an option dream.
If you feel nervous about the Fed's impact, wait a few days. This is where th emoney gets made and lost: if you buy calls now and the market likes the Fed's direction, that 3% one day jump in stock price can translate into a 20%+ increase in your option's value. (GRP would jump ~$1.50 and the call might move $0.50). On the other hand, it can lead to a big loss if the market reacts badly. That's why i go out a few months - I hedge that nearer term nervousness by extending time. I could buy the July $50s for $0.40 and, if GRP goes to $50, maybe I see a 100% gain. Or more.
But I prefer not to be that risky.
Every other stock in my universe is showing low volumes. Hell, MRVL had <2M shares traded and their average daily is 6M+.
JLG had strong volume today
So did BGC & CTRN.
Stocks I feel good about: SNDK, CSH, GHL
If you are going to buy a stock, consider a short term call. A lot of stocks will move up shortly as sanity returns to the market and attention turns to the earnings. Buy on the rumor, sell on the fact.
I have calls on JLG, ESV, TRID, and TIE. I bought out ~4 months. My JLG and ESV are doing well. TRID is still in the doghouse and TIE is just being dull.
In this case, I am betting that the underselling will reverse. The JLG $22.50 jan '07 calls went for $1.70 when I bought. I was counting on a reversal of at least a few dollars, so I figured $20 in the near term and $25 potentially in a month or two (remember that it was at $32 recently). In any case, the calls are now $2.15 or almost 30% gain in less than 2 weeks. If the stock decides to return to normalcy, I could be getting a fat $5 for the call in a month, or almost 200% profit.
I think that the calls to buy are in oversold stocks like JLG, ESV, or GRP. Especially GRP - look at the billions Anadarko threw into buying drilling companies. Drilling is the place to be and they need GRP's equipment. They hit a higher low than the last bust in March when they dropped like a rock to $36. This time they bottomed at $40. If they move again to a higher high, they will beat $54. At $45 price, they have a 15 P/E. Analysts give it a target price of $63. The variance in this quarter's earning sestimate is massive: from $0.66 to $0.96 or 50%.
Let's talk upside fantasies. What if they return to $55 in the next 2 months based on incredible results. Oct $50 calls are $2.50. That's 100% return. If they return to the cycle they've been doing for several quarters, $60 or $65 is possible.
When stocks get oversold because of market conditions and not stock fundamentals, it's always worth considering calls. In this case, sentiment looks to be turning or at least prices are reversing a bit. Even a 5% reversal is an option dream.
If you feel nervous about the Fed's impact, wait a few days. This is where th emoney gets made and lost: if you buy calls now and the market likes the Fed's direction, that 3% one day jump in stock price can translate into a 20%+ increase in your option's value. (GRP would jump ~$1.50 and the call might move $0.50). On the other hand, it can lead to a big loss if the market reacts badly. That's why i go out a few months - I hedge that nearer term nervousness by extending time. I could buy the July $50s for $0.40 and, if GRP goes to $50, maybe I see a 100% gain. Or more.
But I prefer not to be that risky.
posted by Andrew at
9:47 PM
2 Comments:
AS a good oil equipment play, what do you think about NSS??
NSS makes welded tubular steel pipes for transporting oil and gas. They look fairly valued. Recent consolidation in this area make them look appealing.
I don't think that there is massive growth for them. Most growth is overseas. In the US, wells are being drilled and they need to be connected, but the bulk of the US infrastructure is already set up. Connecting another few wells requires less piping than a new infrastructure.
When it comes to infrastructure, I am leaning more towards the drilling and exploration and away from transport. That's why I prefer GRP - drlling wells requires drillbits and they have an international presence - and TTI.
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