Brent Archer
Virginia, US - http://www.investorsobserver.com
Brent Archer is an options analyst and writer at Investors Observer.
InterContinental Exchange (ICE) falls on new proposed exchange regulations
InterContinental Exchange (NYSE: ICE) shares are falling today after the company released a statement in response to Congressional proposals to modify the operation of regulated global energy exchanges. The company called the proposals arbitrary controls that would adversely affect consumers, market prices, and the competitiveness of the U.S. markets. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on ICE.After hitting a one-year high of $194.92 in December, the stock hit a one-year low of $110.25 in March. This morning, ICE opened at $159.37. So far today the stock has hit a low of $156.07 and a high of $159.90. As of 12:00, ICE is trading at $156.57, down $3.15 (-2.0%). The chart for ICE looks bullish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.
For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $200 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in four and a half months as long as ICE is below $200 at September expiration. ICE would have to rise by more than 24% before we would start to lose money. Learn more about this type of trade here.
ICE hasn't been above $195 at all in the past year and has shown resistance around $167 recently. This trade could be risky if the company's earnings (due out in late July) are a positive surprise, but even if that happens, this position could be protected by resistance ICE might find around $195, where it topped out back in January.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in ICE.
NVIDIA (NVDA) soars after earnings, upgrdaes
NVIDIA (NASDAQ: NVDA) shares are trading higher today after the company reported a first-quarter profit of $176.8 million, or 30 cents per share. Although the adjusted profit of 36 cents per share missed analyst estimates of 38 cents per share, a few analysts upgraded NVDA saying margin growth and new products should improve NVDA's prospects through the year. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NVDA.After hitting a one-year high of $39.67 in October, the stock hit a one-year low of $17.31 in March. NVDA opened this morning at $22.01. So far today the stock has hit a low of $21.97 and a high of $23.39. As of 12:00, NVDA is trading at $23.38, up 1.43 (6.5%). The chart for NVDA looks bullish but deteriorating slightly, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $17.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 9.9% return in just five and a half months as long as NVDA is above $17.50 at September expiration. NVIDIA would have to fall by more than 25% before we would start to lose money. Learn more about this type of trade here.
NVDA hasn't been below $17.50 by more than a few cents at all in the past year and has shown support around $22 recently. This trade could be risky if the company's next earnings (due out in mid-August) disappoint, but even if that happens, this position could be protected by the support the stock might find from its 50-day moving average, which is currently around $20.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in NVDA.
ExxonMobil (XOM) slips on possible power struggle
Exxon Mobil (NYSE: XOM) shares are falling today even though crude oil prices continue to make record highs as proponents of separating the chief executive and chairman roles at the company announced they will take their case to institutional investors and proxy voters. The group of dissidents includes descendants of John D. Rockefeller, the founder of Exxon's corporate ancestor Standard Oil.. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on XOM.After hitting a one-year high of $95.27 in October, the stock hit a one-year low of $77.55 in January. This morning, XOM opened at $89.37. So far today the stock has hit a low of $87.97 and a high of $89.59. As of 11:45, XOM is trading at $88.65, down 0.72 (-0.8%). The chart for XOM looks bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $100 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.0% return in ten weeks as long as XOM is below $100 at July expiration. Exxon would have to rise by more than 13% before we would start to lose money. Learn more about this type of trade here.
XOM hasn't been above $96 at all in the past year and has shown resistance around $95 recently. This trade could be risky if crude oil prices continue to skyrocket, but even if that happens, this position could be protected by resistance XOM might find at $95, where it has topped out four times in the past year.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in XOM.
Lehman Brothers (LEH) falls on SEC testimony to Congress
Lehman Brothers (NYSE: LEH) shares are falling today as an SEC official has warned that future investment banks that get into trouble may not get the same bailout that Bear Stearns (NYSE: BSC) did. Director of Trading and Markets at the SEC Eric Sirri told the House Investment and Insurance Subcommittee that the liquidity help given to BSC may not necessarily be repeated if another bank has trouble. These words have dragged down LEH in trading yesterday afternoon and so far today. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on LEH.After hitting a one-year high of $82.05 in June, the stock hit a one-year low of $20.25 in March. This morning, LEH opened at $44.19. So far today the stock has hit a low of $41.67 and a high of $44.19. As of 12:40, LEH is trading at $42.67, down 0.97 (-2.2%). The chart for LEH looks neutral and improving, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.
For a bearish hedged play on this stock, I would consider a June bear-call credit spread above the $50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 14.2% return in six weeks as long as LEH is below $50 at June expiration. LEH would have to rise by more than 17% before we would start to lose money. Learn more about this type of trade here.
LEH hasn't been above $50 since mid-February and has shown resistance around $47 recently. This trade could be risky if the company's earnings (due out in mid-June) are a positive surprise, but even if that happens, this position could be protected by resistance HSY might find from its 50-day moving average, which is currently around $45.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in LEH or BSC.
General Mills (GIS) rises on upgrade
General Mills (NYSE: GIS) shares are trading higher after Goldman Sachs upgraded the stock to "Buy" from "Neutral," citing healthy earnings growth. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on GIS.After hitting a one-year low of $51.00 in January, the stock hit a one-year high of $62.50 last month. GIS opened this morning at $61.48. So far today the stock has hit a low of $61.33 and a high of $62.00. As of 12:54, GIS is trading at $61.58, up 0.68 (1.12%). The chart for GIS looks bullish but deteriorating slightly, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a July bull-put credit spread below the $55 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 6.4% return in just 6 weeks as long as GIS is above $55 at July expiration. Evergreen would have to fall by more than 10% before we would start to lose money. Learn more about this type of trade here.
GIS hasn't been below $55 by more than a few cents since February and has shown support around $60 recently. This trade could be risky if an economic recovery causes investors to rotate out of defensive stocks, but even if that happens, this position could be protected by the support the stock might find at its 200-day moving average, which is currently around $57.50.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in GIS.
Google (GOOG) lifted by analyst's comments
Google (NASDAQ: GOOG) shares are trading higher today as GOOG is holding its annual shareholders meeting today. In an AP article previewing the conference, an analyst at Canaccord Adams praised the company, saying, "If you want to invest in the Internet space, where else do you want to be but Google?" If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on GOOG.After hitting a one-year high of $747.24 in November, the stock hit a one-year low of $412.11 in March. GOOG opened this morning at $586.20. So far today the stock has hit a low of $582.05 and a high of $589.30. As of 12:20, GOOG is trading at $585.23, up 6.23 (1.1%). The chart for GOOG looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a May bull-put credit spread below the $540 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in just one week as long as GOOG is above $540 at May expiration next Friday. Google would have to fall by more than 7% before we would start to lose money. Learn more about this type of trade here.
GOOG hasn't been below $540 since rising sharply in April and has shown support around $579 recently. This trade could be risky if the economy continues to weaken and the stock reverses course, but even if that happens, this position could be protected by the support the stock might find around $540, where it found some support after its initial climb after its last earnings release.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in GOOG.
Verizon (VZ) slips on Sprint-Clearwire deal
Verizon Communications (NYSE: VZ) shares are falling after competitor Sprint Nextel (NYSE: S) announced it will collaborate with Clearwire (NASDAQ: CLWR) to form a $14.55 billion communications company. The new company will be named Clearwire, and will establish a mobile network based on the emerging WiMAX standard, which VZ has declined to adopt. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on VZ.After hitting a one-year high of $46.24 in October, the stock hit a one-year low of $33.00 in March. This morning, VZ opened at $38.47. So far today the stock has hit a low of $38.09 and a high of $38.72. As of 12:10, VZ is trading at $38.67, down $0.22 (-0.6%). The chart for VZlooks bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $42.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in ten weeks as long as VZ is below $42.50 at July expiration. Verizon would have to rise by more than 9% before we would start to lose money. Learn more about this type of trade here.
Continue reading Verizon (VZ) slips on Sprint-Clearwire deal
BP falls on gasoline inventory report
British Petroleum (NYSE: BP) shares are falling today after the US Energy Department reported that domestic gasoline inventories rose unexpectedly last week and crude-oil stockpiles gained more than expected. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on BP.
After hitting a one-year high of $79.77 in November, the stock hit a one-year low of $57.85 in January. This morning, BP opened at $72.73. So far today the stock has hit a low of $72.17 and a high of $72.82. As of 12:00, BP is trading at $72.30, down $0.54 (-0.7%). The chart for BP looks bullish and steady, while S&P gives the stock its highest 5 Stars (out of 5) strong buy rating.
For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $80 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 6.4% return in two and a half months as long as BP is below $80 at July expiration. BP would have to rise by more than 10% before we would start to lose money. Learn more about this type of trade here.
Continue reading BP falls on gasoline inventory report
Disney (DIS) shares jump on strong Q2 earnings
Walt Disney Co. (NYSE: DIS) shares are trading about $1 higher after the company reported a second-quarter profit of $1.13 billion or $0.58 per share, beating analysts' estimates of $0.51 per share. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on DIS.
After hitting a one-year high of $36.79 last May, the stock hit a one-year low of $26.30 in January. DIS opened this morning at $34.21. So far today the stock has hit a low of $34.05 and a high of $34.95. As of 11:45, DIS is trading at $34.92, up $1.19 (3.5%). The chart for DIS looks neutral and deteriorating slightly, while S&P gives the stock its highest 5 Stars (out of 5) strong buy rating.
For a bullish hedged play on this stock, I would consider a July bull-put credit spread below the $30 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just two and a half months as long as DIS is above $30 at July expiration. Disney would have to fall by more than 14% before we would start to lose money. Learn more about this type of trade here.
Continue reading Disney (DIS) shares jump on strong Q2 earnings
Chicago Mercantile Exchange (CME) falls on NYX earnings
CME Group (NYSE: CME) shares are falling after competitor NYSE Euronext (NYSE: NYX) reported a first-quarter profit above analysts' estimates. CME's earnings that disappointed investors two weeks ago look even worse in light of NYX's good results this morning. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on CME.
After hitting a one-year high of $714.48 in December, the stock hit a one-year low of $399.01 in March. This morning, CME opened at $487.00. So far today the stock has hit a low of $476.27 and a high of $487.65. As of 12:40, CME is trading at $481.03, down $8.32 (-1.7%). The chart for CME looks neutral but improving, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bearish hedged play on this stock, I would consider a June bear-call credit spread above the $550 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 9.9% return in six and a half weeks as long as CME is below $550 at June expiration. CME would have to rise by more than 14% before we would start to lose money. Learn more about this type of trade here.
Continue reading Chicago Mercantile Exchange (CME) falls on NYX earnings
Burger King (BKC) drops on stock offering
Burger King Holdings (NYSE: BKC) shares are falling after the company announced private-equity companies will offer 15 million shares of its stock. The selling stockholders currently own 58 million shares, representing 43% of outstanding shares, so this 15M share offering represents another 11% of the company and the extra supply should keep BKC's price lower for a period. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on BKC.
After hitting a one-year high of $29.19 in December, the stock hit a one-year low of $21.60 in January. This morning, BKC opened at $27.36. So far today the stock has hit a low of $27.35 and a high of $27.94. As of 12:30, BKC is trading at $27.73, down $0.73 (-2.6%). The chart for BKC looks bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bearish hedged play on this stock, I would consider a June bear-call credit spread above the $30 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 7.5% return in six and a half weeks as long as BKC is below $30 at June expiration. Burger King would have to rise by more than 8% before we would start to lose money. Learn more about this type of trade here.
Continue reading Burger King (BKC) drops on stock offering
Hewlett Packard (HPQ) dips on battery supply problems
Hewlett Packard (NYSE: HPQ) shares opened in the red by more than 1% today, but have been regaining ground after laptop maker Compal Electronics Inc. lowered its shipment growth forecast for the second quarter to 10% from its previous estimate of 13-15%. Compal supplies laptops to HPQ, and said a shortage of batteries is responsible for the revised forecast. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on HPQ.
After hitting a one-year high of $53.48 in November, the stock hit a one-year low of $39.99 in January. This morning, HPQ opened at $48.24. So far today the stock has hit a low of $47.54 and a high of $53.48. As of 12:15, HPQ is trading at $48.15, down $0.12 (-0.25%). The chart for HPQ looks bullish and deteriorating slightly, while S&P gives the stock a bullish 4 Stars (out of 5) Buy rating.
For a bearish hedged play on this stock, I would consider a May bear-call credit spread above the $50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in nine trading days as long as HPQ is below $50 at May expiration. HP would have to rise by more than 9% before we would start to lose money. Learn more about this type of trade here.
Continue reading Hewlett Packard (HPQ) dips on battery supply problems
Marvel Entertainment (MVL) promises Iron Man 2 and lifts forecast
Marvel Entertainment Inc (NYSE: MVL) shares are trading higher after the company reported a first-quarter profit of $45.2 million, or 58 cents per share, beating analysts' estimates of 43 cents per share. The company raised its estimates for full year revenues and profit. Also lifting MVL is the success that the new Iron Man movie has seen over the past weekend and the company's promise to move forward with Iron Man 2. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on MVL.After hitting a one-year low of $21.21 in August, the stock has hit a new one-year high today. MVL opened this morning at $33.00. So far today the stock has hit a low of $32.02 and a high of $33.24. As of 12:15, MVL is trading at $32.45, up $2.20 (7.3%). The chart for MVL looks bullish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.
For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $25 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 9.9% return in just four and a half months as long as MVL is above $25 at September expiration. Marvel would have to fall by more than 23% before we would start to lose money.
MVL hasn't been below $25 by more than a dollar or so in the past six months and has shown support around $28 recently. This trade could be risky if Iron Man doesn't keep its box office momentum, but even if that happens, that position could be protected by support the stock might find from its 200-day moving average, which is currently around $26.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in MVL.
Cisco (CSCO) falls on Barron's warning ahead of earnings
Cisco Systems (NASDAQ: CSCO) shares are falling after an analyst at Barron's expressed concern over CSCO's Q3 earnings (subscription required). In a column in Barron's, the analyst said that after considering disappointing earnings from competitor Sun Microsystems (NASDAQ: JAVA), he is worried that CSCO will not meet revenue growth expectations. CSCO reports Tuesday after market close. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on CSCO.After hitting a one-year high of $34.24 in November, the stock hit a one-year low of $21.77 in February. This morning, CSCO opened at $26.46. So far today the stock has hit a low of $26.15 and a high of $26.71. As of 12:35, CSCO is trading at $26.32, down $0.43 (-1.6%). The chart for CSCO looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $30 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.6% return in eleven weeks as long as CSCO is below $30 at July expiration. Cisco would have to rise by more than 14% before we would start to lose money.
CSCO hasn't been above $30 since November and has shown resistance around $27 recently. This trade could be risky if the company's earnings (due out tomorrow after the close) are a positive surprise, but even if that happens, this position could be protected by resistance CSCO might find at its 200 day moving average, which is currently around $28 and falling.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in CSCO or JAVA.
Altria (MO) boosts cigarette prices
Altria Group (NYSE: MO) shares are trading higher after the company announced it is cutting promotional discounts and raising prices on cigarette brands starting today. This move was made to stem losses from lower cigarette volumes. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on MO.After hitting a one-year low of $19.47 in July, the stock hit a one-year high of $24.55 in January. MO opened this morning at $20.75. So far today the stock has hit a low of $20.50 and a high of $20.86. As of 12:40, MO is trading at $20.79, up $0.36 (1.7%). The chart for MO looks bearish but improving, while S&P gives the stock its highest 5 STARS (out of 5) strong buy rating.
For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $19 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 26% return in just four and a half months as long as MO is above $19 at September expiration. Altria would have to fall by more than 8% before we would start to lose money.
MO hasn't been below $19 at all in the past year and has shown support around $20 recently. This trade could be risky if investors rotate out of historically defensive stocks, but even if that happens, this position could be protected by the support the stock might find around $20, where it bottomed out both this past week and back last fall.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither controls bullish hedged positions in MO.
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