Archive Category: Wednesday Windfalls Alerts

It’s too close to call for certain, but we should have a result close to breakeven this week … perhaps a bit above. Shares of Goodyear Tire & Rubber Company (GT) are down nearly 2%, so our $15.50-strike calls have lost about half of their value. This is our worst position this week. Shares of GlaxoSmithKline PLC (GSK) are, at last glance, up by about 0.5%. I expect we’ll exit our $42-strike calls for a small loss. Meanwhile, shares of Kinross Gold Corp. (KGC) are up yesterday and today, gaining close to 5% since our Monday afternoon entry. The value of our $5-strike call options is fluctuating too much to quote a price, but they were up by over 100% recently.

Last Thursday, stocks tanked in the morning. But after a massive afternoon rally, they closed the day higher. The bullish action continued on Friday, with a majority of stocks giving us the Friday up-day we look for. Today, the picture is mixed. Many stocks are making upward progress, but plenty have pulled back into Friday’s range. The resilience of stocks last Thursday afternoon is encouraging. It shows that bullish investors were willing to swoop in, amidst the uber-negative headlines about Russia, and “buy the dip.”

We’re looking at a solid result this week. Shares of Gilead Sciences Inc. (GILD) and Plains All American Pipeline LP (PAA) haven’t moved much, so we’ll exit with a near-breakeven “scratch” trade on these. Meanwhile, shares of Kraft Heinz Co. (KHC) surged on its estimates-beating earnings report. That 5.8% move in the underlying shares gives us a 100%-plus profit on our call options. Well done! You should be able to exit with a substantial double-digit net profit for the week.

The broader stock market has been choppy over the past three weeks. That’s not uncommon following a sharp sell-off, like the one we saw from the January 4 top to the January 24 near-term bottom. These consolidation periods typically bring heightened volatility, larger high-to-low ranges and above-average mean reversion from one day to the next. In short, this is a trader’s market … more so than an investor’s.

We have mixed results on this week’s batch of trades: a solid winner, a dud and one near breakeven. You should be able to exit with a small double-digit net profit for the week. We’ll see how things shake out on our exits, and I’ll give you the full report in your Weekly Trade Wrap video tomorrow. For now, let’s make our exits!