MORNING UPDATE: PriceWatch Alerts for KRFT and More... for 2015-03-26 |
| MORNING UPDATE FOR MARCH 26, 2015 PriceWatch Alerts for KRFT, VISN, LL, GDP, LXK, BABA, MU, LULU, FIVE and RMD. Kraft (NASDAQ: KRFT) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $83.08 while selling the May $85.00 call will produce a new covered call with a break-even point around $81.33. At that price, this position has a target return of 4.5%. This trade will have roughly 2.1% downside protection, while still aiming for a 4.5% return in 50 days. It will lock in that return as long as Kraft is above $85.00 on 5/15/2015. For comparison purposes only, this KRFT covered call aims for an annualized return rate of 32.9%. VisionChina (NASDAQ: VISN) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $13.18 while simultaneously selling the June $12.50 call will result in a new position with a target return of 12.8%. Based on recent prices, this position will cost about $11.08, which is also the trade?s breakeven point. At that level, this covered call has 15.9% downside protection, while still providing a 12.8% return in 85 days as long as VISN is above $12.50 on 6/19/2015. For comparison purposes only, this VisionChina covered call aims for an annualized return rate of 55.0%. Lumber Liquidators (NYSE: LL) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $32.20 while selling the April $32.00 call will produce a new covered call with a break-even point around $29.75. At that price, this position has a target return of 7.6%. This trade will have roughly 7.6% downside protection, while still aiming for a 7.6% return in 22 days. It will lock in that return as long as Lumber Liquidators is above $32.00 on 4/17/2015. For comparison purposes only, this LL covered call aims for an annualized return rate of 125.4%. Goodrich Petroleum (NYSE: GDP) has been chosen by InvestorsObserver analysts as a candidate for a new covered call today. Selling the January $3.50 call while at the same time buying GDP stock for $3.42 will produce a new covered call with a target return of 31.1%. Based on recent data, this trade will cost about $2.67, which is also the covered call?s breakeven point. At that price, this covered call has 21.9% downside protection, while seeking an assigned return of 31.1% return in 295 days. If GDP is higher than $3.50 on 1/15/2016, we are assured that simple return. For comparison purposes only, that equates to an annualized return rate of 38.5%. (To avoid having your profit margin narrowed by transaction costs, consider making this trade with multiple contracts.) Lexmark (NYSE: LXK) has been selected by InvestorsObserver analysts as a stock that is a strong candidate for a new covered call today. Selling the July $43.00 call while simultaneously buying LXK stock for $43.43 will result in a new position with a break-even point around $40.53. At that price, this position has a target return of 6.1%. This trade has 6.7% downside protection, while still providing a 6.1% return in 113 days as long as LXK is above $43.00 on 7/17/2015. For comparison purposes only, this Lexmark covered call targets an annualized return rate of 19.7%. Alibaba (NYSE: BABA) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $83.83 while selling the May $85.00 call will produce a new covered call with a break-even point around $80.23. At that price, this position has a target return of 5.9%. This trade will have roughly 4.3% downside protection, while still aiming for a 5.9% return in 50 days. It will lock in that return as long as Alibaba is above $85.00 on 5/15/2015. For comparison purposes only, this BABA covered call aims for an annualized return rate of 43.4%. Micron Technology (NASDAQ: MU) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $26.70 while simultaneously selling the May $27.00 call will result in a new position with a target return of 6.4%. Based on recent prices, this position will cost about $25.38, which is also the trade?s breakeven point. At that level, this covered call has 4.9% downside protection, while still providing a 6.4% return in 50 days as long as MU is above $27.00 on 5/15/2015. For comparison purposes only, this Micron Technology covered call aims for an annualized return rate of 46.6%. Lululemon Athletica (NASDAQ: LULU) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $62.00 while selling the May $62.50 call will produce a new covered call with a break-even point around $59.25. At that price, this position has a target return of 5.5%. This trade will have roughly 4.4% downside protection, while still aiming for a 5.5% return in 50 days. It will lock in that return as long as Lululemon Athletica is above $62.50 on 5/15/2015. For comparison purposes only, this LULU covered call aims for an annualized return rate of 40.0%. Five Below (NASDAQ: FIVE) has been chosen by InvestorsObserver analysts as a candidate for a new covered call today. Selling the May $35.00 call while at the same time buying FIVE stock for $34.40 will produce a new covered call with a target return of 5.7%. Based on recent data, this trade will cost about $33.10, which is also the covered call?s breakeven point. At that price, this covered call has 3.8% downside protection, while seeking an assigned return of 5.7% return in 50 days. If FIVE is higher than $35.00 on 5/15/2015, we are assured that simple return. For comparison purposes only, that equates to an annualized return rate of 41.9%. ResMed (NYSE: RMD) has been selected by InvestorsObserver analysts as a stock that is a strong candidate for a new covered call today. Selling the May $75.00 call while simultaneously buying RMD stock for $70.38 will result in a new position with a break-even point around $69.38. At that price, this position has a target return of 8.1%. This trade has 1.4% downside protection, while still providing a 8.1% return in 50 days as long as RMD is above $75.00 on 5/15/2015. For comparison purposes only, this ResMed covered call targets an annualized return rate of 59.1%. *Annualized returns are shown for comparison purposes only Are you looking for a more conservative strategy that solves the pitfalls that come with covered calls investing? Check out our RadioActive Home Study Kit (http://www.poweropt.com/psDetails.asp?pid=25)! 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NOTE: All stocks and options shown are examples only. These are not recommendations to buy or sell any security. STOCKS ON THE MOVE GoPro (GPRO), Five Below (FIVE) and Randgold Resources (GOLD) are higher in pre-market trading, while Sucampo Pharmaceuticals (SCMP), SanDisk (SNDK) and Dollar General (DG) lower. Saia (SAIA), Dr Pepper Snapple (DPS) and Con-way (CNW) were upgraded by analysts this morning while Coty (COTY), IHS (IHS), Kraft (KRFT) and Lifepoint Hospitals (LPNT) were downgraded. INTERNATIONAL MARKETS Asian markets finished mixed Thursday as Japanese stocks suffered their biggest drop in two months. The Shanghai Composite was up 0.58% while the Nikkei was down 1.39%. In Europe, markets are falling this morning following declines in US and Asian markets. The FTSE is down 1.36% while the DAX is down 1.71%. FUTURES & CURRENCIES West Texas Intermediate crude oil is up $2.20 to $51.41 while NYMEX natural gas is down $0.01 to $2.71. In metals, gold is up $16 to $1,212, silver is up $0.22 to $17.23 and platinum is up $6 to $1,166. The US Dollar is down against the Euro and the Yen. PUT/CALL RATIO Yesterday, 987,157 call contracts traded on the Chicago Board Options Exchange (CBOE) compared to 684,767 put contracts. The single-session put/call was 0.69, while the 20-day moving average is now at 0.65. TODAY'S ECONOMIC CALENDAR 08:30 AM 03/21 Initial Claims 08:30 AM 03/14 Continuing Claims 10:30 AM 03/21 Natural Gas Inventories EARNINGS EXPECTED TODAY CAG GME LULU RH This Morning Update was prepared with data and information provided by: PowerOptionsPlus.com - The Best Way To Find, Compare, Analyze, and Make Money On Option Investments - Forbes Best of the Web |
