After a tumultuous month on the whole, October came to a solid end with a very strong performance from the markets, and in effect, a good showing by many of the ideas we presented in yesterday’s report.
Take-Two Interactive Software, Inc. TTWO – First we’ll give an update on the calls we made on Tuesday morning for TTWO- the Weekly $122-125 Calls. They started moving immediately, as we mentioned in yesterday’s report, and after another session the gains have piled up even higher.
Our regular readers know that quick-strike options trading of plays that have just seen their quarterly earnings releases are among our favorite scenarios. The volatility afforded to us by these events is key to the type of opportunities we are commonly after.
This morning, we have NKE which has untraded-upon earnings reported in the post-market yesterday, and Carmax which dropped its report in the premarket today. We’ve got a set of bearish ideas for NKE and bullish ideas for KMX.
We’ll place the following targets on our watchlist today to monitor throughout the remainder of the week:
CarMax, Inc, KMX Weekly $77-79 Calls
Nike, Inc. NKE Weekly $83.50-81.50 Puts
L.B. Foster Co. FSTR
We also have a longer term idea for the FSTR chain. As you can see on the chart snapshot we’ve included below, the stock is presently exhibiting a strong multiple-bottom.
We’re going to place the FSTR 10/19 $22.50 & $25 Calls on watch in the likely event that a recovery does occur.
Our first order of business today will be to recap the fantastic single-session performance posted by our fresh options ideas for CarMax. We highlighted the KMX Weekly $75-78 Calls and were impressed with the subsequent trading activity.
Traders could have banked the following profits off of those ideas, all of which breached into multi-bag gain territory.
$75 Calls – Range: 2.00-6.54 – Max Gain: 227% $76 Calls – Range: 1.50-5.30 – Max Gain: 253% $76.50 Calls – Range: .95-4.90 – Max Gain: 416% $77 Calls – Range: .65-4.27 – Max Gain: 557% $78 Calls – Range: .40-3.30 – Max Gain: 725%
Another pick of ours that we want to return to was one we made midway through last month, in TNDM. The stock has has essentially been on one continuous bull run since that time.
From the 11.38 low it registered on the morning on our initial alert (May 16th) the stock gradually reached a new high on Friday coming in at 25.50. That’s an increase of 124% in just five weeks! We would consider that beyond respectable for a stock that was trading over eleven bucks when we first called it.
To start things off this morning, we’re immediately drawn to the most recognizable name on the premarket earnings calendar for the day. Delta has been beaten back over the past few weeks, to the point of approaching heavily oversold territory, especially as the PPS fell below the 50DMA for the first time since the second week of February. When that did occur, the stock launched into a month-long bullish pattern. All of this is plainly evident on the chart snapshot below.
With this morning’s beat on earnings as a catalyst, we’ll look for a similar pattern to emerge this time around, and begin tracking the DAL 04/13 51.50-53 Calls.
BioMarin had a really solid performance yesterday after we signaled some contracts in our premarket report, the BMRN 03/16 $80 & 85 Calls. The stock ran from 81.01 to 84.19 facilitating some modest but solid intraday moves in our contracts.
The $80 Calls ran from 4.40-6.00 for a 32% rise, and the $85′s traded from 2.70-3.50, a gain of 26%
With a strong close at 83.28, and a lot of ground to cover to recoup the losses the stock has seen in the month of February, we’ll look for BMRN to establish a more sustained recovery pattern, and we may see some further increases in these contracts, which still have over a month until expiration.
Under Armour, Inc. UAA
We want to formulate an idea for Under Armour on the heels of the company’s earnings report this morning. The stock had already begun to trend off of its bottom a few sessions ago, and despite posting a Q4 loss, sales were better than expected and the stock is gapping up pretty significantly here in the premarket.
We’re going to want to keep tabs on the UAA Weekly $15.50-16.50 Calls, which could bring us sizable gain opportunities in the day or days to come.