I am including WMT, not because it met my criteria in price change, but because of the volume change and because is a good indicator of the state of retailers in the nation. After hours, ANF was declining very strongly, as the company miss the profit targets by ¢6/share. However, it lifted projections for the coming quarters. DKS and AEOS are also strong contenders in my selection for this category. DKS missed due to poor sales in recently acquired Galyan's Trading Co. AEOS, on the other hand, exceeded expectation, but lower expectations, very slightly, for the quarters ahead. I would not trade AEOS to the downside, because there is no negative catalyst. However, I would be forced to choose between ANF and DKS.
Finally, the last candidate is DE. Deere shares closed down $8.06, or 11.1 percent. The company posted profits that dipped 3 1/2 percent from last year and issued weaker fourth-quarter and full-year earnings forecasts.
It strikes me that DKS and DE have the strongest catalyst of this group. Deer, missing the spring/summer quarter numbers becuase of a drought in the midwest, would suggest that you'd have to wait a year for recovering. DKS, bought another retailer only to find out that sales in the new units were not robust enough. Perhaps management drop the ball her.
The impact of oil on retailers may be starting to show. A bearish position in one member of this group may be a good idea.
The Elliott wave anlysis on DE is quite conclusive and it matches longer term waves on this stock.
As usual, because of the strong one day decline, it may be worth waiting for the Stochastics sell signal, once the stock price retraces 38.5% of the first day loss.
The proposed trade is this:
I will do the same evaluation on DKS tomorrow, and ad it to the present BLOG. I am still following CREE and RRGB to look for the stochastic signal on the 60 min chart. I still do NOT have any trades in the account.
2 comments:
Juan; In regard to your plan regarding possible assignment of BCRM, I want to remind you of a bad experience I had one time. You were aware of it then, but may not recall the details. I found that the assignment and selling the equivalent long calls on these calendar spreads, to cover the short calls, lost the time advantage. For example, say the August calls were $2, and we're short them, but the Jan long calls are $4 because of the time advantage. Well, if you do a spread sell and buy to cover you end up with $2 for each contract but if you let them assign you lose those $2. That's what happened to me that time, using a different broker, however. You want to check with this broker to see if the same thing would happen and if it would, you should take care of covering before assignment to take that time premium.
account holder I am reposting your comment under the appropriate blog, and answering it there. Simply click the link that says:
"Quick Update on AAPL and BRCM" at the top right corner of this page, under my photograph"
Thanks
Juan
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