Skip to main content

Tech and Protection

Looking ahead into the next earnings report, we have seen some mixed messages in the market. On the long side, the sector to think about is clearly tech. I like Tech right now over the other sectors because they have a more heavy cash balance which will help them continue to innovate and consolidate. Some names to think about are MSFT and INTC, being a semiconductor lead rally. AMZN and AAPL are some good ones too. Mixed in with all of this market data is also a rise in volatility levels in the broader market which has the potential for elevated levels of movement over the next 30 days, so you may want to buy put protection in the S&P 500 against a portfolio of tech names.

Comments

Post a Comment

Popular posts from this blog

Morning Update

Yesterday JC Penny reported what some are calling “The Worst Quarter in the History of Retail.” The company reported a quarterly loss of $2.51 per shares and that revenue dropped 24.8%. Revenue at stores open for at least a year fell 31.7% and customer traffic dropped 17% last quarter following a 10% decrease in third quarter. Not surprisingly these dismal numbers spurred option traders to make some large bearish bets on the stock. The biggest was the purchase of 30,000 May 16 puts for $1.57 with the stock at 17.50. This trade will be profitable if JCP is below 14.43, 17.5% lower, by May expiration. One of the biggest concerns investors should have in JC Penny’s cash supply. In November they told investors that they would end the year with $1 billion in cash, but ended up with only $930 million. Wednesday they then told investors that they had delayed $85 million in payments to their suppliers until the early part of the first quarter. This is another red flag that the company is run...
Post a Comment
Read more