Sunday, January 11, 2009

Keepin' Score (1/5/2009)

Another round of Keepin' Score, recapping last week. I would rather have had this out yesterday but assorted other tasks intruded. I'm still tweaking and adding to the scoring system I outlined in a previous post so bear with me on that count. Here we go!

MOS - I said: "A favorable reaction to news would bring a 1st (and easily hit) level of about 38 and a 2nd level in the 42 area. A lousy report could send this sliding back to the 30 area from where it began this 20% run to its current 36.86."
What happened: The 38 area was taken out even before earnings by the updraft in the market. Drift after that carried it up to a high for the week of 41.15, shy of the 42 upper level. 0 points for this... the low level was too easily taken out and it didn't get close enough to the high.

MON - I said: " will likely get some sympathy movement with MOS", "...on the upside it will see resistance around 77-78, with an outside chance of recovery to mid-December high around 84."
What happened: +0.5 for the sympathy move with MOS and that it didn't take out 77 at that point. -0.5 points since MON broke above 84 right after earnings with a big gap on a strong market day. I'm going to also give this a 0 total points even though MON did drift back down and only closed one day above 84.

BBY - I said: "...options pricing reflects the historic movement pretty well so barring some cheapening of contracts, this is probably just as well watched for potential break-out given the chart pattern rather than as an earnings play."
What happened: +0.5 point since share price never went above or below the break-even share pricing of 29.25/23.25.

FDO - I said: "FDO doesn't usually move much at earnings however so let's move on."
What happened: Even though FDO didn't get past the upper break even price of 29.16, I am only giving this +0.5 point because it moved more than I expected it to. I suppose if one were brave and/or lucky, buying calls near the low of the day before earnings might have been profitable.

APOL - I said: "...if the break-even pricing for the strangle still reflects what is shown in the sheet, it would be worth playing."
What happened: +0.5 points since a strangle based on the prices in the earnings sheet would have been profitable. But IV inflation did creep in throughout the week so depending on when one would have purchased the position would vary the profitability. One of the downfalls of a Sunday look-ahead I guess.

CVX - I said: "never really moves. Just watch crude."
What happened: CVX didn't really move. +0.5 points.

AZZ/KBH - I said: "Probably best to avoid./Another one that seems not worth the bother."
What happened: Neither one made it past break-even prices. +0.5 points there.

Total score for the week: +2.5 points
Aggregate score: +3.5 points