Success with MTN

Mtn did what I expected it to do. We waited until the upgrades and the sparkling news about purchasing another mountain lost its shine and people then came back to earth especially when MTN reported so so earnings. The stock wandered right back down toward the close of the day on earnings.
I got out near the end of the day, but I expect MTN to probably wander down even further on Thursday. I realized a 45% gain on MTN.
Most people would be happy for a 15% gain on their money for the YEAR. With how I invest, these types of numbers are common for a week or two of work.

Stay tuned for more pics and happy trading....I will also continue my how to trade series with part 3.

Mark

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Stock to watch for Monday- AA

On Monday we are going to watch Alcoa Inc. AA.
All its headlines were rosy until Sept. 15th when it announced this:

NEW YORK (TheStreet) -- Shares of Alcoa  (AA_) fell in morning trading Tuesday after the world's third-largest aluminum producer announced a public offering of 25 million depositary shares to help fund its acquisition of Firth Rixson.

The offering could reach 28.75 million depositary shares if underwriters exercise their full overallotment option of 3.75 million shares. Each depositary share represents a one-tenth interest in a share of Alcoa's Class B Mandatory Convertible Preferred Stock, Series 1, par value $1 a share, $500 liquidation preference per share of mandatory convertible preferred stock, equivalent to $50 per depositary share.

The stock was down 0.67% to $16.28 at 10:52 a.m.

Then it came out a day or so later that:

NEW YORK (TheStreet) -- Shares of Alcoa  (AA_) rose 0.48% to $16.24 in morning tradingWednesday after Morgan Stanley  (MS_) issued an "overweight" rating with an $18 price target.

"We have an Overweight rating on Alcoa because: 1) we think aluminum fundamentals have bottomed and we have entered a period of sustainable price recovery; 2) Alcoa is one of the small number of suppliers in very high-growth automotive sheet market; and 3) we expect earnings from aerospace and packaging business to improve," the firm said in a research note.

What I find interesting is otherwise, people have a very rosy outlook on this stock. An glowing review by Zacks in early sept. and a great review by the wall street journal and then this price target.

I also find this very interesting..look at this chart:

Could this be an example of people in the know knowing ahead of time that the company was going to release millions of shares? Price action suggests that it does.

Anyway, this company is going to have a good earnings announcement along with the fact that Morgan Stanley priced a target at 18 dollars makes this stock a solid buy. The insider selling of the stock that occurred during the last few days will only strengthen the need for the stock to bounce to where it should be .I would suggest the 16's October Options. If the market drops a bit at open because Asia is having some problems this weekend, fine, still buy it..it will have even more discounted option prices. If the market is going up, still puchase it and ride it up.

Good Trading,
Mark

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Outlook for the week

Hey all you 1045report heads. I noticed a spike in traffic of everyone checking out my redesigned header on my blog. Pretty cool, huh?
Lets get to it. This week we are already holding MTN puts so we are looking at what the stock will report for earnings midweek. My hope is that it was maximally stretched into overbought territory so that when the earnings elicit a "meh" the stock is going to drop.
So lets take a look at the Nasdaq QQQ upcoming.

Due to the Fed announcement on interest rates, the news trumps the technicals and also changed the technicals. Now the QQQ will continue to advance overall for both the daily and the weekly.
Meaning it is safe to invest for the next two weeks or so...while there will be some pullback days, it will continue to climb.
Come back later tonight for some picks for the week. I will do some stock analysis later tonight. The stock picks just opened up due to the fact that I foresee the Nasdaq will continue to climb so we can do the 2 week pre earnings announcement climb.

Stay tuned for more,
Mark

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MTN: going for it

Ive followed MTN's price action today and it doesnt look like there is any more available upward push barring any new news that theyve been holding back next week. The earnings report should be lackluster, so this time we bought put options slightly in the money: the October 90's. Stay tuned this weekend for the week wrapup and the weekly forecast for the QQQ and further stock pics I am looking at.

Come back tommorrow,

Mark

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Watch List 9/18- MTN

MTN is going to be a tricky horse.
It is my plan to short/ purchase puts on this stock if it seems to top out just start to wander down on Friday. If on Friday there is a sudden drop before I get it, then it is too late. If I see this stock still climbing throughout Friday, I will do nothing and observe on Monday.
This baby could bite. I am already starting to go outside my comfort level due to the fact that this stock got upgraded to strong buy via  Zack's. Usually I do not touch stocks for two weeks after an upgrade or downgrade. The strong buy could push this thing up further Friday and possibly monday. So I need to see the price action  on both Friday and Monday to see if the Zack's upgrade has already been factored in and if the stock is running out of upward steam. However, it looks like its possible to make some decent money on this stock if it has lackluster earnings. Lets take a look at its analysts estimates for its upcoming earnings report next week:

Now here are my thought processes:

1. There has been an unusual jump a few days ago with the stock based on forward news. Vail isn't going to see money from this right away. As a matter of fact, they paid a lot of cash out for this new moutain. When forward looking good news comes out like this, people tend to overreact and the stock tends to get overbought.
2. However, Zacks put out a strong buy on this stock. This causes stragglers over the course of the next few days to the next week to pile on, causing the price to keep wandering up. Thats why typically I dont deal with stocks that have been upgraded or downgraded during the previous two weeks. It kills bounces for the most part. And that is how I make my money. Contrarian bounces, trading against the crowd and having the stock bounce back to its correct valuation over the course of the next few days when the stock once again becomes correctly valued.
3. This stock is due to have a lackluster earnings report. Look at the Growth Est part of the chart above for the current quarter and compare MTN against the Industry, Sector and the S+P 500. Its lacking on all fronts. With this alone, the stock if it has been climbing incorrectly up to earnings due to a crowd momentum play, should report and the stock should then drop in value. However, it is not a really big negatige expectation, but against the rest of the industry and sector, its low.
4. However the Zacks upgrade and the good news might significantly dampen the downward drop of this stock when it reports.
5. If you look above at the last 4 quarters of earnings surprises, there has been negative surprises for the last 3 out of 4 quarters. That works in our favor. If the stock misses in negative territory, people punish the stock by selling it off.
6. So I believe what it will come down to is price action. If this thing is showing via its candlestick charts that the Zacks upgrade and the news has already been priced in, its going to waffle around the top where it is now. I would then purchase puts on it near the close of Fridays trading. If it keeps going up Friday, I would then make my final decision Monday morning, after further review of its price action.

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On 9/18 we will be watching Vail Resorts (MTN)

Vail resorts last week just bought out another resort mountain and its stock price just jumped up. However, I dont expect its earnings to be that good, I think there is going to be a drop. Especially from the high price that enthusiastic investors drove the price up by. Lets take a look:

As you can see, this was taken as very big news. What we are going to wait and see is if the growth is done being repriced into the stock. We are looking at the analysts estimates and the stock is not in most likelyhood going to have a good earnings announcement.
Plus, due to its recent climb up, this would be a good earnings play to buy puts on it. The stock is already stretched way north in price and that just makes it even more likely that any negative news such as a bad earnings report could cause it to snap back in part fairly quickly. Tommorrow should tell us what we need to know about any further upward movement.

Mark

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