EMC Corp, fresh off of two more positive analyst recommendations (Bank of America and Jeffreys), has broken through $21 to $21.06, a new intra-day and 52 week high. The markets are currently mixed but it appears word on EMC’s undervalue has finally caught on. We’ll see if EMC can hold support at the $21 level when the markets close this afternoon.
Tuesday, September 25, 2007
EMC Corp Strikes Again
What a Monday!
What a Monday yesterday was. I don’t think I’ve ever had such a fantastic Monday as long as I can
remember (being only 25 limits the number of Mondays I can go back and remember!). Quick recap of yesterday’s events:
- EMC Corp (EMC) was upgraded by Bear Stearns and Citi resulting in an almost 8% jump in stock price. Normally that’s great. Seeing as how EMC was severely undervalued, I purchased 15 Oct 19 Calls at a cost basis of $1.03 per contract. Yesterday those contracts closed at $1.75, resulting in a $0.72 per contract profit. After taking a bit off the table to preserve profits, I’m left with an unrealized gain of $864. That’s an increase of 33% on my portfolio. I believe it’s safe to say I’m in the black and have a bit more wiggle room to invest and find other breakout stocks. EMC appears to be holding it’s own this morning as the markets opened lower due to a variety of reports.
- Red Hat (RHT) reports after the closing bell today. Profits are expected to rise and as a result I’ve jumped in pre-earnings. The last time I’ve jumped in pre-earnings resulting in my first loss. At the time, however, I didn’t know what a sub-prime was. It pays to be informed.
- I won a copy of The 4-hour Workweek from a contest over on Commentsforcash and SusanSuarez. As the winner, I’ll be hosting the next leg of the contest. More information will be posted later this week regarding entry rules.
Markets appear to be gaining ground this morning. I still have 12 EMC contracts open. Let’s hope for another double this week! Just remember… don’t be a pig. Better to have a profit than no profit at all!
Monday, September 24, 2007
EMC Corp Upgraded
EMC Corp (EMC) was upgraded by Bear Stearns and Citigroup this morning. As a result, shares have skyrocketed 5%, or about $1. Why is this important? The bulk of my portfolio is currently tied up in EMC contracts. If EMC can break through the $20 resistance level, I would expect another 5% or so this week as the stock takes off. It’s currently holding at $19.99 with it’s intra-day high at $20.00. EMCJT contracts are currently up 100% in today’s trading. You know you’re a stock junkie when this brings a huge rush to your Monday workday. Stay tuned.
Update: And EMC’s taken off! We’re at a new intra-day high of $20.19. Let’s see how high EMC can go this afternoon.
Update: EMC’s peaked at 20.25. I’ve gone ahead and scaled back from 15 contracts to 12, or a 20% reduction. While being up about 40% feels good, it wouldn’t feel great giving it all back if something were to go wrong. Lesson #1 in the stock market: If you have a profit, take some off the table. There’s no shame in making a smaller profit. Better to realize a gain than a loss.
Update: EMC’s hit an intra-day and 52-week high of $20.29. It has since retreated to the 20.20 level. A close above it’s 52-week high would be a blessing!
Update: Houston, we have a problem! New intra-day high of $20.49. It’s amazing what a breakout can do to a stock. The $20 resistance level is history.
Closing Bell Update: EMC Corp hit an intra-day high of $20.55 today. It appears that EMC will close in the mid $20.40 range. It’s been a great day if you were patient enough with a company such as EMC. I expect the same from other companies such as Level 3 (LVLT).
Disclosure: Currently long EMC Oct 19 Calls x 12
Portfolio Progress – Week of September 24, 2007
I’m working on a new format for my portfolio progress that will integrate well with my blog. I’d like to have a bit more in terms of disclosure as well as some graphs and tables to help visualize my portfolio and progress. If anyone has any suggestions, please let me know.
- Tuesday (9/18): The FOMC cut the federal funds and discount rates by a surprising 50 basis points. The market in turn shot up almost 200 points after the announcement with the DJIA closing out a 300+ point gain. Almost all stocks rallied as a result although I believe the effects would have been much greater had it not been for options expiration week. Lehman Brothers also came out with their earnings with a decrease in profits overall but beating expectations. LEH’s earnings report set the stage for the rest of the brokers for the week.
- Wednesday (9/19): The market was still in rally mode closing up almost 100 points from the euphoria from the FOMC rate cut.
- Thursday (9/20): Goldman Sachs came out with earnings citing an over $6 / share report, handily beating the estimated $4 / share. GS fell slightly on the news but Cramer reiterated his $300 price target for GS (although not by year’s end but in time).
Although I had turned a profit last week (and thus a special portfolio progress), I’m back in the red this week after a couple of options plays I have pending. I’m currently long Bank of America (BAC) and Level 3 (LVLT), although Level 3 appears to be in free-fall mode until it’s CFO recovers from surgery. I’m currently long EMC Oct 19 Calls with a cost basis of about $1, or $100 per contract. EMC was upgraded this morning by Bear and Citi to buys as a result of EMC’s spinoff of VMWare (VMW), which is currently trading in the mid to upper 70s.
I’ll be working on a cleaner, more colorful way of presenting my portfolio and weekly progress during the week. If I can’t get things to work out well, I’ll update my portfolio progress mid week with numbers. Good luck out there this week. Safe investing!
Saturday, September 22, 2007
Light Weekend Reading
Yom Kippur to all those celebrating this weekend. Let’s keep things light with some interesting reads on the blogosphere.
- Money Morning has an article on a $900 million dollar conspiracy involving some options plays that expired today.
- How I Save Money has a quick blurb on how the Fed has affected savings account rates as a result of the interest rate cut we saw on Tuesday.
- My Saving Place has an article regarding retirement funds. You can never start saving for retirement early enough. If the market continues on its recent strength, you may hit your goals a bit quicker!
- I’ve never heard of Freeganism and neither did the Green Panda Treehouse.
On a happy note, I won my very first contest over on Cash for Comments. Seems I get to be a part of a book signing plus I’ll receive a personal copy of The 4 Hour Workweek. A 4 hour workweek would give me a lot of time to focus on investing!
See you all tomorrow for a portfolio update!