Markets are up a bit once again today on good bank earnings. This is our third retest of the highs and it would be important to see if gains hold by the closing bell or not. For now, we are still stuck in the high end of the trading range.
For the model portfolio, I am taking profits on CREE after getting lucky on its earnings beat. I am making 11% on this trade after less than 3 days. That's considered windfall profits for me. Looks like 11% is the lucky percentage for me as this is the same percentage gains I had on USO, APWR and TAM when I took profits on them.
From Reuters:
"LED lighting manufacturer Cree Inc. posted first-quarter earnings and revenue well above Wall Street expectations Tuesday, and forecast strong second-quarter results.
The Durham, N.C., company reported net income of $21 million, or 23 cents per share, on $169.1 million in revenue for its fiscal 2010 first quarter, ended Sept. 27. That's up from net income of $5.9 million, or 7 cents per share, on $140.4 million in revenue in the same period a year ago.
Excluding special items, Cree earned 30 cents per share in the latest quarter, up from 15 cents a year earlier.
Wall Street on average had expected the company to earn 22 cents per share on $164.5 million in revenue for the period, according to analysts polled by Thomson Reuters.
Looking ahead, Cree said it expects second-quarter earnings of $21 million to $23 million, or 20 to 22 cents per share, on revenue of $180 million to $190 million. Excluding special items, the company projects earnings of 28 cents to 30 cents per share for the quarter, which ends Dec. 27.
Analysts, on average, predict quarterly profit of 23 cents per share on revenue of $173.2 million."
Today I am entering long positions in ARO and BX. ARO is a range trade opportunity... though the reward:risk is not too good at about $1.5:$1, I'm attracted to the flattening of the MACD which shows signs of accumulation. Let's see if it's strong enough to break through the range highs.
For BX, I was kicking myself for missing the first move after I wrote a couple of bullish articles on it. The slow stochastics is oversold... maybe I can still salvage some profits out of this with a quick trade if I get lucky.
As of posting the model portfolio is up about 0.6% for the day, at par with the market, and I am about 38% net long (no shorts). Anyways, while it's hard to second guess the market at these levels, it's important to keep an open mind. Ride the move as much as you can but remember your stops!
