Daily Market Updates & Trading Signals By Option Banque

This is a discussion on Daily Market Updates & Trading Signals By Option Banque within the Daily Analysis forums, part of the Commercial category; The Gap Inc. (NYSE: GPS) is a big and well-known apparel company with a market capitalization of about $13B. Its ...

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Old Sep 15, 2015, 9:26am   #31
Joined Jul 2015
Buy The GAP Call Options Now Before It’s Too Late

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The Gap Inc. (NYSE: GPS) is a big and well-known apparel company with a market capitalization of about $13B. Its main business is designing, manufacturing, and selling apparel for men, women, and children.

Despite of the slowing revenue growth, Old Navy’s sales continue to grow fast, and in the near future, they will offset the negative growth of other brands.

During the last 52 weeks, GPS has been showing terrible results. Its stock price has decreased by circa 27%, while the Nasdaq Composite has increased by 5% (see Diagrams 2 and 3). The main causes for such results are lowering revenue growth on the one hand and the fact that company uses cash only for buybacks.

However, it looks like that the stock is worth buying, as it is a strong brand with a successful history to back it up. In fiscal 2006, the company hit a revenue ceiling of $16B and stopped growing. However, since the revenue bottom of $14.5B in fiscal 2010, Gap Inc. has shown nearly 16% growth, which can be a sign for future development.

Gap looks significantly undervalued, according to overall fundamental outlook, which is why we recommend buying the call options in the stock now.
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Old Sep 16, 2015, 9:55am   #32
Joined Jul 2015
Pound May Be A Good Choice For Call Trades

Option_Banque started this thread The British Pound was the first to capitulate against dollar strength, as an early advance stalled short from the weekly high, with the pair in a steady slide ever since reaching 1.5460.

Britain’s inflation was as expected unchanged in August, down from the 0.1% printed in July, whilst the core reading decreased to 1.0% from the previous 1.2%, also in line with market´s expectations. An upside surprise in the Retail Price index, up y 0.5% in the same month, partially limited the negative effects of the main headline.

Nevertheless, the pair fell down to the 1.5330 where it stands by the end of the day. The 1 hour chart shows that the price fell well below a now bearish 20 SMA, whilst the technical indicators are losing their bearish strength in oversold levels, rather signaling some short term consolidation ahead than a sign of downward exhaustion.

Click the image to open in full size.

In the 4 hours chart, the 20 SMA is turning lower in the 1.5420 region, whilst the Momentum indicator stands flat below the 100 level, and the RSI heads lower around 39, anticipating additional declines.

The pair has an immediate support around 1.5320, the 23.6% retracement of the latest decline, with a break below it exposing the pair to a steady decline towards the 1.5250 price zone.
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Old Sep 17, 2015, 10:24am   #33
Joined Jul 2015
Buying Long Term Call Options In V Stock Appears To Be A Wise Decision

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Visa (NYSE:V) has been a stable stock during 2015, although it had to bear the brunt of a global equity sell-off over the last couple of months. During this time, the stock declined by around 9% from its peak near July end.

Despite that, V along with MasterCard (NYSE:MA), its major global competitor, has been able to garner a relatively higher valuation compared to smaller players such as American Express (NYSE:AXP).

Looking at the future earning potential, it seems that V would lag behind MA and AXP. As of now, estimates for 2016 EPS for V, MA and AXP stand at $2.78, $3.83, and $5.76, respectively.

However, in terms of P/BV, V remains undervalued compared to MA. V’s P/BV of 6.4 is less than half of MA’s P/BV of 16.71. Another point to note here is that given the size and profile of V, only an evaluation against MA would constitute an apples-to-apples comparison.

Over the last five quarters, V has ensured a healthy quarter-end cash position of around $2 billion and ploughed back profits to the extent that on average retained earnings comprised 35% of the overall owner’s capital.

It makes sense for V to capture more customers owing to its dominating position, particularly in the credit card market. V has the unique advantage of having the best of both worlds. It has not only the highest number of acceptance points with around 36 million registered merchants but also the largest number of issued cards at around 2.9 billion. MA is the only other provider to come anywhere close to V with 36 million merchants and around 2.1 billion cards.

So considering the overall outlook, buying the long term options in Visa stock could be a good strategy.
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Old Sep 18, 2015, 10:50am   #34
Joined Jul 2015
Euro To Face Major Hurdle At 1.1500

Option_Banque started this thread The dollar sold-off with the news, with European currencies advancing the most against the greenback. The EUR/USD pair broke above 1.1400 before the Wall Street’s closing bell and maintains a strong upward tone as the hourly chart shows that the technical indicators are heading sharply higher, despite being in overbought territory, while the price has accelerated far above its moving averages.

In the 4 hours chart, the price has found intraday support in a mild bullish 20 SMA, whilst the technical indicators have finally left neutral territory, with the Momentum indicator heading higher above 100 and the RSI consolidating around 65, pointing for additional gains on a break above the mentioned high, towards the 1.1460/70 region, a major static resistance area.

Click the image to open in full size.

The US Federal Reserve maintain its rates on hold in between 0.00and 0.25% in their September meeting, with only 1 voter dissenting with such decision.

The accompanying statement was quite dovish, with officers concerned over dollar’s strength, energy prices and the global economic slowdown, as they could put further put further downward pressure on inflation in the near term, and therefore “these developments may also restrain U.S. activities somewhat.”
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Old Sep 21, 2015, 12:03pm   #35
Joined Jul 2015
EUR/Dollar To Find Major Support At 1.1258

Option_Banque started this thread The EUR/USD traded as high as 1.1459 on Friday, before turning sharply south during the American afternoon, to close the day around the 1.1300 figure.

At this point, the technical picture continues lacking clear directional strength, as daily basis, the price has retreated back towards its 20 SMA that heads slightly lower around 1.1240, whilst the Momentum indicator has turned flat above the 100 level and the RSI indicator turned south, now around 53.

Click the image to open in full size.

Nevertheless, the pair holds above its 100 and 200 SMAs, both pretty much flat and well below the current level, limiting the downside around 1.1080/1.1130. In the 4 hours chart, the price has broken below its 20 SMA, whilst the technical indicators indicate an increasing bearish potential, crossing their mid-lines towards the downside.

Dollar’s sell off posted a U-turn on Friday, with the America currency recovering a good part of its losses, particularly against its European rivals.

During the weekend, Greece went to the polls, with the first results expected around Tokyo’s opening. There are few chances of the news affecting the common currency beyond some spikes at the opening, given that no matter who wins, the economic scenario will hardly change. China will release a sentiment indicator later on in the day, with more chances of reaching a market that has been trading mostly on sentiment for already several weeks.

Also, and during the weekend, FED’s Bullard stated that he pushed against the decision to delay an interest rate increase, because the economy has more or less fulfilled policy makers’ goals, which may lead to some dollar gains at the opening, outside the EUR/USD pair.
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Old Sep 22, 2015, 10:23am   #36
Joined Jul 2015
Could GBP/CAD Break The Current Range?

Option_Banque started this thread The GBP/CAD remained confined to a tight range near its recent highs, as both currencies traded generally lower against its American rival.

The Canadian dollar was unable to find support on rising oil prices, but came under pressure under the end of the day, as BOC’s Governor Poloz said that a lower CAD is cushioning the damage from oil’s decline.

Despite not completely comfortable with the ongoing economic situation, Poloz made no references to interest rates direction.

Click the image to open in full size.

The 1 hour chart for the cross shows that trading has been quite choppy intraday, with the price moving back and forth around its 20 SMA, whilst the technical indicators remain stuck around their mid-lines. In the 4 hours chart, a mild positive tone prevails given that the technical indicators head higher for their mid-lines, and that the price develops above a bullish 20 SMA.

Nevertheless, intraday selling interest continues surging on approaches to the 2.0550/60 region, which means it will take a clear break above it to confirm a steadier advance.
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Old Sep 23, 2015, 9:08am   #37
Joined Jul 2015
USD/JPY Faces Tough Resistance At 120.30

Option_Banque started this thread The US Dollar recently traded higher against the Japanese Yen, but failed near an important confluence resistance area. There is a confluence area formed near a major bearish trend line on the hourly chart of the USDJPY pair, as the 100 and 200 simple moving averages are also positioned around it. Moreover, the 120.30 level is a pivot area acting as a hurdle for buyers. In short, it won’t be easy for buyers to take the pair higher and clear the trend line and resistance area.

Click the image to open in full size.

On the downside, there is a double bottom pattern noted around the 119.65 level. So, there are mixed signals on the hourly chart, suggesting that the pair might trade anyway moving ahead and one should trade with caution.

Earlier during the Asian session, the Chinese Caixin China Services PMI™, which is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private service sector companies was released by Markit Economics. The market was expecting an increase from the last reading of 47.3 to 47.5 in September 2015. The outcome was a negative one, as there was a decline noted to 47.0.
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Old Sep 28, 2015, 8:40am   #38
Joined Jul 2015
1.1335 Remains Key Hurdle For EUR/USD

Option_Banque started this thread The EUR/USD has shown little progress these last few days, once again, stuck around the 1.1200 level. The daily chart shows that the price has been hovering around horizontal moving averages, with the 20 SMA now around 1.1245.

In the same chart, the Momentum indicator is flat around 100 whilst the RSI is also flat right below its 50 level, in line with a neutral stance.

Click the image to open in full size.

In short term, the 4 hours chart shows that the price has managed to advance a few pips above its 20 SMA, whilst the technical indicators are bouncing from their mid-lines, with no actual momentum. The base of the range has been set at 1.1080, which means additional declines below it, are required to confirm a bearish continuation, while bulls may get encouraged only with an upward acceleration beyond 1.1335.

Choppy trading and no clear trend has been the theme surrounding the EUR/USD pair for one more week, as risk sentiment and increasing uncertainty over what’s next for both Central Banks, have kept investors beyond cautious. Nevertheless, US FED’s head, Janet Yellen, shed some light on Thursday, saying that the US is still in the way of a rate hike sometime this year. The common currency fell down to 1.1104 intra-week, but managed to close it around the 1.1200 level, which seems to have a comfort level for scared investors.

During this week, market’s attention will focus in the EU inflation and the US employment report, both expected to offer some clues on the health of these economies. However, risk-related sentiment will also have its saying on the forex board.
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Old Sep 29, 2015, 9:49am   #39
Joined Jul 2015
20 SMA Remains A Key Hurdle For GBP/CAD

Option_Banque started this thread The GBP/CAD posted a tepid advance yesterday, extending up to 2.0323 intraday, but ending the day below the 2.0300 level.

A strong decline in oil prices, as WTI fell down to end the day around $ 44.50 a barrel, kept the Canadian dollar under pressure, whilst the Pound consolidated its latest losses, helping the cross advancing.

Click the image to open in full size.

Technically, the 1 hour chart presents a limited upward potential as the price is few pips above a mild bullish 20 SMA, whilst the technical indicators aim slightly higher in positive territory.

In the 4 hours chart, however, the price remains unable to advance beyond its 20 SMA, whilst the technical indicators remain flat below their mid-lines, limiting chances of a stronger recovery.

At this point, the pair needs to advance above the 2.0345 level, the 200 EMA in this last time frame, to be able to extend its advance up to the 2.0420/40 price zone should the Pound recover its strength.
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Old Oct 1, 2015, 10:22am   #40
Joined Jul 2015
US Stocks End Worst Quarter Since 2011

Option_Banque started this thread Click the image to open in full size.

Wall Street closed in the green with the Dow Jones Industrial Average advancing 1.47% and ending the day at 16,284.70. The Nasdaq and the S&P also closed with solid intraday gains, the first helped by a bounce in the biotech sector. Nevertheless it was the worst quarter for US indexes since 2011, on fear that China’s economic slowdown would spread globally.

Technically, the daily chart shows that the technical indicators have extended their recoveries, but are still below their mid-lines, whilst the index remains below a flat 20 SMA, situation that replicates in other major indexes.

The intraday recovery stalled well below Monday’s high of 16,373, the level to break to see a more sustainable recovery.

In the 4 hours chart, the index has advanced some above a still bearish 20 SMA, whilst the technical indicators lack directional strength right above their mid-lines, and the 100 and 200 SMAs stand above the current level, all of which limits chances of a stronger advance.
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Old Oct 2, 2015, 9:28am   #41
Joined Jul 2015
AUD/USD Rallies Sharply Amid Australia’s Retail Sales News

Option_Banque started this thread Aussie Dollar after trading below 0.70 against the US Dollar recovered sharply. AUDUSD is now trading above 0.70 and following a nice bullish path on the hourly chart.

The Aussie Dollar recently suffered a lot of losses against the US Dollar, as the AUDUSD pair traded below an important support area of 0.70. However, the downside was limited as the pair found support bear 0.6940 and traded higher.

Click the image to open in full size.

The AUDUSD pair also managed to close back above the 100 and 200 hourly simple moving average, which is a positive sign. Moreover, there is a bullish trend line formed on the hourly chart, acting as a support for the pair. However, it looks like the pair might break the trend line and support area to test the 100 hourly MA, which might hold the downside.

Earlier during the Asian session, the Australian Retail Sales, which is a survey of goods sold by retailers is based on a sampling of retail stores of different types and sizes and is also considered as a major indicator was released by the Australian Bureau of Statistics. The forecast was lined up for an increase of 0.4% in sales in August 2015, compared with the last decline of 0.1%. The outcome was in line with the forecast, as the Australian Retail Sales rose 0.4%.
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Old Oct 5, 2015, 9:26am   #42
Joined Jul 2015
Nike – A Great Stock For Long Term Call Options

Option_Banque started this thread Click the image to open in full size.

Nike (NYSE:NKE) has proved to be a consistent, solid performer over an extended period of time, delivering superior investor returns.

Nike demonstrated strong growth in Q1. Nike’s revenue growth was up 5% year on year to $8.4B in the latest quarter. On a currency neutral basis, revenue increased almost 14% year on year.

Nike’s earnings per share were up 23% to $1.34. Nike’s results were driven by strong performances across all geographies, though greater China was a particular stand out, with the business up 30% year on year in that market. Central and Eastern Europe and Western Europe also displayed strong growth on a currency neutral basis, up 14% and 26% respectively.

FX impacts greatly reduced the net growth in both of these markets however. Finally North America also had strong revenue growth of 8%.

Nike is posting some really impressive growth rates in emerging markets, which look set to power the business for some time. It is fairly encouraging to see 30% growth in Greater China, with Central and Eastern Europe posting 26% growth.

In fact, emerging markets delivered organic growth rates of close to 20%. While Nike isn’t currently benefiting from the full effects of the growth, given foreign currency depreciation against the USD, my expectation is that this trend will reverse itself longer term as these emerging economies demonstrate long term GDP growth and their currencies appreciate.

Nike offers a low, sub 1% yield, but the promise of strong capital growth. So considering the overall outlook, it looks like a good opportunity for buying call options in Nike stock.
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Old Oct 6, 2015, 10:19am   #43
Joined Jul 2015
GBP/CAD Continues Record-Breaking Losing Streak

Option_Banque started this thread The GBP/CAD extended its decline on Monday, amid a steady weakness in the British Pound, and a recovery in oil prices that fueled the CAD. US oil prices recovered above $46.00 a barrel, fueled by a rally in US gasoline prices, up 3% on the day.

The cross fell down to 1.9809 and trades a couple of pips above it by the end of the day, maintaining a strong bearish tone in the short term, as the 1 hour chart shows that the price accelerated below a strongly bearish 20 SMA, whilst the technical indicators have lost their bearish strength, but hold near oversold levels.

Click the image to open in full size.

In the 4 hours chart, the 20 SMA has extended its decline down to the 2.0000 figure, the Momentum indicator heads lower below the 100 level, whilst the RSI indicator holds around 22, far from suggesting an upcoming upward corrective movement.

Should the price extend further below 1.9800, the chances are of a continued decline towards 1.9720, en route to fill a weekly opening gap from early July at 1.9625.
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Old Oct 7, 2015, 10:56am   #44
Joined Jul 2015
Dow Finally Halts Winning Streak Amid Poor Trade Balance Figure

Option_Banque started this thread US stocks lost their shine on Tuesday, with the DJIA closing up 13 points at 16,790.19, but the Nasdaq and the S&P ending the day in the red.

Stocks seesawed during most of the day, as investors wait for the third quarter earnings reports, whilst taking profits out of the table after the latest rallies.

Poor trade balance figures, also weighed over investors’ sentiment, as despite the reading was in line with an on-hold FED, it also signals an increasing potential of an economic slowdown.

Click the image to open in full size.

The DJIA daily chart shows that the index remains well above a flat 20 SMA, while the technical indicators have lost their bullish strength and now consolidate well above their mid-lines, far from suggesting a downward move.

In the 4 hours chart, the 20 SMA has extended its advance above the 100 and 200 SMAs, and heads higher around 16,540, while the technical indicators have turned lower from near overbought levels. A decline below 16,676 the daily low, should open doors for a steadier decline, down to the mentioned 16,540 region.
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Old Oct 8, 2015, 10:41am   #45
Joined Jul 2015
Buy Netflix Call Options Before Earnings Report

Option_Banque started this thread Click the image to open in full size.

Netflix (NASDAQ:NFLX) is set to announce 3Q15 results after the market closes, Wednesday, October 14.

The earnings report is quite crucial, as it comes amid several new expansion initiatives and changing macroeconomic conditions, including multiple international market launches, intense competition from Amazon (NASDAQ:AMZN) Prime and Hulu globally, emerging market weakness, global currency devaluation, and a strategic shift in company focus to exclusive content.

We believe current trends indicate strong domestic and international paid subs growth, which will drive a revenue beat despite FX headwinds and Japan pricing weighing on international monthly ARPU.

Analysts are looking for $1.75 billion in revenue for the quarter. This estimate is an accurate gauge for Netflix’s performance in the quarter. As per analysts, Netflix will beat that number by roughly $11 million.

So considering the overall outlook, buying the call options for Netflix stocks appears to be a good strategy in short to medium term.
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