TIE Update

TIE started an uptrend with an MACD cross on June 21,22. June 29, 30 and July 1 showed increasing price with decreasing volume. Last three days have been down with slightly bearish volume trend. MACD looks to be heading for a bearish cross. Pending debt ceiling issue remains a wild card for the market. Near term looks like TIE could continue downtrend to June 16 intraday low of $16.03. Current price (7/12) is $17.66. I bought some TIE in May at $18.20 and am considering buying more if it goes below $17. There were two large insider purchases around the $17 price level in June.

More on TIE

Yesterday (5/25/11) showed the lowest price on a down day since 4/18. Also marked 5 down days in a row with yesterday being the highest volume of the the 5 days. This suggests that as the price falls, more and more sellers are dumping shares. Yesterday was the highest volume day since 3/18. TIE did announce resumption of a quarterly dividend which should help support shares. The chart still looks like there is potential for near term decline.

TIE Technical downtrend

Titanium Metals (TIE) has shown three days of declines with increasing volume each day. This tells me that as the price declines, more and more sellers are getting rid of their shares. The price dipped below the lower Bollinger Band yesterday, so I will be looking for a turn around. The April low of 17.50 is the nearest support point followed by the March low around 17.00. The company has great fundamentals and its looking like a good entry point may be nearby.

Google Earnings Play

Yesterday (1/20/11) I bought the Google 585/590 call spread for $4.40. Google was trading around $630 at the time. Based on recent news that Google had increased market share in the search maket, general positive news around recovery in the advertising market, and Google general ability to generate huge profits I predicted an earnings beat that would suppot the stock price. Google does tend to spend heavily on hiring and investment and has hurt the stock price on previous earnings announcements. After the close, Google announced solid earnings and the stock was up in after hours trading. I will be able to sell the spread today for $4.90-$4.95 for a nice quick gain.

Aaple

I bought the Apple Inc. (AAPL) 315/320 call spread today about a half hour before market close for $4.50. On Monday, Steve Jobs announced that he was taking a medical leave from the company and the stock was his in pre-market trading and opened lower by about 5%. Apple managed to regain most of the loss by market close and was set to announce earnings after the close. My thesis is that the reaction to Steve Jobs news was probably a bit over done as the company's earnings would not be in jeopardy for at least a couple years even if Jobs were to have to remove himself from the company. Also, I figured earnings would easily beat estimates based on iPhone and iPad sales. After the close, Apple announced earnings well ahead of expectations and was trading around $345. I should be able to sell the spread for $4.90-$4.95 for a 8.9% to 10% gain before options expire on Friday.

Waiting for a Downturn

The market has been up almost non stop since September. Given the lenght and size of the upward move it would not be surprising to see a pullback in the near future. Some technical indicators have turned negative, but I would not say it is a clear signal yet. One potential catalyst for a downturn would be more problems in Europe. The latest candidate is Portugal, though fears around Portugese debt seemed to have been eased today. Primarily responsible for the easing were comments by China and Japan that they would purchase debt to be issued by a newly created European bailout fund. Also, Alcoa kicked off the quarterly earnings reports last night and any surprise earnings numbers or conference call info could drive markets near term. As a hedge agains a possible downturn I bought a February SPY (S&P 500 ETF) $122 put @ $1.03.

Ruby Tuesday

ADP employment report was positive today, turning what looked like a down day into a positive one. No trades seem to be jumping out at me today like Mosaic did yesterday. Ruby Tuesday (RT) reports earnings tonight. I'm not putting on a trade since the stock is highly volatile and I don' t have any capital available now anyway. If anything I would bet on an earnings miss/stock decline after the announcement. Darden Restaurants (DRI) was down around 6% after their earnings a couple weeks ago and has continued to slide while the market rallied. Given rising food costs and a still nervous consumer I wouldn't expect much from RT.