XY Stocks Market For 2013, Best Stocks For 2014: June 2014

Monday, June 30, 2014

Why Dollar General Corporation, VeriSign, Inc., and E.I. du Pont de Nemours and Company Are Todayâ€™s

The S&P 500 Index (SNPINDEX: ^GSPC ) ended modestly higher on Friday, ending the week on a bullish note as the end of the second quarter approaches. Wall Street and Main Street alike are hoping that the second, third, and fourth quarters of 2014 will see higher growth than the first quarter, when the U.S. economy actually contracted at a 2.9% annualized rate. Dollar General (NYSE: DG ) , VeriSign (NASDAQ: VRSN ) , and DuPont (NYSE: DD ) investors weren't too optimistic about growth today, as those three stocks ended as the worst performers in the entire S&P index. The S&P, for its part, tacked on three points, or 0.2%, to end at 1,960.

Dollar General lost 7.3% today after the company's Chairman and CEO, Richard W. Dreiling, surprised the stock market by announcing his retirement. Investors have plenty of reasons to like Dreiling, 60, who took control of the company at the beginning of 2008. Under his guidance, the dollar store went public in 2009, increased sales by more than 80%, and expanded its store count to more than 11,000 locations. The silver lining is that Dreiling could stay on at Dollar General for nearly another year -- until May 30, 2015 -- as the board searches for a successor.

VeriSign, which offers domain name registry, network intelligence, and other domain name-related services, shed 3.9% on Friday. A downgrade from Wells Fargo is behind today's drop, as the bank lowered its rating from outperform to market perform, noting that overall domain name registrations in the second quarter are trending lower than the company's midpoint expectations. Google's announced entry into the domain name market earlier this week also threatens to hurt VeriSign's business, especially if Google decides to offer domains at steep discounts, or even give them away for free.

DuPont is seeing farmers switch to soybeans as corn prices drop. Image Source: DuPont.

Finally, shares of chemicals giant DuPont slumped 3.3% today, giving the stock the ignominious distinction of being the Dow Jones Industrial Average's worst daily performer. The company warned investors late yesterday that it expects full-year 2014 earnings to come in between $4.00 and $4.10 per share, notably less than the $4.20 to $4.45 in per-share operating earnings it previously projected. In an industry that increasingly relies on genetically modified and patented seeds for a leg up on competition, DuPont is still subject to the whimsy of Mother Nature and Mr. Market, and challenging weather and falling corn prices combined to put the company in a tough position to grow substantially this year.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Sunday, June 29, 2014

Chipotle and Yum! Brands Are Solid Long-Term Investments

When it comes to food and beverages, some of the foremost names that come to our mind are Chipotle Mexican Grill (CMG) and Yum! Brands (YUM). And this is no surprise as these companies have made a reputation for themselves over the years in the minds of consumers. They have expanded their network considerably and their stores can be seen throughout the world. Moreover, with changing tastes and preferences of the consumers, they have also experimented with their menu. The company has also put in lot of effort on the marketing front to increase sales.

As the network grows, so do the problems related to it. Price hike of various ingredients is a matter of concern for the entire food and beverages industry. The decline in beef production has caused prices to soar. And this increase in price has in turn affected sales; Chipotle and Taco bell have reported a decline in beef sales. In addition, rising prices also impact the company's margin, which again is a matter of concern for management. As a result of the declining production, out-of-stock displays have become common for Chipotle.

A close look at Chipotle

In terms of numbers, Chipotle Mexican Grill has become one of the fastest growing restaurant chains in the U.S. According to statistics, it has achieved more than $3 billion in annual sales with around 1,500 restaurant chains spread across various locations. Chipotle has established itself as a major name in the restaurant industry in the past 20 years and has redefined the fast food concept. The company claims that its fresh ingredients are free from antibiotic, which provides it an edge over its peers.

The stock price of Chipotle has increased more than 600% in the past five years. However, the company is concerned with declining margins. Its margins have declined around 1.05% due to which the stock has become expensive.

Along with beef, salsa ingredients, dairy, and poultry products have also joined the fleet, with an increase in their prices. In addition to this, rising costs in marketing along with cut throat competition has put further pressure on Chipotle's margins.

As already discussed, Chipotle has been experimenting with its menu. Consequently, it has converted its pinto beans menu into a strict vegetarian one by eliminating pork from it. This is a strategic move as it will increase its margins as even with a vegetarian menu, it charging the same price. Along with this, it has strengthened its portfolio by adding La Combe, which will serve coffee brewed from organic beans.

It has been estimated that coffee is one of the most popular beverages around the world with an annual consumption of 400 billion cups. This shows the massive potential of the coffee market, which can be tapped by Chipotle.

A look at Yum!

Chipotle has to face tough competition from its peers such as Yum! Brands. The company has three brands under its hood namely KFC, Taco Bell, and Pizza Hutt. Taco Bell has also altered it menu offerings and is going a step further by joining hands with Lorena Garcia to develop items such as Cantina Burrito bowl and Cantina Burrito.

In such a highly competitive market, price is a decisive factor. Taco Bell offers Burritos for $5, which is around $1.50 less than similar servings by Chipotle. But, management at Chipotle is not ready to lower its price, in fact it believes that it has loyal customers, who will not be lured by petty discounts such as these and will return to it because of their fine experience with Chipotle.

Yum! is focusing on emerging markets such as China. Management believes that China is one of the biggest overseas markets with around 3,800 KFC restaurants. However, KFC's sales have declined around 13% since the start of the year, which is mainly on account of the bird flu panic. But the company had some relief from Pizza Hut, which has offset the decline in sales at KFC.

Conclusion

Both Chipotle and Yum trade in the same industry and hence face the same challenges of price hike, which has been affecting their margins. But the management at both the companies is trying their level best to increase its margins, and this makes them solid investments.

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Wednesday, June 25, 2014

The Rise of Actively Managed ETFs

Actively managed exchange-traded funds have grown significantly in the number of products offered and assets under management over the past year, and continue to gain popularity as an investment vehicle.

As active ETFs continue to attract greater attention and accumulate more investment dollars, they will start competing with traditional active mutual funds for market share, according to a paper released Tuesday.

To better understand the potential of the active ETF segment, SEI collaborated on the study with ETF Trends to assess the current environment as well as their advantages and the obstacles they face.

Actively Managed ETFs

The paper noted that although actively managed ETF assets under management and number of products are growing, they still make up less than 1% of the global market for ETFs today — as of March 31, 85 products controlled $15 billion of assets out of the global ETF total of $2.7 trillion.

These vehicles come with an innate creation/redemption process that allows for a potentially more tax-efficient product than mutual funds.

Actively managed ETFs are required to make daily disclosures of holdings, yet some providers have petitioned the SEC to increase the time interval beyond daily disclosures.

However, some active managers want to shield their portfolio decision-making from copycats, and now may have a tool in an innovation called exchange-traded managed funds, which are wending their way through the SEC approval process.

Active ETFs now more broadly utilize derivatives, enabling fund sponsors to expand to other asset classes. The paper said it expected more competition between actively managed ETFs and other products utilizing various alternative investment strategies and asset classes, such as commodities or foreign currencies.

The paper noted that active ETFs are now being developed by more traditional mutual fund-only providers, such as T. Rowe Price, Fidelity Investments, Franklin Resources, Janus Capital Group and Columbia Management Investment Advisers, rather than just by specialist ETF manufacturers.

They are also adding support to the passive indexing providers through tracking “enhanced” indexes that screen for specific stocks.

The Road Ahead

While the actively managed ETF space is still in its nascent stages, active management may represent the next growth phase in the ETF industry, according to the paper.

New product launches have helped propel active ETF flows and total assets, but whether this momentum will continue remains to be seen.

The authors see wind to the industry’s back in the move from fixed-income-only offerings to balanced, alternative and even equity-focused funds.

The SEC’s lifting of restrictions on derivatives in active ETFs may prompt a new wave of active offerings, adding wind to the industry’s back and helping support the move from fixed-income-only offerings to balanced, alternative or even equity-focused funds.

---

Check out ETF-Mutual Fund Hybrid: The Next Big Thing? on ThinkAdvisor.

Tuesday, June 24, 2014

Markets Up as S&P Gets Whiff of All-Time Closing High

NEW YORK (TheStreet) -- Last Thursday, we mentioned that the markets were searching for a bottom, and this past Friday, we mentioned that the markets may have found a bottom. In retrospect, that was the correct market call from a short-term trading perspective.

The S&P 500 index held its daily buy-trade level of 1842 last Thursday and zoomed higher from there this past Friday and on Monday.

With all this upside momentum on Monday, the S&P 500 was not able to close above its all-time closing high of 1878. This was the third attempt. On the edge, that is not a bullish sign.

The DJIA closed at 16,457.66, up 134.60, and the S&P 500 closed at 1872.34, up 14.72.

Volume was pathetic Monday, which is another bad sign. The up days in 2014 have been common for their lack of buying conviction, as has been mentioned in previous columns. On a more positive note, just when the bears were growling the most to short this market at 1842, and saying that a market top had been put in, the markets came roaring back again, as has been the case this year. The "buy the dips, sell the rips" philosophy has been the key to trading this market. As mentioned in Friday's column, the Nasdaq and Russell 2000 indexes were in oversold territory and were both poised for a continued move higher this week. The Nasdaq and Russell 2000 did indeed surge higher on Monday. The Nasdaq closed up 43.23 points at 4,198.99 and the Russell 2000 closed up 21.22 points at 1173. Both indexes have now worked off their oversold conditions. A traders market, pure and simple. If the DJIA continues to stay in the green, by Wednesday it will be well into overbought territory according to those same internal algorithm numbers that flagged the Nasdaq and Russell 2000 indexes as being oversold. So, I expect more volatility this week and some selling pressure as the week progresses.

Stock quotes in this article: OWW, SWY

We need to keep watch of the CRB Food Index and the CRB Commodities Index in 2014. The CRB food index is up +19.3% year to date and the commodities index is up +8.9% year to date. Both of these are inflation-accelerating signals. In addition, the Spyders Select Utilities ETF is up +8% year to date. Inflation slows growth.

The month of March is now history, so the end of month window dressing and quarter end is over. What the month of April brings is anyone's guess. The S&P 500 daily trading range held true again today. Trading the ranges is the formula for success in 2014.

Two positions that were mentioned in Friday's column were Orbitz (OWW) and Safeway (SWY). OWW was sold on Monday morning for a nice profit again. I did add to the SWY at the close of trading.

At the time of publication, the author held positions in SWY, but positions may change at any time.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Stock quotes in this article: OWW, SWY

Monday, June 23, 2014

Global Conflict Affecting The Markets

The Russians and ISIS are coming, along with a host of others… with the Dow and S&P closing at another new all-time high, many traders we talk to think the S&P could be setting up for a quick jolt lower.

As technical analysts, we rely on trend lines and moving averages. But markets are also moved by global concerns. When President Obama started pulling out of Iraq in 2009, the U.S. stock market was setting up for one of the fastest and largest bounces in its history.

After a 190% bounce in the S&P (CME:SPU14) it’s not rates or the Fed taper that are worrying the markets; it’s the inability of the Iraqi armed forces to stand up to ISIS and a big pickup in attacks by Al Qaeda in Afghanistan and Pakistan. If crude oil rises sharply the S&P will weaken, but energy prices will not be the only reason.

The Middle East seems to be going up in flames, while Eastern Europe remains in turmoil, and and it doesn’t seem like the U.S. government wants to throw its hat in the ring this time. Many applaud Obama’s nuanced approach, sending only 300 advisors. It is a stark contrast to the previous administration.

Doing nothing—or appearing to—creates more short-term uncertainty, but does that mean the S&P will actually go down? The answer is yes, the S&P can and will sell off if crude trades sharply higher, but will it stay down? I don’t think it will.

As we’ve said many times, the S&P and thus the entire stock market have a way of turning any news into a reason to rally. Even recovering from the initial shock of bad news seems to put the S&P into a rallying mood.

Unlike last week, there is going to be a pickup in economic reports both in the U.S. and Europe at the same time more families are going on vacations and cutting back from trading.

The Asian markets closed mostly lower (Hang Seng -1.68%) and in Europe 9 out of 12 markets are down. This week’s economic schedule picks up slightly from last week’s; there are 21 economic releases, 12 T-bill or T-bond announcements or auctions, and no Fed speak. Today’s economic schedule starts with the the Chicago Fed National Activity Index, PMI Manufacturing Index, existing home sales, 3- and 6-month T-bill auction and earnings from Micron Technology (NASDAQ: MU) and Sonic Corp. (NASDAQ: SONC).

S&P futures up 14 of the last 16, up 6 in a row

Out with the June Quad Witch and in with the June Q2 rebalance. My gut tells me the E-mini S&P (CME:ESU14) can go a little higher from here but that we are getting close to some type of pullback.

I predict that summer trading volume in the ESU14 (including Globex volume) will drop to 750,000 contracts a day. Once the markets get past the end of June, July will be a catastrophe as more and more families go on vacation in the U.S. and Europe.

June Quad Witch Out, June Quarterly Rebalance In

As always, please make sure to use protective stops when trading futures…

In Asia, 8 of 11 markets closed lower: Shanghai Comp. -0.11%, Hang Seng -1.68%, Nikkei +0.13%. In Europe, 9 of 12 markets are trading lower: DAX -0.41% , FTSE -0.27% Morning headline: “S&P seen higher as ISIS spreads regional fears” Fair value: S&P-8.57 , NASDAQ -9.54 , Dow Jones -85.41 Total volume: 1.15mil ESU and 2.2k SPU traded Economic calendar: Chicago Fed National Activity Index, PMI Manufacturing Index, existing home sales, 3- and 6-month T-bill auction and earnings from Micron Technology (NASDAQ: MU) and Sonic Corp. (NASDAQ: SONC). E-mini S&P 5000.00N/A - N/A Crude0.00N/A - N/A Shanghai Composite0.00N/A - N/A Hang Seng22804.811-389.25 - -1.68% Nikkei 22515369.28+19.86 - +0.13% DAX9920.92-66.32 - -0.66% FTSE 1006800.56-24.64 - -0.36% Euro1.3601

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Futures Previews Intraday Update Markets Trading Ideas

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Last Week's Brick Wall For S&P No Surprise

By Chris Ebert

There aren't too many aspects of the stock market that are dependable. Just ask any trader who has attempted to predict whether the S&P will be higher or lower tomorrow than it is today. It is likely that many will respond that their track record is, at best, only slightly better than flipping a coin – at least among respondents who answer truthfully.

Although predicting whether stock prices will rise or fall often proves difficult for highly experienced traders and nearly impossible for new traders, predicting how high or how low stock prices are likely to go is sometimes an easier task. In stock-market terminology, the analysis of such highs and lows is known as resistance and support, respectively.

A common form of resistance, widely known as brick-wall resistance, has been detailed here quite often, most recently in last weekend's post entitled "Brick-wall Resistance May Develop Soon".

Such resistance has been known to affect the S&P 500 when it re-tests a recent high after it has entered Bull Market Stage 3. So, it should have come as no surprise that the S&P hit a brick wall this past week when it re-tested the 1880 level after having entered Stage 3 the previous week.

Although the stock market technically moved back to Bull Market Stage 2 this past week, the specter of brick-wall resistance remains, and may remain for several weeks to come.

Click on chart to enlarge

*All strategies involve at-the-money options opened 4 months (112 days) prior to this week's expiration using an ETF that closely tracks the performance of the S&P 500, such as the SPDR S&P 500 ETF Trust (NYSEARCA:SPY)

You Are Here – Bull Market Stage 2

Recognizing whether the stock market is currently at Stage 2 requires a quick analysis of the three categories (A, B, and C) of option strategies shown in the chart above, using a plus (+) for profitable strategies and a minus (-) for unprofitable ones.

Covered Call trading is currently profitable (A+). This week's profit was 3.0%. Long Call trading is currently profitable (B-). This week's profit was 0.3%. Long Straddle trading is not currently profitable (C-). This week's loss was -2.7%.

The combination, A+ B+ C-, occurs whenever the stock market environment is currently at Stage 2

Stage 2 is a market environment in which at-the-money Long Calls and Married Puts on the S&P are profitable, at expiration, when opened 4 months prior to expiration. While the profitability of Long Calls and Married Puts only occurs in a market that is strongly bullish, it should be noted that such trades only experienced a tiny 0.3% profit this past week, so the strength of the bulls is currently nothing to write home about.

What Happens Next?

As was mentioned here last week:

Stage 3 is known here as the "resistance" stage because it tends to mark a slowing of momentum for rising stock prices, so much so that recent high prices may tend to become brick-wall resistance in the future. Resistance at recent highs develops as traders become less and less confident that stock prices will ever exceed those highs.

Once Stage 3 is underway, traders who bought stock at recent high prices, now feeling pressure to get out of those stocks if they ever return to break-even, tend to create selling pressure if stocks do return to those same highs. Such pressure does not normally accompany more-bullish stages, such as Stage 1 or 2, since traders at those stages are accustomed to stocks routinely making new highs after each dip. The "buy the dip" mentality becomes much less common when Stage 3 begins.

When analyzing the market as a whole, the recent high of the S&P near 1880 is much more likely to become a brick wall if that level is approached over the upcoming weeks.

Last week's analysis still applies. Until the market is confronted with some really good economic news, the S&P is likely to meet with resistance if it approaches 1880 again over the next several weeks.

Options Market Stages 03-22-2014

The thing about brick walls is that they tend to outlast the market conditions that created them. In other words, if a brick wall acts as resistance when the S&P hits it from below, it will often act as a strong level of support when the S&P smashes through and then approaches the brick wall again from above.

The strength of the brick wall may be used as an advantage in many types of trades that depend upon the brick wall acting as a level of future support, especially using broad market ETFs such as

SPDR S&P 500 ETF Trust (NYSEARCA:SPY) which tracks the S&P 500

SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) which tracks the Dow Jones Industrial Average.

PowerShares QQQ Trust Series 1 ETF (NASDAQ:QQQ) which tracks the Nasdaq

Although none of the above products offers a guaranteed profit, there are some common option trades worth considering nonetheless. These are just a sample of many possible option trades:

Covered Calls – Traders may have an advantage selling Covered Calls with a strike price at or above the level of brick-wall resistance and an expiration date within the next several weeks during which that resistance level is expected to remain valid. The expectation is that the Calls will expire worthless, thereby generating income while resistance remains; eventually the Calls will be assigned when resistance breaks down. Of course, as always, Covered Calls may result in large losses if stock prices decline more than the amount of Call option premium collected. Naked Calls – An inherently risky strategy, but profitable when employed under favorable market conditions, is to sell Naked Calls with a strike price at the level of brick-wall resistance and then cover those Calls with long shares only if the brick wall is broken. The goal is to capitalize on resistance as long as it exists, by collecting premiums on Calls that expire worthless, and then depend upon that same level of resistance providing support in the future to limit risk on the long shares purchased when the resistance was broken. As long as support exists, the Calls will eventually be assigned and the trader will pocket the Call premium. Bear Call Spreads – This strategy, which involves selling Calls with a strike price at the level of the brick wall while simultaneously buying an equal number of Calls at a strike price that is a bit higher, will turn a profit as long as resistance is not broken, with limited losses if resistance falls. Calendar Call Spreads - Here, a trader sells Calls with a near expiration and a strike price at the level of the brick wall and buys the same number of Calls at the same strike price with a further expiration. Such a trader can profit as the near-term Calls expire worthless when the market hits the brick wall and bounces lower, and also profit when the longer-term Calls are held open after resistance crumbles and stock prices soar higher. With such Calendar Call Spreads, there is always a risk that stock prices could decline, resulting in a larger loss on the long Calls than is realized on the short Calls.

The following chart provides a complete description of the Options Market Stages.

Click on chart to enlarge

For a more in-depth examination of the Options Market Stages, the following 3-Step analysis is provided.

Weekly 3-Step Options Analysis:

On the chart of "Stocks and Options at a Glance", option strategies are broken down into 3 basic categories: A, B and C. Following is a detailed 3-step analysis of the performance of each of those categories.

STEP 1: Are the Bulls in Control of the Market?

The performance of Covered Calls and Naked Puts (Category A+ trades) reveals whether the Bulls are in control. The Covered Call/Naked Put Index (CCNPI) measures the performance of these trades on the S&P 500 when opened at-the-money over several time frames. Most important is the profitability of these trades opened 112 days prior to expiration.

Covered Call Trading

Covered Call trading did not experience a single loss in 2013, and the streak endures so far in 2014, continuing a streak of nearly lossless trading extending all the way back to late 2011. That means the Bulls have been in control since late 2011 and remain in control here in 2014. As long as the S&P remains above 1750 over the upcoming week, Covered Call trading (and Naked Put trading) will remain profitable, indicating that the Bulls retain control of the longer-term trend. The reasoning goes as follows:

• "If I can sell an at-the-money Covered Call or a Naked Put and make a profit, then prices have either been going up, or have not fallen significantly." Either way, it's a Bull market.

• "If I can't collect enough of a premium on a Covered Call or Naked Put to earn a profit, it means prices are falling too fast. If implied volatility increases, as measured by indicators such as the VIX, the premiums I collect will increase as well. If the higher premiums are insufficient to offset my losses, the Bulls have lost control." It's a Bear market.

• "If stock prices have been falling long enough to have caused extremely high implied volatility, as measured by indicators such as the VIX, and I can collect enough of a premium on a Covered Call or Naked Put to earn a profit even when stock prices fall drastically, the Bears have lost control." It's probably very near the end of a Bear market.

STEP 2: How Strong are the Bulls?

The performance of Long Calls and Married Puts (Category B+ trades) reveals whether bullish traders' confidence is strong or weak. The Long Call/Married Put Index (LCMPI) measures the performance of these trades on the S&P 500 when opened at-the-money over several time frames. Most important is the profitability of these trades opened 112 days prior to expiration.

Long Call Trading

Long Call trading was profitable for almost all of 2013 and thus far in 2014 except for a brief break from August through early October, and a brief break this March. The return to gains this past week marks a shift in sentiment among traders, but the gains are so small, at 0.3%, as to not offer any dependable indication of a change in the emotions of traders. If the S&P fails to close the upcoming week above 1860, Long Calls (and Married Puts) will fail to profit, suggesting the Bulls have lost confidence and strength. The reasoning goes as follows:

• "If I can pay the premium on an at-the-money Long Call or a Married Put and still manage to earn a profit, then prices have been going up – and going up quickly." The Bulls are not just in control, they are also showing their strength.

• "If I pay the premium on a Long Call or a Married Put and fail to earn a profit, then prices have either gone down, or have not risen significantly." Either way, if the Bulls are in control they are not showing their strength.

STEP 3: Have the Bulls or Bears Overstepped their Authority?

The performance of Long Straddles and Strangles (Category C+ trades) reveals whether traders feel the market is normal, has come too far and needs to correct, or has not moved far enough and needs to break out of its current range. The Long Straddle/Strangle Index (LSSI) measures the performance of these trades on the S&P 500 when opened at-the-money over several time frames. Most important is the profitability of these trades opened 112 days prior to expiration.

Long Straddle Trading

The LSSI currently stands at -2.7%, which is within normal limits. Profits on Long Straddle trades will not occur this coming week unless the S&P exceeds 1915. Anything higher than 1915 indicates the presence of euphoria, often accompanied by lottery-fever-type bullishness, so the S&P exceeding that level this upcoming week would indicate that Bull market of 2013 was once again underway and the recent pullback was simply a pause in the uptrend.

Excessive profits on Long Straddle trades, such as those exceeding 4%, will not occur this coming week unless the S&P rises above 1987. Despite the presence of euphoria if the S&P was to reach that level, anything higher than 1987 this coming week would be absurd and would likely to result in some selling pressure. Historically, such absurd bullishness has been associated with subsequent pullbacks and, occasionally, Bull-market corrections.

Excessive losses on Long Straddle trades, such as those exceeding 6% will not occur this coming week unless the S&P falls to 1806. At or near that level a subsequent breakout is likely. That level is important to watch, as anything below it, should it occur, is likely to indicate a major Bull-market correction is underway, and the market would be at risk of breaking out into a lower trading range. As mentioned in Step 1, if such a lower trading range was to fall below 1750, it could be a very, very bearish signal.

The reasoning goes as follows:

• "If I can pay the premium, not just on an at-the-money Call, but also on an at-the-money Put and still manage to earn a profit, then prices have not just been moving quickly, but at a rate that is surprisingly fast." Profits warrant concern that a Bull market may be becoming over-bought or a Bear market may be becoming over-sold, but generally profits of less than 4% do not indicate an immediate threat of a correction.

• "If I can pay both premiums and earn a profit of more than 4%, then the pace of the trend has been ridiculous and unsustainable." No matter how much strength the Bulls or Bears have, they have pushed the market too far, too fast, and it needs to correct, at least temporarily.

• "If I pay both premiums and suffer a loss of more than 6%, then the market has become remarkably trendless and range bound." The stalemate between the Bulls and Bears has gone on far too long, and the market needs to break out of its current price range, either to a higher range or a lower one.

*Option position returns are extrapolated from historical data deemed reliable, but which cannot be guaranteed accurate. Not all strike prices and expiration dates may be available for trading, so actual returns may differ slightly from those calculated above.

The preceding is a post by Christopher Ebert, co-author of the popular option trading book "Show Me Your Options!" He uses his engineering background to mix and match options as a means of preserving portfolio wealth while outpacing inflation. Questions about constructing a specific option trade, or option trading in general, may be entered in the comment section below, or emailed to OptionScientist@zentrader.ca

Sunday, June 22, 2014

Under Armour shares jump on stock split

Under Armour continues to be a stock market over-achiever.

Its stock jumped 2.3% on Monday in early morning trading, up more than $2.80 to $120.15, after the trendy athletic gear maker announced that its board had approved a 2-for-1 stock split. This mark's the Baltimore-based company's second stock split since going public in November 2005. Its last stock split was in July 2012.

CEO Kevin Plank said in a statement that Baltimore-based company believes the stock split may broaden its investor base and improve the stock's trading liquidity.

The move comes at a time of a still-expanding stock market, even as other high-profile stock splits have recently been announced. Last week, tech mega-giant Google announced plans for its first-ever stock split during the company's fourth quarter earnings call.

Under Armour has been on a tear since the winter Olympics, when the company's high-tech outfits were initially the unwarranted scapegoat for the poor performance of the U.S. speedskating team in Sochi. Company executives, however, never wavered and not only stood by their techy suits, but doubled down, and committed to sponsoring the team through 2022.

Last week, Under Armour announced that it had launched in Brazil. The brand will be available in over 70 of the country's premium points of sale and e-commerce hubs, such as Centauro, Netshoes and Paquetá.

Under Armour Inc. said Monday that the additional shares issued due to the stock split will be distributed on April 14 to shareholders of record on March 28.

Contributing: Associated Press

Saturday, June 21, 2014

Workers File Lawsuit Against McDonald’s Corporation (MCD)

On Thursday, workers from three states filed lawsuits against fast-food giant McDonald’s Corporation (MCD).

Filing in California, Michigan, and New York, workers are accusing McDonald’s in engaging in a variety of practices to avoid paying employees what they are owed. Some of the violations include the use of software that monitors the ratio of labor costs as a percentage of revenue. Lawyers noted that the class action lawsuits could affect roughly 30,000 workers; the suits seek back pay and other damages [see also A Brief History of JP Morgan's Massive Fines (JPM)].

Commenting on the allegations, a McDonald’s franchise in Oak Brook, Illinois stated that they will be investigating the matter; “McDonald’s and our independent owner-operators share a concern and commitment to the well-being and fair treatment of all people who work in McDonald’s restaurants.”

McDonald’s shares fell 1.38% during Thursday’s session. Year-to-date, the stock is up 2.39%.

Friday, June 20, 2014

3 Biotech Stocks Spiking on Big Volume

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

>>5 Stocks Ready for Breakouts

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

>>5 Toxic Stocks to Sell in March

With that in mind, let's take a look at several stocks rising on unusual volume recently.

InterMune (ITMN), a biotechnology company, focuses on the research, development and commercialization of therapies for pulmonology and orphan fibrotic diseases in North America and Europe. This stock closed up 10.7% to $33.87 in Friday's trading session.

Friday's Volume: 8.27 million

Three-Month Average Volume: 2.74 million

Volume % Change: 450%

>>5 Stocks Under $10 Set to Soar

From a technical perspective, ITMN exploded to the upside here right off some support at $30 and broke out above some near-term overhead resistance at $32.53 with monster upside volume. This move is quickly pushing shares of ITMN within range of triggering another big breakout trade. That trade will hit if ITMN manages to take out Friday's high of $35.58 to its 52-week high at $38.73 with high volume.

Traders should now look for long-biased trades in ITMN as long as it's trending above Friday's low of $29.97 and then once it sustains a move or close above those breakout levels with volume that hits near or above 2.74 million shares. If that breakout gets underway soon, then ITMN will set up to enter new 52-week-high territory above $38.73, which is bullish technical price action. Some possible upside targets off that move are $45 to $50.

Emergent BioSolutions (EBS), a specialty pharmaceutical company, engages in the development, manufacture and commercialization of specialized products for use in defense and commercial markets in the U.S. and internationally. This stock closed up 10.6% at $27.77 in Friday's trading session.

Friday's Volume: 1.09 million

Three-Month Average Volume: 316,730

Volume % Change: 388%

>>5 Stock Charts to Buy for Gains in March

From a technical perspective, EBS gapped up sharply higher here and broke out above some near-term overhead resistance levels at $26 to $26.71 with heavy upside volume. This move also pushed shares of EBS into new 52-week-high territory, which is bullish technical price action. Market players should now look for a continuation move higher in the short-term if EBS manages to take out Friday's high of $27.96 with strong volume.

Traders should now look for long-biased trades in EBS as long as it's trending above Friday's low of $27.96 and then once it sustains a move or close above $27.96 with volume that's near or above 316,730 shares. If we get that move soon, then EBS will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $35 to $40.

Aegerion Pharmaceuticals (AEGR), a biopharmaceutical company, engages in the development and commercialization of novel therapeutics to treat debilitating and fatal rare diseases in the U.S. This stock closed up 10.6% at $55.53 in Friday's trading session.

Friday's Volume: 3.74 million

Three-Month Average Volume: 846,051

Volume % Change: 348%

From a technical perspective, AEGR exploded sharply higher here with heavy upside volume. This stock has been downtrending badly for the last few weeks, with shares moving lower from its high of $68.76 to its intraday low of $47.11. During that downtrend, shares of AEGR have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of AEGR could be setting up to reverse its downtrend and enter new uptrend, since the stock is coming off its low with big volume.

Traders should now look for long-biased trades in AEGR as long as it's trending above $52 or $50 and then once it sustains a move or close above Friday's high of $58.08 with volume that's near or above 846,051 shares. If that move starts soon, then AEGR will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $62.83 to $65. Any high-volume move above those levels will then give AEGR a chance to tag $68 to $70.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

Thursday, June 19, 2014

Best Buy, J.C. Penney, and Barnes & Noble Shares Soar, But So What?

Barnes and Nobles Earns AP/Dave Martin The last week of February was a redemptive week for three fading retailers, but it's hard to argue that any of them will remain market darlings for long. J.C. Penney (JCP) was one of the market's biggest winners, soaring 29 percent after posting improving quarterly results. The struggling department store chain posted a narrower loss than analysts were forecasting, posting positive comparable-store sales during the holiday period for the first time in a couple of years. Barnes & Noble (BKS) also moved higher by 8 percent last week on strong financial results. The bookseller that outlasted Borders came through with a quarterly profit of $0.86 a share, blowing past the $0.61 a share that Wall Street pros were targeting. Its Nook business is still suffering from sharp declines, but its actual superstores are holding up surprisingly well. An analyst at Maxim Group boosted his price target on the shares from $20 to $32. Best Buy (BBY) also got a boost from a better than expected report during the holiday quarter. Best Buy's profit for the holiday period declined to $1.24 a share, but that was well ahead of the $1.01 a share that analysts were expecting. Shares of Best Buy also rose 8 percent on the week. These chains seemed to be on the way out last year, and all of them have brought in new CEOs over the past two years. Seeing the stocks move at least 8 percent higher and as much as 29 percent higher last week may suggest that reports of their deaths have been greatly exaggerated, but let's not assume that the storm clouds have cleared at any of them. Penney Arcade The troubled Ron Johnson era ended at J.C. Penney last year. The retail guru -- who had been instrumental in turning Target (TGT) from "cheap" into "cheap chic" before heading to Apple (AAPL) in time to start rolling out the wildly successful Apple Store chain -- flopped at the meandering department store chain. Investors cheered when Johnson arrived at J.C. Penney in late 2011. His plan was to put an end to the chain's discounting- and coupon-heavy practices, and reorganize the stores to center around trendy third-party brands. Alas, Johnson's vision was too radical, alienating the remaining J.C. Penney customers without winning over new ones. He was fired 11 months ago, replaced by an earlier regime that the board had originally tried to move away from. Despite last week's huge pop, J.C. Penney is still losing a lot of money. The holiday quarter's positive comps are a good sign, but its average store is still selling a lot less than it did two years ago. The identity crisis continues. Book Ends Barnes & Noble was already trending higher a week earlier when an investment firm was offering to pay a premium for a 51 percent stake in the company. It may seem like an opportunistic play, but do we really think that traditional books will regain their popularity? Barnes & Noble responded to the e-book trend a few years ago by introducing the Nook to take on the Kindle, but sales have been falling sharply over the past several quarters. It's hard to compete against Amazon (AMZN) when it's willing to sacrifice profitability on Kindles for the sake of market share. It also doesn't help that Apple's iPad and other tablets also double capably as e-readers. Best Bye Best Buy shares more than tripled in 2013, but it's been a different story in 2014. Despite last week's bounce, the leading consumer electronics retailer has seen its stock shed a third of its value this year. It's been a challenge for Best Buy to keep customers coming back to its stores given that online retailers offer cheaper prices, and that the DVDs, CDs, video games and software discs that used to attract much of its traffic have been supplanted by digital media that consumers can buy from the comfort of their couches. Despite the upbeat market's response to the quarterly reports, comps at Best Buy and Barnes & Noble were negative during the holiday quarter. The market was braced for worse from all three companies, but all three retailers have a long way to go before we can seriously begin discussing them as potential turnaround stories.

Wednesday, June 18, 2014

Is Rally Software Development Corp (RALY) Really Rallying? ORCL, IGV & SKYY

Small cap cloud and enterprise services stock Rally Software Development Corp (NYSE: RALY) just had a reversal – meaning its worth taking a closer look at the stock along with potential performance benchmarks like Oracle Corporation (NYSE: ORCL), iShares North American Tech-Software (NYSEARCA: IGV) and First Trust ISE Cloud Computing Index (NASDAQ: SKYY).

What is Rally Software Development Corp?

Small cap Rally Software Development Corp is a global provider of cloud-based solutions for managing Agile software development. More specifically, Rally Software Development Corp's leading global provider of enterprise-class software and services solutions that accelerate the pace of innovation, improve productivity and respond effectively to evolving competitive markets and customer needs. Rally's SaaS platform transforms the way organizations manage the software development lifecycle by aligning software development and strategic business objectives, facilitating collaboration, and increasing transparency while the company's consulting and training services division apply Agile and Lean approaches to help organizations innovate, lead, adapt and deliver.

As for potential performance benchmarks, Oracle Corporation is a provider of enterprise software and computer hardware products and services; the iShares North American Tech-Software tracks the S&P North American Technology-Software Index through 61 holdings; and the First Trust ISE Cloud Computing Index tracks the ISE Cloud Computing Index through 41 holdings.

What You Need to Know or Be Warned About Rally Software Development Corp

At the end of the first week of June, Rally Software Development Corp reported a 21% revenue increase to $19.4 million and a GAAP net loss of $8.5 million compared to a GAAP net loss of $5.8 million. Total paid seats increased 23% to nearly 226,000 over the total paid seats one year ago and a 6% increase over total paid in seats at the end of the prior quarter with new customers including: Black & Veatch, Core Media, the Driver and Vehicle Licensing Agency in the UK, eTouch, PowerNet Global, Smartshift Technologies, Snag-a-Job, SpiritClips and Ubiquity Broadcasting. The Chairman/CEO commented:

"We continued our success in selling our solution to the large enterprise buyer and clearly enjoyed support from our largest customers. For example, the 7,000 seat upgrade order we enjoyed from one of our top 15 customers - now at 12,000 seats under contract - underscores this aspect of our business. We struggled slightly in selling new seats to new customers, which was due largely to fast growth in quota carrying headcount that caused some execution delay as these new team members trained and learned about their new territories and Rally Software's business."

In the earnings call though (the Transcript is available on Seeking Alpha here), he stated:

"We fell short of our expectations with respect to new seats sold to new customers. As we discussed in our last earnings call, we've made significant investments in our sales and marketing engine. We have new sales teams working new territories and [it was dropped] (ph) as a result we were seeing sales cycle take a bit longer, although this was not surprising.

We anticipated that our sales headcount growth would cause some execution delay as our new sales reps trained and learned new territories while seasoned reps learn to work with new team members. It takes time but we are excited about the quality of our sales teams and we are confident in these investments and at the lay of foundation for stronger performance in the future."

Nevertheless, shares plummeted 30% because quarterly results and outlook (which was lowered) disappointed Wall Street; but since then, a couple of positive articles have appeared on sites like Seeking Alpha to halt the share reversal.

Moreover, there has also been steady insider buying since the beginning of the year – including three transactions since the earnings report:

DateInsiderSharesTypeTransactionValue*

Jun 12, 2014	BOGAN THOMAS FDirector	50,000	Direct	Purchase at $9.18 per share.	459,000
Jun 12, 2014	WOLF TIMOTHY VDirector	5,000	Direct	Purchase at $9.15 per share.	45,750
Jun 12, 2014	MILLER TIMOTHY A.Officer	30,000	Direct	Purchase at $9.21 per share.	276,300
Mar 31, 2014	LEJEAL JAMES MOfficer	17,400	Direct	Acquisition (Non Open Market) at $0 per share.	N/A
Mar 31, 2014	MESIKAPP KENNETH MOfficer	6,400	Direct	Acquisition (Non Open Market) at $0 per share.	N/A
Mar 31, 2014	HUBERMAN DAVID A.Officer	4,500	Direct	Acquisition (Non Open Market) at $0 per share.	N/A
Mar 31, 2014	PATTON DANIEL A.Officer	13,000	Direct	Acquisition (Non Open Market) at $0 per share.	N/A
Mar 31, 2014	MARTENS RYAN AOfficer	10,600	Direct	Acquisition (Non Open Market) at $0 per share.	N/A
Mar 27, 2014	MESIKAPP KENNETH MOfficer	4,000	Direct	Option Exercise at $5.48 per share.	21,920
Mar 17, 2014	MILLER TIMOTHY A.Officer	1,639	Direct	Acquisition (Non Open Market) at $0 per share.	N/A
Mar 17, 2014	LEJEAL JAMES MOfficer	55	Direct	Acquisition (Non Open Market) at $0 per share.	N/A
Feb 25, 2014	MILLER TIMOTHY A.Officer	1,639	Direct	Acquisition (Non Open Market) at $0 per share.	N/A
Feb 25, 2014	LEJEAL JAMES MOfficer	55	Direct	Acquisition (Non Open Market) at $0 per share.	N/A
Feb 20, 2014	MILLER TIMOTHY A.Officer	1,639	Direct	Acquisition (Non Open Market) at $0 per share.	N/A
Feb 20, 2014	LEJEAL JAMES MOfficer	55	Direct	Acquisition (Non Open Market) at $0 per share.	N/A

Share Performance: Rally Software Development Corp vs. ORCL, IGV & SKYY

On Tuesday, small cap Rally Software Development Corp fell 1.19% to $10.82 (RALY has a 52 week trading range of $8.40 to $33.06 a share) for a market cap of $268.99 million plus the stock is down 44.9% since the start of the year, down 54.7% over the past year and down 39.2% since April 2013. Here is a look at the latest performance chart for Rally Software Development Corp verses the performance of Oracle Corporation, iShares North American Tech-Software and First Trust ISE Cloud Computing Index:

As you can see from the above chart, Oracle Corporation, iShares North American Tech-Software and First Trust ISE Cloud Computing Index have been steady performers while Rally Software Development Corp began declining after last summer.

Finally, here is a look at the latest technical chart for all four investments showing a clear downtrend for Rally Software Development Corp:

The Bottom Line. Small Rally Software Development Corp does look like its having a reversal and is clawing back some of its losses – at least for the short-term. However, investors with a long term time horizon will need to look more closely at the stock along with the product and services it offers.

The FOMC Meeting And What Low Rates Really Mean

The Fed can’t keep rates low forever and there is talk that they may raise rates faster than anyone has believed up to now.

The order filler went on to say that most traders in the Eurodollar futures and options don’t think the Fed will raise rates anytime soon but did say he expects to see some type of movement at the end of 2015.Last Friday I had a chance to sit down with a Eurodollar options order filler to get his point of view on rates. I also asked him how it was going in the pits and he said that there was a big pickup in volume last year when there was talk that the Fed might start to move short-term rates higher. Almost a year later nothing has changed.

7 Years Later

Interest rates have always been a big part of the futures markets but over the last 7 years both the options and futures volume have fallen off a cliff.

What used to be the one of the biggest volume pits on the floor has been hurt by the Fed’s zero-rate policy. Long before the CME bought the Board of Trade the bond pit had already gone from 600 in the pit down to 20. The Eurodollar futures and options that used to have over 2,500 people is down to 150 to 200. As the volume disappeared so did the traders.

Free Money

Cheap rates has been the main driver of the stock market. With little or no return on interest rate products the public has had no place to go but stocks. This has worked well for those that stuck with the buy and hold but those who waited for a correction have been left on the sidelines.

With no 10% correction in almost 3 years and the S&P trading above 1900 and the Dow nearing 17000, many are wondering if this is just a runaway train or a real sign of confidence in the economy. The answer is, it’s some of both.

There are good reasons for optimism: 9 million new jobs created, a return to the pre-crisis unemployment rate, 7.5 million newly enrolled in health insurance plans, an end to the $10 billion a month war in Iraq. But with inequality worse than that of the Great Depression, the middle class is wondering just who this recovery is really helping.

This lack of trust goes to the heart of what credit means and does for an economy; it’s an expression of our faith in ourselves and each other. The Fed is keeping rates low in hopes that banks will start investing in entrepreneurs, in infrastructure, in things that make societies grow.

If the massive stockpiles of cash that companies have raised in this stock boom, combined with cheap credit, can be invested in the things that will make a bright and secure future for everyone, not just a few, the Fed’s strategy will have turned the financial crisis into a great opportunity.

The Asian markets closed mostly higher and in Europe 8 of 12 markets are trading modestly higher. This week’s economic schedule starts with the first day of the FOMC two-day meeting, Consumer Price Index, Housing Starts, Redbook and earnings from Bob Evans Farms (NASDAQ: BOBE), Adobe Systems (NASDAQ: ADBE), Yingli Green Energy (NYSE: YGE) and La-Z-Boy (NYSE: LZB).

Our View: Mutual Fund Monday’s return has not been kind to Turnaround Tuesday, which used to be the most winning day of the week. Turnaround Tuesday has closed higher 4 out of the last 6 weeks.

While we maintain a bullish bias we also know you have to be on guard for the headline algos, which take the media hype you see in “Breaking News: Crisis in Iraq” graphics and turn it into short sales based on how fast the words “Iraq” and “crisis” start trending on Google and Twitter.

Our view is to sell the early rally and buy weakness, if the ESU14 can get back above 1933-1934 we think it could trade up to 1938-1940.

As always, please make sure to use protective stops when trading futures…

In Asia, 7 of 11 markets closed higher : Shanghai Comp. -0.92% , Hang Seng -0.42%, Nikkei +0.29%. In Europe, 8 of 12 markets are trading higher : DAX +0.15% , FTSE +0.04 % Morning headline: “S&P 500 Index Seen Higher Ahead If Housing Data ” Fair Value: S&P -8.11, NASDAQ -8.00, Dow Jones -79.96 Total volume: 6k ESU and 1.73k SPU traded Economic calendar: FOMC meeting begins, Consumer Price Index, Housing Starts, Redbook and earnings from Bob Evans Farms (NASDAQ: BOBE), Adobe Systems (NASDAQ: ADBE), Yingli Green Energy (NYSE: YGE) and La-Z-Boy (NYSE: LZB). E-mini S&P 5001941.50+5.00 - +0.26% Crude102.15+0.02 - +0.02% Shanghai Composite0.00N/A - N/A Hang Seng23203.59-97.08 - -0.42% Nikkei 22514975.97+42.68 - +0.29% DAX9920.32+36.34 - +0.37% FTSE 1006766.77+12.13 - +0.18% Euro1.3541

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Futures Intraday Update Markets

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Tuesday, June 17, 2014

What to Do (and Not Do) If You Win the $400 Million Powerball Lottery

Another huge Powerball lottery is on the way to making someone a sudden master of a new empire. The Powerball drawing for Wednesday, February 19, is now up to massive sum of $400 million in annuity value. An all-cash payout value is listed as $227.8 million.

The Powerball jackpot starts at $40 million, and it keeps rising until someone hits the jackpot. The question to ask, outside of whether you should really be playing, is what you should do if you win the lotto.

24/7 Wall St. has created a 12-step lottery winner program that is a bit more extreme than other lists of things to do if you win. Technically, it is a list of what not to do. The items covered include protecting yourself immediately, getting the proper advice in planning and in taxes, some things like what not go splurge on, and many more items.

Coming into vast sums of money this size is instant dynasty money, which should last for multiple generations ahead. Believe it or not, many lottery winners have ended up broke within just a few years of winning. We would not wish that on you, but without proper planning lotto winners put themselves in a serious predicament.

Here were the statistics from the February 15 Powerball lottery:

0 PA winners, jackpot rolls to $400,000,000 1 PA player matched 5 of 5, each receiving $1,000,000 3 PA players matched 4 of 5 and the Power Ball, each receiving $10,000 164 PA players matched 4 of 5, each receiving $100 231 PA players matched 3 of 5 and the Power Ball, each receiving $100 7,418 PA players matched 3 of 5, each receiving $7 3,491 PA players matched 2 of 5 and the Power Ball, each receiving $7 19,964 PA players matched 1 of 5 and the Power Ball, each receiving $4 38,295 PA players matched the Power Ball, each receiving $4

Monday, June 16, 2014

3 Stocks Rising on Unusual Volume

>>5 Stocks Poised for Breakouts

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

>>5 Huge Stocks to Trade for Huge Gains

With that in mind, let's take a look at several stocks rising on unusual volume recently.

Agios Pharmaceuticals

Agios Pharmaceuticals (AGIO), a biopharmaceutical company, focuses on the development and commercialization of therapeutics in the field of cancer metabolism and inborn errors of metabolism in the U.S. This stock closed up 5.9% at $47.50 in Friday's trading session.

Friday's Volume: 566,000

Three-Month Average Volume: 409,914

Volume % Change: 50%

From a technical perspective, AGIO spiked sharply higher here right above some near-term support at $42.50 with above-average volume. This move pushed shares of AGIO into breakout territory, since the stock took out some near-term overhead resistance at $47.47. Shares of AGIO are now quickly moving within range of triggering another major breakout trade. That trade will hit if AGIO manages to take out some key overhead resistance levels $48.94 to $48.98 and then once it clears its all-time high at $49.79 with high volume.

Traders should now look for long-biased trades in AGIO as long as it's trending above some near-term support at $42.50 and then once it sustains a move or close above those breakout levels with volume that this near or above 409,914 shares. If that breakout gets underway soon, then AGIO will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $55 to $60.

Myriad Genetics

Myriad Genetics (MYGN), a molecular diagnostic company, focuses on the development and marketing of predictive medicine, personalized medicine and prognostic medicine tests primarily in the U.S. This stock closed up 3.4% at $35.02 in Friday's trading session.

Friday's Volume: 2.27 million

Three-Month Average Volume: 1.67 million

Volume % Change: 50%

From a technical perspective, MYGN spiked notably higher here right above some near-term support at $33.40 with above-average volume. This spike higher on Friday is quickly pushing shares of MYGN within range of triggering a near-term breakout trade. That trade will hit if MYGN manages to take out some key overhead resistance levels at $36.06 to its 50-day moving average of $37.16 and then once it clears more resistance at $38.32 with high volume.

Traders should now look for long-biased trades in MYGN as long as it's trending above some near-term support levels at $33.40 or at $33.25 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.67 million shares. If that breakout starts soon, then MYGN will set up to re-test or possibly take out its next major overhead resistance levels at $42 to its 52-week high of $42.50.

AMAG Pharmaceuticals

AMAG Pharmaceuticals (AMAG), develops and commercializes specialty pharmaceutical products. This stock closed up 7.2% at $19.31 in Friday's trading session.

Friday's Volume: 603,000

Three-Month Average Volume: 443,202

Volume % Change: 50%

From a technical perspective, AMAG soared higher here right off its 50-day moving average of $18.09 with above-average volume. This move pushed shares of AMAG into breakout territory, since the stock took out some key near-term overhead resistance levels at $18.79 to $19.08. Market players should now look for a continuation move higher in the short-term if AMAG manages to clear Friday's intraday high of $19.31 with strong upside volume flows.

Traders should now look for long-biased trades in AMAG as long as it's trending above its 50-day at $18.09 or above more near-terms support at $17.50 and then once it sustains a move or close above $19.31 with volume that's near or above 443,202 shares. If that move gets started soon, then AMAG will set up to re-test or possibly take out its next major overhead resistance levels at $21.75 to $22.74, or even $23.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

Aldoxorubicin: The Drug CytRx Investors Should Be Watching

CytRx Corporation's (NASDAQ: CYTR ) oncology drug, aldoxorubicin, an improved version of the chemotherapeutic agent doxorubicin, recently received FDA approval to extend the dosing in a Phase 3 clinical trial. This trial is evaluating aldoxorubicin as a second-line treatment for soft-tissue sarcomas (STS). In April 2013, the FDA granted Special Protocol Assessment (SPA) to aldoxorubicin as a second-line treatment for STS with a maximum dosing of six cycles. The drug is given by a 30 minute IV infusion once every three weeks which is one cycle. The extension of the treatment cycle was based on aldoxorubicin's superior cardiac safety and efficacy profile compared to doxorubicin in prior studies. Aldoxorubicin was found to be safer than doxorubicin, a toxic drug associated with side effects such as cardiovascular events and heart damage in cancer patients. The extended dosing could allow CytRx to demonstrate even higher progression-free survival (PFS) efficacy results compared to the Phase 2b trial for advanced STS with this drug. The company plans to initiate the Phase 3 trial during the first quarter of 2014.

Superior efficacy in phase 2b trial
In December 2013, CytRx reported Phase 2b trial results, which evaluated the efficacy and safety profile of aldoxorubicin compared to doxorubicin as a first-line treatment of metastatic and unresectable STS. Under the investigator assessment and central laboratory review, Aldoxorubicin demonstrated 80%-100% superiority over doxorubicin in regards to PFS.

The Phase 2b trial results were highly statistically significant. Aldoxorubicin demonstrated superiority in both the investigator led assessments as well as the blinded central lab review. The investigator led assessment determined that the PFS for aldoxorubicin patients was 8.4 months compared to just 4.7 months for those treated with doxorubicin. The central lab review determined that the PFS for aldoxorubicin patients was 5.7 months compared to just 2.8 months for doxorubicin patients.

On January 8, CytRx reported additional results of this Phase 2b trial. The additional data determined hazard ratios for the primary endpoint of PFS, which is considered as an important measure regarding the reliability and uniformity of the PFS data. CytRx's aldoxorubicin also provided superior results in a Kaplan-Meier analysis. These superior results are expected to support CytRx's quest to receive FDA approval.

Addressable Market for aldoxorubicin in STS
Aldoxorubicin has significant growth potential as a first- or second-line treatment to treat STS. There are approximately 50 types of STS, and roughly 40,000 new cases are diagnosed annually resulting in nearly 13,000 deaths in the U.S. and Europe. The results of the second-line treatment study for STS are expected by mid-2016, and the company anticipates filing the NDA by the end of that year.

The success of aldoxorubicin for treating STS could generate peak sales of around $340 million during its patent life as a second-line treatment. Further, aldoxorubicin is the first and only single agent that surpassed doxorubicin as a first-li! ne treatment for STS. This will provide greater opportunities if aldoxorubicin is approved as a first-line treatment for STS.

Aldoxorubicin's capability to treat GBM
On January 14, CytRx initiated a Phase 2 trial to evaluate aldoxorubicin for the treatment of unresectable glioblastoma multiforme (GBM), a deadly form of brain cancer. It is a stage 4 brain tumor, which affects more than 12,500 U.S. residents annually. In September 2013, CytRx received approval from the FDA for initiating this Phase 2 trial. In the multiple preclinical studies, aldoxorubicin was found capable of limiting GBM tumor cell growth in the brain without affecting healthy brain tissue. The preliminary results from this trial phase are expected during the third quarter this year.

Positive results from the Phase 2 trial will support CytRx in pursuing the rapid development of aldoxorubicin for unresectable GBM. This will also allow the company to file for the "breakthrough therapy" designation with the FDA, which is expected to expedite aldoxorubicin's marketing approval. This will enable CytRx to enhance its presence in the oncology drug market to treat GBM, and strengthen its financial position. The approval of aldoxorubicin for GBM could generate revenue of roughly $300 million during its peak sales period.

Opportunity for aldoxorubicin in treating other medical conditions
CytRx recently initiated a Phase 2 clinical trial for the treatment of HIV-infected patients suffering from Kaposi's sarcoma (KS), a common HIV-related tumor. CytRx will evaluate the preliminary efficacy and safety of aldoxorubicin in treating this indication. Currently, the standard-of-care drug for KS is liposomal doxorubicin-"Doxil." If the results are positive, CytRx plans to discuss with the FDA what they would require to file an NDA for Kaposi's sarcoma. The phase 2 results are expected during the second quarter of 2015.

If aldoxorubicin is successful in treating Kaposi's sarcoma, then it could capture market sha! re from J! anssen, a subsidiary of Johnson & Johnson (NYSE: JNJ ) , and , Sun Pharmaceutical, which is manufacturing the FDA-approved generic version of Doxil. Sun Pharmaceutical has a 50% market share of generic Doxil in the U.S. Furthermore, aldoxorubicin has opportunities in treating multiple indications, which include breast, ovarian, small-cell lung, multiple melanoma, and acute myelocytic leukemia. This will further strengthen its position in the oncology sector.

Conclusion
Aldoxorubicin, with its superior efficacy and safety profile, could be the blockbuster drug for CytRx. It will generate higher growth opportunities for CytRx and allow the company to deepen its footprint in the oncology space. In light of this, several analysts raised their price target on CytRx shares. The most recent upgrade came from Aegis, which raised their target from $9 to $12.

Since 2010, CytRx has built a state-of-the-art research and development program. CytRx's focus on R&D to develop aldoxorubicin will help enhance the company's future growth prospects. Further, the positive results of aldoxorubicin in future studies will significantly increase shareholder confidence and boost the company's valuation.

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Google grants Chairman Schmidt another $106M

The rich get even richer.

Google Chairman Eric Schmidt will receive a stock award valued at $100 million, plus a discretionary cash bonus of $6 million, the company said in a Tuesday filing.

Forbes ranked Schmidt among the world's wealthiest in 2013, with a net worth of about $8.3 billion, largely from his stake in Google. Even with Wall Street's recent slide, Google shares, which closed Tuesday at $1,138.16, are up nearly 50% from their 52-week lows.

Google's board said its compensation committee awarded the stock grant and cash "in recognition of (Schmidt's) contributions to Google's performance in the last fiscal year.

The stock vests over a four-year period, beginning in 2015.

Schmidt, 58, was CEO of the Internet search giant until 2011, ending a 10-year run, when he was named executive chairman. At the time, Google awarded him compensation valued at $101 million.

At many companies, the role of chairman is mostly part time and an advisory role. And rarely is a board chair compensated so handsomely.

But Google said in last year's proxy that Schmidt "remains involved in key matters, such as major transactions, broader business and customer relationships, and government relations, which are increasingly important given our global reach."

"His role enables decisive leadership, ensures clear accountability, and enhances the ability to communicate our message and strategy clearly and consistently to our stockholders, employees, customers, and users,'' the company said.

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Sunday, June 15, 2014

If You Like Vringo, You'll Love This IP Company (VRNG, ENIP)

To anybody who happened to have a position in Vringo, Inc. (NASDAQ:VRNG) prior to Wednesday of last week, congratulations - your trade is now up somewhere around 25%, as VRNG essentially won the second part of its big-Kahuna court case it had been fighting. Score one for the art of defending a patent. Well, if you liked the outcome of the Vringo trial - and if you have a newfound appreciation for the intellectual property business model - then you're going to love a smaller but perhaps more potent company called Endeavor IP Inc. (OTCBB:ENIP).

The contrasts between ENIP and VRNG are plentiful. Endeavor IP is a $20 million organization, whereas Vringo sports a market cap of $330 million. VRNG owns hundreds of technology patents, while ENIP only owns three. Vringo owns patents that are geared around consumer technologies, while Endeavor IP Inc. owns patents that are more utilitarian in nature. Yet, there's one key similarity that makes Endeavor IP Inc. just as compelling as Vringo, Inc.... Endeavor has at least one patent (though probably at least one more) that's been proven to hold water. And for any intellectual property name, one patent is plenty to get the ball rolling. [For perspective, though Vringo has successfully spurred injunctions against a cell phone manufacturer for patent infringement, the meat of its value and buzz in its David-and-Goliath case against a handful of the web's titans was successfully fought on the grounds of just one search patent.]

So what, exactly, does Endeavor IP "do" that makes it money? Ever heard of smartmeters? Simply put, a smartmeter is how your utility company reads your meter remotely, rather than sending a guy out to your house to put eyes on your meter's dials. Usually it's done with cell phone technology. It's still not as common as physically reading a meter, but it's an idea that's quickly gaining ground, in that it saves time and money. Well, a couple of Endeavor's patents give it rights to royalty payments from utility companies using smartmeters.

And just for the record, this isn't a theoretical right. While ENIP is currently litigating or planning litigation against five different companies for patent infringement, four other companies have agreed to a royalty payment without even bothering to go through a trial. Given such a strong anti-IP pushback we've seen from infringers of late, the fact that several would-be defendants didn't even bother to make their case in a courtroom speaks highly of the patent in question, and bodes well for Endeavor IP Inc. with its other five pending cases (cases which could still be settled before trials begin).

No, ENIP isn't going to be the next VRNG, if for no other reason than its size. Then again, Endeavor IP doesn't have to be the next Vringo. It's less than a tenth the size of the bigger IP company, so victory in the courtroom - or before a court case becomes necessary - is shares among a much smaller user base. Moreover, with Endeavor's preference for buying quality patents rather than a large quantity of patents, that cost-effective focus should allow the company to grow its enforceable patent portfolio into something quote powerful.

Bottom line? With little left but a royalty calculation and what's probably going to be a failed appeal from the defendants, it's time for VRNG fans to start thinking about their next patent portfolio play. ENIP is definitely worth a look.

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