December 5, 2024
Hewlett Packard (HPE) Earnings
Today after the close Hewlett Packard (HPE) will report earnings. Headed into the event we are holding two-thirds of a position, having taken a partial loss on the first third of our trade.
This is an interesting set-up headed into earnings …
On the one hand, the stock has been shaping up for sure, and it was upgraded this morning ahead of the announcement.
On the other hand, HPE stock has hardly been a rocket ship like many of its tech peers.
Essentially, let’s see how the stock reacts to earnings tonight, and if the reaction is good, we will keep the trade, and if it’s not, we will likely sell.
HPE - With the stock trading at 22, the options market is pricing in a move of $2 this week, or 20 to the downside and 24 to the upside.
Open interest is skewed bullish on a ratio of 2:1 call vs. put.
Skew is pricing in typical downside fear and upside interest.
December 2, 2024
Weekly Update
The holiday-shortened week yielded more gains for the leading indexes as traders ready themselves for the close of 2024. Here is how our positions performed last week:
Robinhood (HOOD) January 15 Call – HOOD continued its monster run last week as the stock gained another 7%, and was also upgraded by Morgan Stanley which noted:
“Shares attractive at 10x EV/Sales, with 50% upside to new 55 PT. HOOD among the biggest beneficiaries of the election results in our coverage; potential deregulation enables HOOD to participate more aggressively in crypto.”
Our calls are now at a potential profit of approximately 735%.
Corning (GLW) May 47 Calls – GLW gained 2% last week and is slowly inching back towards its recent highs. Essentially, it “feels” like the stock is fine, but because it has run a bit on the back of the AI theme, which has cooled off of late, GLW is stuck in the good but not amazing category.
Hewlett Packard (HPE) January 22 Calls – HPE was at its recent highs on Tuesday before several of its peers fell hard on earnings that night. My patience with this position is running out, though the company will report earnings this Thursday.
Marijuana ETF (MSOS) – As I said last week, the MSOS continues to look dreadful post-election and my patience with this position is starting to run out as I’m not going to sell a new 5 strike call for pennies.
On Holding (ONON) January 42.5 Calls – ONON broke out to a new high last week as retailers showed signs of strength. Our calls are now at a potential profit of approximately 155%.
Oracle (ORCL) March 160 Calls – ORCL had its first somewhat bad week in a while as the AI theme came under pressure. Regardless, I think the stock looks great and our calls are now at a potential gain of approximately 100%.
Palantir (PLTR) January 26 Calls – PLTR broke out to a new high last week following an upgrade from Wall Street firm Wedbush which raised its price target on the shares to 75, up from 57.
Our calls are now at a potential profit of approximately 785%
Occidental Petroleum (OXY) March 52.5 Calls – Every time I get my hopes up for OXY, the stock seemingly falls back towards the 50 level, which is not ideal. My patience is starting to wear thin on this trade, though our calls do have four months until expiration.
Rocket (RKT) March 20 Calls – RKT got off its knees a bit last week as the bond story finally switched gears. We have a long way to go when it comes to RKT, though I will say option activity heated up in the stock as it rallied.
Walmart (WMT) January 65 Calls – Another week, another new high for WMT as the stock looks absolutely fantastic. Our position is now at a potential gain of approximately 535%.
Financials ETF (XLF) June 50 Calls – The XLF broke out to a new high last week as the Financials have been leading the market higher of late. Our calls are now at a potential gain of approximately 30%.
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