Search

Is it time to lock profits on BHP and sell some options?

Good Morning,

So what happened last night?

US stocks closed higher (Dow Jones +42 points), following weaker US oil production, sending Crude to the highest level in over 4 months…

This is good news, as a rising oil price, is usually strongly positively correlated with economic growth…….

“There’s been no bearish catalyst that’s surfaced to really knock things down and earnings are spilling in and going as expected,” said Nick Kalivas, senior equity product strategist at Invesco PowerShares in Downers Grove, Illinois, which has about $100 billion in its funds. “We’re now a couple of heartbeats off the all-time high and that’s creating performance anxiety among fund managers, causing people to think the picture’s not as glum. It’s keeping an underlying bid in the market.’

In OZ, we saw a weaker than expected production report in BHP drove its shares above $20.00….

PEAK ACTIVE has been long BHP and it is now time to lock some profits, or write $20.00 calls, to generate some premium…

For those interested in generating income by selling options (known as covered call strategy), please be in touch.

The main catalysts for the market over coming days will be US earnings (where EPS growth expectations are only at 2.3% vs 9.2% this time last year)

What does this mean?

It means that analysts’ expectations are low, so the likelihood of positive earnings surprises is much higher….

The SPI is up 7 points this morning.

Add your comment

BNIQ sponsored byECU School of Business and Law

Students

6th-Australian Institute of Management WA20,000
7th-Murdoch University16,584
8th-South Regional TAFE10,549
9th-Central Regional TAFE10,000
10th-The University of Notre Dame Australia6,708
47 tertiary education & training providers ranked by total number of students in WA

Number of Employees

BNiQ Disclaimer