Daily Stock Market Equity and Options Trading Commentary

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Sunday, January 11, 2009

Stocks I'll Be Keeping My Eye on for the Week Ahead

I usually don't post on the weekends, but since this week will be chaotic for school/work I decided to post tonight. I have been keeping my eye on TNA which is from the same ETF company who puts out the BGZ stock I trade. TNA is an ETF that invests in small cap stocks and seeks a return of 300% of the entire basket. This means when the basket of small caps goes up/down 1% the ETF will move with it 3% (not an inverse fund). This stock is around $30 and I might try to sell puts (25 strike) if I can't get my order filled, otherwise I may put orders in for the $26-$29 range. Small caps outperform mid and large caps over the long term (reason being they have a lot of room to grow) which is why I like this name, not to mention I need some exposure to some small caps. Remember this fund is almost double of its 52 week low, and it could reach that level again which is why I will put orders in to fill on the way down. This stock is extremely volatile which makes it even better (greater premiums) for writing covered calls on. The first day I am more than 5% unrealized gain on this stock I will look to write some covered calls out of the money.

Another name I wil be watching is Citi. I think if this stock gets beat down over bad news it could be a good chance to pick some up. If this stock gets to the $5-$6 range and then some decent news comes out about them, a 20% move could be as easy as 1 day! I really don't need any exposure to financials therefore I would strictly be buying light blocks of this stock with intention to trade within 72 hours.

Another ETF I like is the inverse of SDS or the pro S&P double up fund SSO. If the S&P is down 90 points or more (or close to 10%) anytime during the week, I will be trying to purchase some shares os SSO (a close to 20% decrease in the value of SSO). This stock moves with the S&P 2 to 1 so if the S&P goes up 1% this ETF goes up 2%, if the S&P goes down 2% this ETF will go down 4% etc...

These are some name I will be watching for the week of January 12.

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