Profitting On Both Sides, Again! BIDU, TSL, FSLR, INTC, POT, CF, AGU, TRA

Even though the market indices ended higher today, the individual sectors produced mixed results.  We saw pockets of strength here and there, but, also some weak areas.  Miners were mostly weak, perhaps still lingering on AA’s earnings report.  Solar stocks were up in the morning, but, did a big reversal in the afternoon when news came out to say that Germany will slash its solar feed-in tariff incentive program by 16% to 17%.  We started to comment on the action in our Trading Room as the reversal happened: 

HappyTrading January 14, 2010 9:56 AM
solars
did a reversal from this morning, any news?

HappyTrading January 14, 2010 9:57 AM
TSL
coming down fast…

HappyTrading January 14, 2010 10:29 AM
FSLR
coming down fast… 130 puts day low $0.38, now $3+

MauraK January 14, 2010 10:31 AM
FSLR - Germany, the world’s top solar market, announced it would cut supports for the renewable energy source.
First Solar which has a manufacturing site in Germany and made 60 percent to 70 percent of its sales there last year.

So, we traded puts on TSL and FSLR.  I got into TSL 55 puts and profitted a gain of +67% in 5 minutes, in at $1.8 and out at $3:

Other members went in on the FSLR 130 puts:
billbigd January 14, 2010 12:58 PM
FSLR-should be weak tomorrow, but it is still a sexy sector. SO I am OUT $3.5 to $5.6 (a +60% gain)

We also continued to trade the upside on BIDU as it ran up another $25 today!!  Yesterday, in our Trading Room, I said,
January 13, 2010 12:29 PM
BIDU
… breaking $440, this should get a new leg up…

BIDU wobbled into the negative territory at open, but, soon crossed the $440 mark; and… the race was on!!  It jumped $10 to $450 in less than 15 minutes!  I scrambled to get into the 430 calls as it shot up higher.  I finally got my order filled at $19.5 and out at $22 in a matter of minutes for a +13% gain, or $2.5/contract.

BIDU then took a breather around $450.  I pointed out to our members that it could shoot up to $460.
January 14, 2010 7:56 AM
BIDU
hanging above $450, hourly chart toppy…

January 14, 2010 7:57 AM
BIDU
a quick pop could still take it to $460 though…
 
January 14, 2010 8:01 AM
BIDU
scalped $2.5 on the 430s… wait to see if $450 can be broken…

As BIDU pushed above $450, I entered a second trade, this time with 440 calls.  Each time I raised the strike as the stock pushed higher, I was risking less and less, basically pocketing my gains and only risking the house money (see explanation from yesterday’s article).  I got in at $14.8 and exited at $19.5 for a +32% gain in less than 1 hour:

(These trades were only discussed in the Trading Room.  During options expiration week, trades can happen really fast, not really suitable for our audience following through Email Alerts.  So, we have many trades that are only meant for members who are actively trading on the site.  There are other trades that are further out in their expiration published through the alerts.)

Like I said yesterday, "The market can be volatile, especially during the expiration week.  Try not to get stuck in your opinions or logic.  If you stay nimble and allow the trades to come to you, you can often find profits on both sides!"  Today, we played the upside on BIDU and downside on TSL, and pocketed very nice profits from both.

I see a lot of people arguing about where the market "should" go next.  People can often get very argumentative, with a lot of "reasoning".  I find it best to just allow the market to show you where it wants to go.  Often, the people who try to argue the most become too stubborn to change their views when the market goes the other way.  Arguing won’t make you money!  Well, I guess some people do.  Some people get paid to argue!  LOL!  The question is:  do you know who to listen to?!  If you don’t, you might want to consider reading my Market Forecast each week.

After the market, INCT reported earnings that easily beat the estimates and gave bullish guidance.  Its stock, however, only went up slightly after pushing above $22/share initially.

Elsewhere, CF stock jumped to nearly $100/share, up +6.78% in after-hours, on the news that it had withdrawn its offer to buy TRA.  On the other hand, AGU is still trying with its bid to buy CF!  AGU and TRA both trailed lower after the news.

JPM will reported tomorrow morning before the market opens.  So, stay nimble and wait for the trades to come to you.  Keep plenty of cash so you can act on opportunities when they appear!

Good night and HappyTrading! ™