Jim Cramer Blog

Here are 7 trading ideas for today. These lists come directly from the TradingMarkets Stock Indicators page and are based upon our latest quantitative research.
Bullish
5+ Consecutive Down Days: These are stocks that have closed down for five or more consecutive days and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving average that close down for five or more days have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge. Historically, these stocks have provided traders with a significant edge.
Alberto-Culver (NYSE:ACV) & Eaton (NYSE:ETN). ACV's PowerRating is 7, and ETN's PowerRating is 6.
5+ Consecutive Lower Lows: These are stocks that have made a lower low for five or more consecutive days and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving average that make lower lows for five or more days have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
CVS Corporation (NYSE:CVS) & Diamonds Trust (NYSE:DIA). CVS's PowerRating is 6, and DIA's PowerRating is 6.
2-Period RSI Below 2: These are stocks that have a 2-period RSI reading below 2 and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving with a 2-period RSI reading below 2 have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Sony (NYSE:SNE). SNE's PowerRating is 7.
Bearish
5+ Consecutive Up Days: These are stocks that have made a higher high for five or more consecutive days and are trading below their 200-day moving average. Our research shows that stocks trading below their 200-day moving average that make higher highs for five or more days have shown negative returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Dr. Reddy's Labs (NYSE:RDY). RDY's PowerRating is 3.
5+ Consecutive Higher Highs: These are stocks that have made a higher high for five or more consecutive days and are trading below their 200-day moving average. Our research shows that stocks trading below their 200-day moving average that make higher highs for five or more days have shown negative returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Komag (NasdaqGS:KOMG). KOMG's PowerRating is 2.
PowerRatings (for Traders) are courtesy of TradingMarkets.com

Labels: ACV, CVS, DIA, ETN, Hot Stocks, KOMG, RDY, SNE

It was a little scary at first: we had our nice puts to protect us, but by 9:45 we were already switching to Diamonds Trust Series 1 ETF (AMEX: DIA - News) $124 calls as the market began to turn.
We picked up a lot of bargains (we hope) on the morning dip and dumped a lot of oil positions as that sector took off on us. At 9:58 I said about the oil sector: "A 1.66% bounce is expected and meaningless," and the Oil Service HOLDRs ETF (AMEX: OIH - News) closed up 1.56%, Energy Select Sector SPDR ETF (AMEX: XLE - News) closed up 1.7% and the OGX closed up 1.39% so no worries there either!
We held almost every single one of our levels!
The Dow took a neat bounce right off 12,400
Transports missed by 2,580 by 1.41
The S&P went above and beyond at 1,425
The NYSE came out of it's coma and flew to 9,140
The Nasdaq also made a remarkable recovery ending at 2,430
No help from the SOX, who dropped all the way to 469 (still not good!)
The Russell actually did pull out of its power dive >right at 775!

All in all the day was quite a relief and we took a few more off the table and opened a few new positions:
Cramer is on about Adobe Systems Inc. (NASDAQ: ADBE - News) being unfairly sold off and he's absolutely correct! This is a great stock being given away for $41.45. I was hoping to see it test the 50 DMA at $40, but with Cramer on the case this might get away from us. I like the Apr $45s for $1.75 but I will sell the Feb $45s if they get close to giving me my money back!
We lost the rest of the American Express Company (NYSE: AXP - News) Jan $60s at $2.50 (up 127%).
ConocoPhillips (NYSE: COP - News) Jan $70s stopped out even at .80. We picked up the $75 calls for $1.25 to cover our remaining puts and they finished the day up a dime.
Chevron Corp. (NYSE: CVX - News) Jan $70 puts stopped out even at .30.
eBay Inc. (NASDAQ: EBAY - News) Jan $32.50s were added at $1.10 (I wasn't as quick as Soccer!).
I took the FedEx Corp. (NYSE: FDX - News) July $120s for $7 and sold the Jan $115s for $3.50 -- a last minute change of plan!
Corning Inc. (NYSE: GLW - News) seemed cheap with the May $20s at $1.60.
We played Google Inc. (NASDAQ: GOOG - News) $490s from $5.40 to $6.70 (up 24%) but lost .50 of that gain on the Jan $430 puts from $4 to $3.50.
Intel Corp. (NASDAQ: INTC - News) $20s were entered at $1.05.
Marathon Oil Corp. (NYSE: MRO - News) $90 puts were initiated at $1.20 but I expect to take a DD closer to .60!
I sort of doubled down on the NASDAQ 100 Trust Shares ETF (NASDAQ: QQQQ - News) $45s but I took the closer quarterlies for .10!
Toll Brothers Inc. (NYSE: TOL - News) Jan $32.50s were taken off the table at $1.65 (up 32%) ahead of earnings as it wasn't worth the risk.
Energy Select Sector SPDR ETF (AMEX: XLE - News) $59 puts were another victim of the oil pump at .90 (up 38%).
ExxonMobil Corp. (NYSE: XOM - News) $72.50 puts were taken out at .50 (up 25%) and the $75 puts were cut off at $1 (up 18%).
By Phil Davis

Labels: ADBE, AXP, COP, CVX, DIA, Ebay, FDX, GLW, GOOG, INTC, MRO, OIH, QQQQ, TOL, XLE, XOM

I stopped out of my Diamonds Trust Series 1 ETF (AMEX: DIA - News) $122 puts at .55 (up 57%), DIA $123 puts for $1 (up 67%) and NASDAQ 100 Trust Shares ETF (NASDAQ: QQQQ - News) $44 puts at .70 (up 133%) on the upturn (as I was enthusiastic). But then, as I was left unprotected, I let myself get shaken out of a some calls on the turn down.
We finished up the week with a bang, and we've had a streak of good calls, but I don't delude myself that I am either Lou Gehrig or Joe DiMaggio, and you never know when your luck will turn, so I took a lot off the table into the weekend (and I was very spooked by the mornings whiplash move!):
American Express Company (NYSE: AXP - News) Jan $60s hit our price and seemed safe on the way up at $1.30.
Bank of America Corp. (NYSE: BAC - News) was a no-trade, opening too high.
Best Buy Co. Inc. (NYSE: BBY - News) Jan $52.50 was very tempting back at $3 today but I wasn't feeling that adventurous (we just sold them for $4.30 on Tues!). I regret not rebuying now since I went to one last night (Fri) and it was a zoo!
Boston Scientific Corp. (NYSE: BSX - News) Jan '08 $17.50s still aren't moving (still $2.50) but I'm considering additional positions at this price and selling the Jan $17.50s for .50 as an income producer as 20% a month is a pretty good income! I should probably just do it with the ones I have but I really think this thing's going to bounce back at this point -- which is what I'm sure the 83,000 January callers are thinking too...
We added the Chesapeake Energy Corp. (NYSE: CHK - News) Jan $32.50s for $1.05 (yes calls) as additional cover to protect profits over the weekend on our remaining oil puts.
I shorted more ConocoPhillips (NYSE: COP - News) out of principal with the Jan $70 puts at $1.85, but a big spike scared me into selling the $70 puts for .65 as a small cover.
DALRQ (Delta Air Lines) Jan '08 $2.50s jumped up a dime to .20 (up 300%) so I took half off the table. As I said at the beginning, these could end up worthless so effectively the remainder is a free ride with a year to play out.
eBay Inc. (NASDAQ: EBAY - News) Dec $32.50s were taken off the table at .45 (down 25%) as it looked too weak to keep after the Cramer pump and yesterday's drop were just not worth holding with expiration looming. We still have the Jans and a hopeful attitude!
Corning Inc. (NYSE: GLW - News) Feb $22.50s came in at .80 but if they can't break $21 I'm out quick!
I don't know why Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR - News) went down all day, and I didn't stick around to find out -- so I gave up at $52 (up 25%).
It looks like I will get called away by those Google Inc. (NASDAQ: GOOG - News) $370s I sold for $40 with a just a 21% profit (the other guy has a triple!) 8-(
Intel Corp. (NASDAQ: INTC - News) finally came off the watch list as I said at 10:01 (with the stock at $20.61) "Watch out for INTC -- they can save the SOX by themselves with a .25 gain." I grabbed the Jan $22.50s for .25 and the stock did go up to $20.85 but pulled back to finish at $20.68.
Jos. A Bank Clothiers Inc. (NASDAQ: JOSB - News) served it's purpose (getting a discount on the Jan $30s) and we took out our July $30 caller for $4.50 (up .10) and sold the stock for $30.50 for a $1.11 total gain, so I'm applying the $1 credit (allowing for commissions) to the Jan $30 puts (that were all I ever wanted in the first place) to lower the basis to a very nice $1! I was thrilled to be able to take out of the Julys after earnings got away from me. It is very important to remember why you took a position (one of the reasons I first started keeping a blog!), as I said on Monday, "the options are outrageous and I refuse to pay for them -- so I'm going to let someone else buy them for me: I take the stock for $29.69, sell the ridiculous July $30s for $4.40 and buy the Jan $30s for $1.75." Mission Accomplished!
Eli Lilly & Co. (NYSE: LLY - News) Apr $55s came in at $2, hopefully we didn't jump the gun on this but they were $2.50 on Tuesday...
Yes, I'm a MOToholic (Motorola Inc. (NYSE: MOT - News))! I picked up the Jan $22.50s for .40, which they held despite a poor finish.
Microsoft Corp. (NASDAQ: MSFT - News) took a huge jump at 2:30, I think because there was a court decision cracking down on software fraud that should net them a healthy profit boost right when Vista is coming out. A huge buy was made at the close for $20.40 so we may need to get on the Mo train on Monday!
got scared out of Netease.com Inc. (NASDAQ: NTES - News) Mar $17.50s at $2.15 (up 16%) on the morning drop.
We focused on the Oil Service HOLDRs ETF (AMEX: OIH - News) $145 puts right out of the gate and picked them up on the turn at $1.20, stopped half out quickly at $1.55, reducing the remaining basis to a comfortable .85, and took them off the table at $1.20 ( up 41%). We went back in about 90 minutes later for $1.20 again (what the heck, it worked once) and I kept half at close to reduce the remaining basis to $1.
optionsXpress Holdings Inc. (NASDAQ: OXPS - News) Jan $30s pushed me out in the morning for .90 (down .10) but rebounded very nicely once I was gone!
Research In Motion Ltd. (NASDAQ: RIMM - News) bounced back up and triggered the sale of the other half of the Jan $130 puts for $9.80 for a $9 average sale and a $1 spread on the full trade!
Suncor Energy Inc. (NYSE: SU - News) $80 puts were picked up for $1.40 but I got out even (too many puts for safety). They finished at $1.70 for those who stayed in.
I was stopped out of Toyota Motor Corp. (NYSE: TM - News) Jan $120s at $2.55 (up 34%).
We decided a double was too much to risk on the Valero Energy Corp. (NYSE: VLO - News) $55 puts, exited at .90 (up 100%).
At 9:53 I said, "If this is the best XOM can do on an .80 rise in crude it may be time to sell those calls already!" I was right, but I held on to them for the protection over the weekend, which allowed me to hold puts through the dips.
I cannot believe I'm saying this (after 2 months of rolling and doubling) but I took the rest of the XOM $75 puts off the table at .65, up 141% (because we applied the profit from the first half to the basis on the remainder)! Remind me never to do that again -- way too stressful... Interestingly, despite the drop, my protective Apr $80s went up .20 to $2.45, as I said when we bought them, "I think these will be slow to fall (look how many die hard oil bulls there are)."
In summary, we closed 30 positions this week (including 12/1 because of the month roll) for an average gain of 70% on a low average hold of 6 days as we've taken a lot of day trades in this choppy market.
The only losers were EBAY, Las Vegas Sands Corp. (NYSE: LVS - News) and OXPS, and none of them hurt too bad, and we had 9 doubles out of our 27 winners.
Our open portfolio is in spectacular shape with 51 open positions that are already also up 70% after 17 days(average). This of course includes ridiculous gains by DALRQ (400%), MGM Mirage (NYSE: MGM - News) (631%) and Station Casinos Inc. (NYSE: STN - News) (1,375%), and eliminating those gains brings us down to 40%, but then I should eliminate my 3 wipeouts as well which would bring us back to a more realistic 45% -- but that's still pretty darn good!
-Phil Davis

Labels: AXP, BAC, BBY, BSX, CHK, COP, DIA, Ebay, GLW, GMCR, GOOG, INTC, JOSB, LLY, MOT, MSFT, QQQ, RIMM, stock options