Your Adarsh™

Letz mint some ‘ka-ching’

*Bet on NMX before earnings.

NYSE: NMX

NYMEX Holdings, Inc , which is one of the youngest when it comes to publicly traded exchanges, has been in the business for more than 130 years.

No body will forget the spell it cast on the investors on its debut o the New York Stock Exchange. The first day trading between $120 and $152 marked its first day after coming public for just $52. (Even though the pop also was caused due to very low floatation.)

 The stock has since then been trading within the range it traded on the first day. Recent rumors on acquisition pushed it higher to break the resistance at the top. But, speculation on dilution of NYX on the acquisition, have pot restrains on the charts. The stock is now trading at the lower levels of its band. It reports earnings on Aug 1st. Though, the trading in the quarter has been sluggish, NYMEX has been setting record volumes daily for the last few days.

Analysts polled by Thomson Financial expect Nymex to report a profit of 58 cents per share on revenue of $163 million, which represents growth of 31 percent.

Adarsh expects NYMEX to report a profit of 63 cents per share on a revenue of $181 million, which represents growth of 45 percent. That gives us a growth rate much higher than expected.

Moreover, the buyout speculation and rumors would always be there with NMX, with which the stock would have a very strong support levels at the bottom.

Stochastics indicate an over sold stock. This is because the stock did not have a run up into the earnings, thanks to the weak market last week. This creates a great option to play the earnings, if you are interested, increasing the straddle to around 14.5%.

The bollinger gives a low of around 120 and a high of 142 which gives you a profit/loss ratio of around 18/4  i.e  9:2 which should be a very good trade.The 6.3% short shares should also help in the jump.

We already hold the stock. We encourage you to get some before the report.

Good Luck,

Your Adarsh

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July 30, 2007 - Posted by | Blogroll, Future Buys, Short Term

2 Comments »

  1. Adarsh,

    If you were to personally play NYX earnings using options, what call would be the most appealing to you?

    Comment by Mike | July 30, 2007 | Reply

  2. Mike, If I were playing calls on NYX, I would have bought calls last week. But, I think playing 85s don’t look bad. Even though we only have about 11 sessions left…it deosn’t look improbable, considering that we are coming right out of a bear market into earnings which should be a positive. But 85’s look a bit costly to me….may be you’ll get them much lower tomorrow morning if we open lower. Hope that helps.

    Comment by Adarsh | July 30, 2007 | Reply


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