Friday 28 January 2011
After the vicious battering we have experience today, with the Dow Jones tumbling 166 points, the S&P dropping 1.8 % and the NASDAQ getting hammered by 68 points, investors are starting to worry. Several events collapsing at the same time, including Egypt crisis, Ford and Amazon disappointing earnings report. Ford missing by 12 cents analyst earning estimates and Amazon, way below expectation contributed to the Market downfall, despite Q4 encouraging GDP report showing economic growth picking up to 3.2 percent.
Like it or not, Egypt revolution does get priced into stocks, and if protest keeps on next week, stock prices will continue to get pounced. So keep your eye out, because great bargains can be found on this type of weakness in the stock market as we go into so many earnings report next week.
Out of all the earnings reports for next week, pay close attention to (IP) International Paper Company , who reports earnings on Thursday 3 feb 2011. anticipation is on the rise and buying a deep in the money call on Monday morning – the 25 Feb call – can be a good opportunity to take advantage of the weakness in the market.
however, if market keeps going down because of Egypt turmoil, it would be wiser to offset the bidding price by waiting as stock may continue to fall. in this case, timing is everything and maybe buying into this Call, on Tuesday or Wednesday can become more profitable.