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Guns and Planes: Take profits on S&W (SWHC:Nasdaq) and Boeings August 90 Calls (BAHR.X),

Posted May 7, 2008

“If you have been watching the equities market over the past week, you may have noticed the Dow is having trouble remaining over the 13,000 mark. While this may be purely psychological, it is a sign that we have reached the top. ” - Andrew Snyder

By Andrew Snyder

Baltimore (TFN)- It is hard to believe, but we are nearly half way through this trading year. It has been a heck of a ride. Over the last six months, the equities market has shot from one extreme to the other and back again. Nearly every day, Wall Street traders are taking us for a ride. For savvy investors, it is great news.

Remember, it does not matter which way the market is moving, as long as it is moving. The larger the swings, the better the profit opportunity. And profits are what I am here to write about.

Let’s make some money

Just two weeks ago, I wrote about the weakening dollar and its detrimental impact on French-based Airbus. Because of the euro’s relative strength against the American dollar, Airbus was forced to raise its aircraft prices. For it chief competitor, Boeing, this was fantastic news.

Seattle-based Boeing is currently celebrating a record-long order backlog and because its parts, labor, and planes are all bought with American dollars, the currency’s fall has actually had a hugely positive effect on the company. Its soaring share price proves it.

For those of you options investors that followed my advice and bought Boeings August 90 Calls (BAHR.X), you are enjoying gains of over 190%. Congratulations.

While there is plenty more room for share price appreciation, time decay will soon take over and the options will decline in value. Sell those options and bank the gains. If the market keeps swinging like it has been, you will have more shots at success with this company. I’ve got my eye on it.

How do you like those guns now?

Boeing is not the only company handing us profits. Back in January, I wrote about of Smith & Wesson’s moneymaking potential. Thanks to some savvy mergers and positive notes on gun control from the Supreme Court, the company’s share price has been on a tear since I discussed it.

I recommended you buy the company’s underlying stock when it was around $4.75. Right now, shares are trading for $7.15. If you followed my advice, your position is worth 50% more. Congratulations, once again.

I have been watching the stock for the last few days, hoping trading volume would jump back to the levels we saw last week. It has not happened, indicating shares may be as high as they are going to go for a while. I still don’t trust this market and thing we are in for a major drop, so sell your shares of Smith & Wesson Holding Corp. (SWHC:NASDAQ) now and get out on top.

If you have been watching the equities market over the past week, you may have noticed the Dow is having trouble remaining over the 13,000 mark. While this may be purely psychological, it is a sign that optimism is waning. First quarter earnings have been better than expected, but Q2 is going to be a killer. Be prepared to take short positions over the next few weeks.

All you have to do is keep reading. We will take care of the hard work.


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Posted by Andrew Snyder · Filed Under US Stocks and Markets 

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