Take Monday and turn it on its head. There. Analysis for the day is done.
All right, it's not that simple -- especially since beta names are moving fairly well today without the Russell 2000 joining in. One name that doesn't really fit into the beta group per se is Gogo (GOGO). I had high hopes for this one earlier in the year, but the stock has really failed to live up to expectations. I've traded in and out of the name several times, but not to the benefit of my bottom line.
AT&T (T) is stepping into the fray of in-flight WiFi, which has weighed on the stock. Two things have made me grow a bit more optimistic on GOGO now that the T news is priced in, though. First, T isn't jumping into the fray until mid to possibly late 2015, which gives GOGO a lot of lead time to further cement itself or possibly strike a partnership of its own. Second, T is going to be distracted by the DirecTV (DTV) merger. In-flight WiFi is going to take a developmental back seat. Also, I wouldn't lightly dismiss an insider purchase of 100,000 shares here as well.
The GOGO chart shows an attractive risk-reward opportunity. We are on the verge of price pushing into the gap with a clearly defined stop. If price can push just a little higher, we should see the Relative Strength Index (RSI) move above 50. Upside looks to be around $17 with $13.35 as the downside stop. That is risking around $1.40 to possible make $2.25, and $17 is just the initial target as $18 looks possible as well.
Salesforce.com (CRM) reports earnings after the close and hasn't been much of a mover the last two reports, opening almost flat. The stock has moved during the day, though less than its implied move after two of the last three reports. Into earnings, buying or selling straddles looks like too much of a coin flip. For straddle or strangle sellers, I would close that at the open, win or lose. There has been too much movement intraday to try to ride them into the close. A pre-earnings plays I would focus more upon is something like a butterfly that begins 5% out of the money and has legs about 2.5% apart, so something like a weekly $51.50-$50-$48.5 put spread, or $56.6-$58-$59.50 call spread for $0.17 to $0.25, with the put side slightly more expensive.
The better trade on CRM seems to be the follow-through on the opening move. A lower open has been good for a continued move lower and a higher open has been good for follow-through to the upside. The last three reports have been worth a 5% follow--through from the open, so it's certainly worth noting. I prefer to wait until late in the day for the butterflies so that my prices can encompass the full day's time decay, and the legs of the trade can be as close as possible to that 5% target.