Paper bought 2444 KMX April 40 Calls for $1.15 (5.1 times usual volume) when stock was trading $37.55 
Paper sold 1400 BP Feb 50 Puts for $6.20 when stock was trading $44.27
Paper bought 8000 SBAC Feb 70 Calls for $1.60 (7.2 times usual volume) when stock was trading $70.11
Paper sold 15,000 ETFC Feb 10 Straddle for $.88 (8.8 times usual volume) when stock was trading $9.85
Paper sold 2000 TUMI Feb 20 Calls for $2.65 (20.3 times usual volume) when stock was trading $22

BIDU is best known for its massive share of the Chinese search market. Some analysts estimate that BIDU has over 80% of China search. This is arguably a function of America’s GOOG deciding to leave China because of an ethical dispute, but either way this is in the past and the market looks into the future. The future of search is perhaps in our hands…our mobile devices.  China’s massive population and technologically savvy culture demands efficient mobile devices. One of the most basic capabilities of today’s mobile device is the ability to search.

BIDU is estimated to own nearly 35% of the Chinese mobile search market. This is not much compared to normal search market share, but it is a start…a monopoly is not built overnight. BIDU is making efforts in order to further dominate this market; these efforts include the development of a mobile operating system and acquisition of specific smaller firms.

Credit Suisse recently downgraded BIDU. The call was essentially because the firm thought the risk of acquisitions would not be good for the stock. The rest of the analyst community is estimating that BIDU will make $7.40 this fiscal year. This estimate multiplied by the median PE (19x) puts BIDU at $140…about $30 of upside potential. One should not ignore the technical picture however. The 200 DMA is right above us and we are also extended, according to the channel.

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salerno.mark.a@gmail.com

The $500 level in AAPL is massive support. This area has been tested two times before and considering yesterday’s range (the prices AAPL traded at during the day) was low, maybe AAPL put in a short-term bottom. The average true range in AAPL over a 14-day period is $13.05; we were below this yesterday. Yesterday’s candle was also a doji; this may indicate that the sellers were unable to extend prices lower and confirm a short-term bottom thesis.

This action also puts us at an interesting risk/reward level. AAPL may rally about 6% to come back up to the hypotenuse of the triangle and test the 50-day moving average and the risk being a few bucks under $500. However with quarterly results coming up soon, all technical indicators may become irrelevant, as fundamentals will trump trading action.

The analyst community is currently estimating that shares will hit $734. EPS for the quarterly release in about 7 trading days is at about $13.50 and for the current year around $49.00. The median PE for next fiscal year is 10.5 and next year’s estimates are about $57.00.

Feel free to e-mail any comments, feedback, suggestions, or general inquiries to…

Author

salerno.mark.a@gmail.com‘