Furthermore, Facebook has been constantly trying to revamp its services. On Wednesday, Facebook announced that it would be launching “verified pages” for celebrities and “high-profile” people. With this move, Facebook looks to draw in “a select group of people.” Of course, this is a nod to Twitter, which implemented this feature a while back and has fully capitalized on it since then.

For investors that expressed concern about the decline of younger users in recent months, the company has pointed at the fact that the people moving away from Facebook are simply switching to Facebook-owned social media such as Instagram. In a move to increase its mobile presence, Facebook has also agreed to buy Parse, a startup that helps companies create mobile applications.

Earlier this month, Facebook reported that earnings grew by 6.8% in the first quarter, beating analyst expectations by a healthy margin.

Facebook is currently trading above its 52-week low of $17.55 and below its 52-week high of $33.45. Shares are down 7.7% since the start of the year.

Shares of Clearwire closed at $3.48 on Wednesday and are now up 22% in early morning trading. Shares in wireless operator Clearwire rose to $4.18 in premarket trading after closing at $3.48 in the regular Nasdaq session. Share volume is at 20.61M, almost double the 30-day average. Clearwire is trading well above its 52-week high of $3.51 and its 52-week low of $0.83. Clearwire’s current market cap is at 2.43B.

Sprint had already raised its offer to $3.40 per share last week and Dish’s latest bid just complicates Sprint’s attempts to purchase Clearwire. Clearwire minority shareholders were unhappy with Sprint’s offer and may push the board to go ahead with Dish’s latest offer. Minority shareholders, Crest Financial Ltd. and Mount Kellett Capital Management LP thought that the offer by Sprint severely undervalued the company and its wireless spectrum.

“It is obviously a better offer,” Clearwire individual investor David Weber said of Dish’s latest proposal. “But I’d be surprised if Sprint doesn’t top that. It doesn’t sound like the bidding war is over.”

The Tenkan Sen (or turning line) is the sum of the high and low price then divided two (an average), over the last 9 periods. This takes into account the volatility of the security, because the range is used, as opposed to simply using the closing price like in a simple moving average.

The Kijun Sen (standard line) is the same formula just over 26 periods, with the same idea.  Then the last line to understand, before understanding the cloud, is the Chikou Span (lagging line). This is simply price shifted back 26 periods. Considering that the Tenkan Sen is a faster average than the Kijun Sen, if the Tenkan Sen is above the Kijun Sen the trend tends to be bullish and the opposite for bearish.

The actual cloud part consists of two Spans. Span A of the cloud is the average of Tenkan Sen and Kijun Sen pushed forward 26 periods. Then Span B is the average range ((high+low)/2) for the last 52 periods pushed forward 26 periods. This is the future cloud that is beyond the current price.

If the price of the underlying asset is under the cloud the sentiment is bearish and therefore the opposite for bullish. If cloud Span A is below Span B, the sentiment is bearish. Span A over Span B would imply bullishness.

This study is immensely popular in Japan, the same place where candlestick studies were developed. As a result, many Japanese based securities follow the Ichimoku Cloud given its roots in the country and its popularity. Yen based currency pairs, Nikkei 225 futures and Japanese equities are just some of the assets that respect the Ichimoku Cloud.

In a concluding note, should AAPL close above the cloud today…this would mark the fifth day in a row price has closed above the cloud. This may indicate a major trend reversal. Furthermore, the Tenkan Sen 9 period line has moved up and over the cloud and presently sits around $440.61…potential support.

salerno.mark.a@gmail.com

Paper bought 500 AZK Dec 5 Calls for $0.25 (5.9 times usual volume) with stock at $3.74
Paper bought 7,000 NEPT Jun 2.5 Calls for $0.55 (4.1 times usual volume) with stock at $2.87
Paper bought 4,000 SFD Jan 30 Calls for $3.90 (31.1 times usual volume) with stock at $32.58
Paper bought 5,000 AMLP Jul 18 Puts for $0.60 (11.5 times usual volume) with stock at $17.87
Paper bought 106 UNM Jul 27 Calls for $1.75 (41.3 times usual volume) with stock at $28.19

The announcement sent STEI’s stock surging from 9.75 at close on May 28 to opening the following morning at 13.07. The transaction stands to expand SCI’s portfolio by adding 214 funeral service locations and 140 cemeteries spanning over 24 states.

Stewart Enterprises has shown reliable growth over the years with an average increase of 3% year-over-year in gross income since 2008. Excluding negative growth in 2009, average gross income comes in at 7.75%. While revenues increased, STEI also managed to reduce expenses steadily, cutting away almost $1.5 million year-over-year. The company has met earnings estimates for the past four consecutive quarters with projections of bringing in $538 million in revenue for 2013, compared to $516 million in 2012.

The combination of STEI’s resources to Service Corp’s $2.41 billion annual revenues could solidify a profitable position over an observable change in shifting US demographics. SCI aims to see a 13% market share in the fragmented industry. The acquisition has received approval from the board of directors of both companies but awaits shareholder vote for Stewart Enterprises. The deal is expected to close later this year or in early 2014. 

 Everyday I watch over 2,000 trades and place roughly 3-5 positions daily based on the trading activity of the big Institutional traders. I did not place a trade in STEI, but after the announcement of its acquisition by SCI for $13.25, I looked to see if I missed anything. Amazingly enough, traders came in and bought Upside Calls. Lets check out their trades and profits:

On 5.24 a trader bought 500 STEI June 10 Calls for $.15 Risk: $7500 Today’s these Calls are worth $3.10, good for over $147,500 in Profits

On 5.24 a trader bought 900 STEI Aug 10 Calls for $.75 Risk: $67,500 Today’s these Calls are worth $3.15, good for over $216,00 in Profits

On 5.24 a trader bought 450 STEI Nov 10 Calls for $.95 Risk: $33,750 Today’s these Calls are worth $3.25, good for over $103,500 in Profits