Top 2%
Back to $29?
Started Sep 06 at 4:11 ET (By rojack)
Symbols: WB, JPM, UYG, AM, HBC, BBT, AIB, SKF, WFC, BAC, BCS, CFC, IYF, UVU, ETFC, C
Made a strong move after hours to $23.13 due to the Fannie and Freddie mess. Looks like we could have a move towards $29 again. Got it on Friday around $21. Will play this for a couple days if Monday is strong, then I will cash out. After this initial run I expect a final test of $20, then the worst in my opinion should be over.
Top 1%
beancounter
Sep 06 at 4:16 ET
Are you talking UYG? If so, yeah, this thing's going to rock I might even look at a couple of options plays on this....BAC and JPM also solid
Top 2%
rojack
Sep 06 at 5:53 ET
Yes, UYG. It's hard to call any play on it after the open Monday. We may open in the low $24 range. If there is a pullback after the open I would buy more, only if there was a good run up in the first 20 minutes or so. It'll be interesting to see how it plays out. BAC, JPM look solid as well. I'm also in ETFC. ETFC could be a easy 50% short term.
Top 1%
guliamo
Sep 07 at 3:08 ET
I like your etrade and JPM ideas.. I think Freddie and Fannie are juiced out for profit and can't be predicted.
I don't like BAC because i think retail banking is going to be the biggest looser in the credit game. If valuation remains low, they will be forced to cut costs - this is always painful and not good for the stock in the near term. This is why I like ETFC - they are a site. They can expand effortlessly and if valuation remains low, they can still be profitable. eTrade management has also been very brave in dealing with the crysis and were the first to cut their losses and move on.
I like JPM mostly because I don't like retail banking and because I think they made a huge steal on Bear Sterns.
Top 1%
beancounter
Sep 07 at 12:31 ET
Good take on BAC that's a real concern. Given that it's such a big chunk of UYG though, it would like move with the rest of the IYF, at least for now, no? I'd love to buy BAC in the low mid 20s again...
Do you feel the same issue exists at citi, wfc they might be okay because of their deposits and can be buyers of some of the weaker banks.
Rojack if you see a pullback and UYG hits 24, SKF will be somewhere in the 106 area probably might be a good trade to grab that for the pullback down and close it out quickly.
If this is an intermediate term bottom, UVU interests me also, though the liquidity stinks.
God luck all.
Top 2%
rojack
Sep 07 at 3:59 ET
Beancounter, good advice on the pullback play. I think this will be a short lived rally - if we get one. After hours on Friday makes us believe that we will have a rally, however alot can change over the weekend.
Top 1%
beancounter
Sep 08 at 10:02 ET
Hope you took your bread this AM. Nice pop. SKF at the open and September 95 calls were positively breathtaking.
Top 34%
alphaseeker
Sep 08 at 7:15 ET
I think there's a shot for UYG to get back up to $29. It's right at a resistance level right now. If it breaks through, there doesn't appear to be much resistance until about $30. As far as the banks go, I think we will definitely see more writedowns in the future as the option-ARM mess sorts itself out; however, I feel like that won't be an issue until at least early 2009.
I also like BAC's position having purchased Countrywide for pennies on the dollar. They have a relatively strong capital base and you can basically buy BAC now and get CFC for free. Sounds like a good deal to me! I also agree with Guliamo's opinion on JPM getting a steal with Bear Stearns for similar reasons.
I like C to survive this whole mess; however, I don't really see them coming out as the same Citigroup. Pandit has a mess on his hands and it will take some time to clean it up. I do see them recovering, but not for at least a year beyond the rest of the banks.
I'm pretty interested in Wachovia (WB) although I may have missed the boat on getting a good price for it. I'm expecting a nice earnings pop when the next quarter is announced. They took a lot of writedowns last quarter so Steel could start with a clean slate next earnings season.
Top 2%
rojack
Sep 08 at 8:27 ET
Took profits this morning, will sit on the sidelines for now.
Top 2%
Cosmic
Sep 08 at 10:26 ET
guliamo-
I would stay away from JPM (unless you bought it mid July. in which case I'd sell it soon for a quick profit...or hold it long over time). They have a large amount of GSE preferred stock and based on my understanding of the Fed's plan, JPM should really be hurting now. If you are looking to get into Banks, I would suggest BBT or possibly WFC. Alternately, look at Banks overseas like AIB, BCS, and HBC.
Top 1%
guliamo
Sep 09 at 10:11 ET
I hear you about JPM and am taking a calculated risk here. I think all banks have been beaten to a pulp and writing off another 100 mill is small compared with the bonanza Bear Sterns deal.
JP announced they were going to cancel their plan to rent a big part of the liberty towers.. because they inherited a sky scraper in the financial district from Bear Sterns.. enough said.
As I mentioned I'm going with JPM and ETFC over WB or BAC because I think their climb back up will be easier than the retail banks who will have to deal with more massive restructuring..