Sorry members for seeming to disappear shortly after mid-session Monday. There was a massive fire 3 buildings down from my office which melted all the electrical/internet wiring on that corner and affected a large area here until around 10:30PM EST.
It was however a pretty festive morning, seeing EBIO which was alerted initially in chat 2 months back in the low .30 range, pop like a champagne cork on news pre market, nearly eclipsing $4 for a potential 10-bagger (1000%) for long holders. CBYL is where all the chatter flowed over to late in the session which, for all those who own near my $1 average, will be wanting to monitor that very closely as the week progresses.
FES 0.24 (Starter Alert @ .17)
Forbes Energy Services Ltd. is an independent oilfield services contractor that provides a broad range of drilling-related and production-related services to oil and natural gas companies, primarily onshore in Texas and Pennsylvania (www.forbesenergyservices.com). With many in their industry which we have already seen file for bankruptcy and get delsited to the OTC, FES continues to trade on the NASDAQ for now and has recently retained financial advisors Jefferies LLC and legal advisors Pachulski Stang Ziehl & Jones LLP to advise on strategic alternatives related to its capital structure. Translation: They Are In Trouble
Their last Q filing for the 3 months ended March 31, 2016, showed a significant decrease in total revenues for the period compared to the same period the year prior: $31.93M versus $84.33M. John Crisp, president and CEO of Forbes Energy Services, said in the Q1 transcript that the company “will continue to operate as lean as possible, eliminating nonessential costs and resources.” At the end of Q1, 2016 they had $77.8 M in cash and cash equivalents and $301.9M in contractual debt and capital leases. Translation: They Are In Trouble
From a technical POV, FES has bounced nicely off their Friday/Monday 52Wk Lo of .17 after falling for the first 2 weeks of June from 0.43 range. The RSI (28.40) is still oversold, even with yesterday’s .07 increase (40%) in share price, and a chance to scoop in prior to any further announcements about their “strategic alternatives” in the teens (.17 – .19) could play out for a decent trade.
The share structure is not horrible: 22.99M outstanding | 14.15M Float; the volume is getting there: $429,177 Monday | $107,046; but the concern is possibly filing for bankruptcy as many of the other independent oilfield companies have already done this year. With that said, there is a lot to like about FES, and a lot to be cautious about, so bidding .17 – .19 for a starter entry and being prepared to react to the next news for an exit could make for a very decent trade.
The VXX 15 CALLS entered into early in the session played out perfectly and still have some considerable upside to them based on the weakness SPY provided after that 10:30AM spike to nearly 210.50. I did mention that 210.50 would be the entry for getting into some SPY PUTS, 211 an absolute level, so for those of you who did and rode SPY down to the sub 208 after hours dip, prepare to take gains (VXX too) if the market does buy back that gap ahead of the FOMC Meeting.
VXX Closed @ 16.88 After Hours
I expect we see a bounce on “Turn Around Tuesday” and I wouldn’t be surprised to see SPY revisit 211 before the Fed message comes out. We were “technically” set up for a push to higher highs last week, but both Thursday, Friday & yesterday opened up with gap downs and proved that the bullish technicals are just that: bull. We will likely see a quick move lower at the opening bell to fill the gap and then a bounce which is likely to be timed at or nearest to the 9:50AM EST reversal time zone.
Check the High Volume Options from yesterday: SPY 210 & 210.5 CALLS for this week were absolutely LOADED in the afternoon Monday.
I’ve been saying it for a few days now that IF we can come down to the “neckline” region from the daily chart and bounce to “near 211” on this FOMC Meeting this week, we will have formed off a Left Shoulder – Head – and the needed Right Shoulder, allowing us to ride SPY PUTS from 211 into next week – Brexit Vote Week. Being this is the monthly expirations week, SPY “should” end the week between the 209.60 – 208.50 support lines and see some “summer time sell off” ahead of the UK vs. EU battle due June 23.
AAPL (96.94 Pre market) is falling on its face while their annual WDC tech show kicked off
FB (114.09 Pre market) is likely still being shorted by Citron – a squeeze that could see 118 by Friday
TSLA | NFLX | AGN are all worth tracking as we get closer to Friday. It was shocking to see that NFLX ran like it stole something, and then the bears who knew this run was supposed to be on Friday was to run out of steam, rode the slightly expensive PUTS back down to the open price.
Having missed the dip on FB into the low 113’s due to the fire incident near here, I will be stalking this at the open for a chance to perhaps get some cheap 115 CALLS. I’ll be looking to sell out of my VXX 15 CALLS around 9:50 – 10AM and start stalking an entry into SPY 209/210 CALLS or VXX 16/16.50 PUTS.