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FFIV Gets Hammered On Earnings Miss!

Jan. 19, 2011 10:57 PM ETGS, AAPL, WDC, FFIV, APKT, RVBD, MOS, NTR, CF
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The market opened on the weak side today, as GS reported a 53 percent decline in fourth-quarter profit.  GS fell 4.69%.  Financials were mostly down.  Agriculture stocks were under pressure as well, as Cargill decided to spin off its majority stake in MOS.  MOS lost more than 10%.  Other fertilizer stocks traded lower as well:  POT -3.93%, AGU -3.85%, CF -6.21%.

AAPL, even after its blowout numbers last night, ended int the red.  WDC, which reported a very strong quarter last night and traded higher in last night's after-hours trading, ended down 2.86% today!  Techs sold off ahead of FFIV's earnings.  We cashed out most of our long positions yesterday, including a near double on AKAM, and avoided today's carnage:

  • January 18, 2011
  • 07:56 | HappyTrading AKAM ($52.25) Sold to Close 01C47 Jan 47 calls, at $5.30 +96%
  • 07:45 | HappyTrading FAS ($30.95) Sold to Close 01C30 Jan 30 calls, at $1.45 +23%
  • 07:42 | HappyTrading IBM ($150.40) Sold to Close 01C150 Jan 150 calls, at $2.22 +27%
  • 07:33 | HappyTrading AAPL ($335.50) Sold to Close 01C350 Jan 350 calls, at $3.05 -38%

We got out early on IBM's 150 calls, which would have been a triple today.  But, the market was looking weak and the financials were slipping.  As I discussed in the Market Forecast this weekend, if the financials turn lower, the market will likely follow.  Thus, we were very cautious yesterday off our long positions.

After the market, FFIV missed its earnings estimates and forecasted a weak 2Q revenue.  Its shares got pummeled after the report, losing more than $30, or down more than 22%!!  Apparently, traders were already expecting a miss by FFIV, as stocks in the "cloud"-computing and networking/communication sectors sold off before the market close.  Most of them traded down even more after the market.  CRM, VMW, APKT, and RVBD all experienced heavy selling.

The Dow was down 12.64 points; SPX fell 13.1 points; Nasdaq dropped 40.49 points:

XME (metals and mining) tumbled 3.55%.  SOXX (semiconductors) lost 2.36%.  XLE (energy) dropped 1.21%.  XLF (financials) slipped 2.23%.  MOO (agriculture) gave up 3.04%.  FXI (Chinese ADRs) gained +0.27%.


SPX fell 13.1 points to close at 1281.92.  It managed to stay above the 10-day MA.  The MACD went down.


Nasdaq dropped 40.49 points to close at 2725.36.  It clsoed right at its 10-day MA.  The MACD was also lower.

Although techs sold off today, the Dow ended down only 12.64 points.  SPX and Nasdaq was supported by their respective 10-day MAs.  We should see some volatile trading tomorrow, especially in the tech stocks.  It looks like many stocks in networking and cloud-computing will open lower tomorrow.  But, we'll likely see dip-buyers come in, perhaps in late morning.  We'll have to see if the 10-day MAs will hold on the market indices.  But, if the financials stay weak, the market could be ready to pullback further.  Here are some notable earnings in the morning tomorrow:  FCX, ESI, MS, PNC, COF, UNP.

Good night and HappyTrading! ™ (click to see our Facebook Page)

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