Two Ways: Extreme Makeover for UAL
Strengthen your portfolio in good times and bad.
Top story this morning, United Airline's parent company UAL Corp (UAUA) could purchase up to 150 new airliners from Boeing (BA) or Airbus in a deal that could be worth more than $10 billion. According to The Wall Street Journal, UAL is asking both companies to propose dueling bids staging a winner-take-all competition in hopes of obtaining favorable terms that normally wouldn't be available.
The company is planning to replace many of its 111-airplane wide-body planes as well as some of its 97 Boeing 757 narrow-body planes. United could strike a deal as early as next fall, but certain conditions would need to be met such as favorable financing terms as well as the option to change the order late.
From the Bull Pen: If you believe that the price of crude oil will stall, consider the airliners. Professor James Kostohryz mentioned his plays yesterday on the Buzz, buying the AMR (AMR) and JetBlue (JBLU) July calls using defined risk.
From the Bear Cave: If you believe the Dow Transports is in the midst of tracing out a double top sell pattern, consider a downside play in the IYT ETF. A buy stop can be set above $61.
Quick Check Around the World
Asian trading closed with the Hang Seng -0.40%, India +0.93%, Shanghai -0.41%, Nikkei -0.75%, and Taiwan -1.55%.
Glancing towards Europe, we see the CAC +0.58%, DAX +0.66%, FTSE -0.05%
As of 8:10 AM EST, S&P Futures are trading -2 to 930.00, and Nasdaq futures are +1 to 1477.00.
A Look at Commodities
Over in commodities, crude oil is trading +0.92 to 67.04 while gold is +3.60 at 969.20 this morning. Silver is -0.450 to 15.26 and copper +1.25 to 222.45.
The dollar index is +0.3650 to 79.9000.
On the Radar
08:30 Initial Claims
08:30 Productivity 1.2% Cons.
Click here for the full trading radar.
Good luck today!
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