Will Titanium Metals 'Tie' One On?
by Houghton and Atkeson 02/26/09
Titanium Metals Corp. (TIE) might report earnings anytime from today after the close through the first week or two of March. Option investors believe this producer of titanium melted and milled products could see rapid stock appreciation on the announcement.
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With the stock trading at about $6 per share, option investors have purchased almost 9,000 TIE March 7.50 (TIECU) and April 7.50 (TIEDU) Calls, with most of the action falling within the March expiration.
Options flow in front of earnings tends to lack the predictive power of options trades in a period of no known catalysts. However, given the size of the trades we thought traders who track the metals markets might be interested in the activity.
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Looking into June, the market should begin refocusing on upcoming earnings reports for evidence the economy is gaining momentum.
Watching the Treasury's Actions
In the short-term, the government's bond auction is likely to be a key driver of stocks.
Treasury Auction Boosts Market
The Treasury's auction of two-year notes brought an upside surprise which should alleviate fears of a lack of demand for U.S. paper.
Credit Markets Point to Upturn
The credit market, a reliable indicator of equity direction, suggests we will break out of the SPX's trading range to the upside.
The market seems to be saying that a 30% move up from the lows is ahead of the real economy and the market needs to allow the economy to catch up.
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