EK

Because there is evidently still some chat-room interest in this stock, I took a look at a bigger-picture chart to see what's going on.  Lo, the 2.75 bottom recorded just before the rumor mill shifted into high gear early in May fell just two ticks from a major Hidden Pivot 'midpoint' support. Since I don't have a crystal ball, I won't speculate on whether that support will contain the current dive. However, I can assure you that if the pivot is decisively breached, Kodak is headed down to at least 1.47, the midpoint's 'D' sibling. It's all in the chart, as you can see for yourself.

We'll record a theoretical gain of $154 from two February 5 calls just to get this limping lump of  brick dust off the sheets.  There are numerous reasons why the stock might turn around, or even leap higher, but the whole point of the exercise was to make a cupla bucks on a hot tip, and that we have done.  Fare thee well, Eastman Kodak.

Even though we hold two February 5 calls that will produce a theoretical profit of $154 no matter what the stock does, it's still hard not to be dismayed by recent news developments that have caused the stock to plummet.  Kodak has lost a round in a patent infringement suit against Apple and Research In Motion.  More depressing than that, however, is that news stories reporting the ITC's patent decision have noted incidentally that Kodak has been living off lawsuits and royalties while apparently producing little of value.  How the mighty have fallen!  From a technical standpoint, the stock stood to bounce from a Hidden Pivot at 4.74 (5-minute, A=5.85, B=5.08 and C=5.51) -- as indeed it has Monday night, and rather precisely. This was a decent spot to try bottom-fishing on the first pass, but if the support now gives way, that would leave only vague support near 4.61, where the stock banged out some key lows in early December.  One more note: EK's lawyers think they will prevail in the end. In similar lawsuits already settled, Kodak did indeed win nine-figure settlements.

I've established a tracking position for your further guidance, since some subscribers are evidently still long.  Ahead of EK's leap, I'd touted the January 5 calls when they were offered for 0.26, so we'll assume four still held after cashing out of four more at 0.54 (that's midway between 0.26 and their so-far post-rally high of 0.83).   That gives us an effective cost basis of -0.02 for each of the four puts we still hold, so we'll just call them freebies.  FYI, the same pederasts who were accumulating stock for five weeks before They sprang a bear trap have been letting the stock fall back so that They can steal more of it from nervous widows and pensioners.  We'll do nothing further at the moment, since we've got at least 7-10 days to roll out of January premium before it starts to flatline. _______ UPDATE (2:27 p.m. ET):  EK is moving out of a consolidation, presumably bound for a minimum 5.82 once it has cleared the midpoint resistance at 5.44. _______ FURTHER UPDATE (December 20, 11:123a.m. ET):  Kodak has popped to a high today of 5.88. I'll suggest exiting two of the four Jan 5 calls that remain for  0.95 or better.  That will give us an adjusted cost basis of -0.97 for the two calls that remain.

Although Rick's Picks is designed to look like a horse player's tout sheet, subscribers will know that I don't often feature hot tips.  I made an exception for Phil Calderone's hot tip on Kodak because Phil has produced some timely winners in the past, and because the stock had been working on a bullish flag for a month. This tip will have paid off well for anyone who took it to heart.  Pivoteers may have noticed that the stock's impressive leap yesterday stalled precisely at a 'D' target (shown).  EK looks to be consolidating, and so I will pass on to you Phil's latest update -- and caveat emptor.  He sees the stock as having entered the second of three stages that will take it to around $8 sometime in the first quarter of 2011. More immediately, and from a Hidden Pivot perspective, EK looked especially impressive yesterday because the thrust breached two "external" peaks on the weekly chart.  That doesn't necessarily mean it's going to the moon, but it does strongly imply that any weakness in the offing should be viewed as corrective.

After rolling out of our January 5 calls, we hold two February 5s for a 77-cent credit each. That means the worst we can do, even if Kodak falls to zero, is make $154 for each two options held.  Lately, Kodak has been trying very hard to look like hell, and it may keep up this appearance for yet a while longer, since yesterday's low breached a Hidden Pivot support at 5.28 by a burly ten cents. Keep in mind that EK is not falling because of weakness, but because the scumballs who have been brazenly manipulating it higher since early December want to steal some additional shares from widows, orphans and pensioners at lower prices before they goose the stock again.  FYI, it is not intended that this stock be haphazardly accumulated simply because it is on Phil Calderone's short list. Our initial buy was both timely and opportune, but if you missed the boat, you should NOT be trying to make up for lost time. If there is to be any belated buying at all in this stock, it should be done using low-risk Hidden Pivot entries. _______ UPDATE (January 24): This just in, from Phil Calderone: "Anyone who has bought EK on my numerous buy recommendations over the last few months should now SELL it. I don't like how it has been acting and the chart is much less positive than it has been. Downside risk is possible to 4."   Note from Rick:  From a Hidden Pivot perspective, the stock looks okay, not great.  However, to me at least, it seems mildly bullish that EK's most recent dive failed to take out the 5.05 low from December 13. As a practical matter, we'll simply continue to hold the Feb 5 calls, since they will produce a theoretical profit for us no matter what