Genco Shipping (GNK) Update

Twelve-days ago I suggested for those using covered calls to rollup & out on the GNK call trade. link
Genco Shipping (GNK) On this covered call the Jan $25 GNK-AE sold on Oct 21 for $1.70, suggest BUYING it back to close position for $0.50 and rolling up and out to the [SELL] April $28 Call ticker GNK-DV for $1.65 bid. The original cost for GNK was $22.90 - $1.70 + $0.50 - $1.65= $20.05
With GNK trading down under $22, the April $28 call is @ $0.35 ask, suggest buying back to close; open position.That would place the GNK cost basis at $20.40. Looking to resell a call as GNK trends to higher levels.

Genco (GNK) Retracing Recent Gains

Genco Shipping chart is signaling that its heading lower. ITZ PIX suggested buys are $21.50 & $17.30 cost basis with a Jan $25 Covered Call. $24 looks like a retest for sure, with the outside possibility of $21.

GNK Retreats

As I forewarned Genco Shipping was primed for a pullback after its recent rally. Don't forget tomorrow is OPEX and GNK is a high beta stock. Watching for the $24/$25 to be tested.
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Genco Shipping (GNK) Update

James Cramer in tonight's Mad Money discussed the charts on several shipping stocks. Noting what I've been reporting on my blog over the last several weeks. Cramer's picks are dry bulk shipper Diana (DSX) & oil tanker North American Tanker (NAT), both good picks too. He did note that GNK is a more leveraged play, with a higher debt exposure. One other interesting point made by James Cramer, he is 'expecting' a pullback near term before getting in. BINGO! Spot on Jimmy! This is why I have suggested a Jan. $25 covered call, matter of fact for those looking to enter on any pullback consider selling a December $24 put. I'd wait until GNK drops below $25, of course there's 5 weeks left until expiration so the premium will decay. But worth a look, I follow up on this as we approach that time.

Below is an updated chart and the Mad Money vid clip.
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Genco Shipping (GNK) Update

Deutsche Bank upgraded select dry bulk shipping stocks this morning. In a research note this morning, the firm upped its target on Genco Shipping (GNK) to $31 from $24. As I type GNK is trading at $27.40.
RECAP: I've suggested GNK twice @ $22.90 with a covered call Jan $25 GNK-AE for $1.70 bringing the cost basis to $21.20. Also a second re-recommendation @ $19.50 & covered call GNK-AE @ $2.20 cost basis $17.30. If GNK is trading over $25 on Jan15th expiration the returns will be 19.7% & 44.5% respectively. If you were to sell today @ $27.40 on a non-covered call basis [$22.90 & $19.50] the returns would be +19.6% & +40.5%. Lets see where we stand as we approach expiration...if the stock declines along with time decay on the option premium, I may suggest rolling up & out or just letting the stock get called, we have about 8 weeks until that occurs.

This moning on CNBC: John Maccarone, CEO of Textainer, discusses the health of the shipping business and the overall economy. Mentions possible 'Inventory Restocking'...hmmm???
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Genco Shipping (GNK) Hits $25 Target

Genco (GNK) has been in rally mode since $19.50 & hit my near term targetof $25. Thos who did not initiate the covered call suggestion, should take some profits or consider selling the Jan $25 to reduce their cost basis. So what's next? My indicators point to a pullback to the $21 level, at which I'll consider possibly buying back the calls as time decay kicks in, or perhaps rolling up & out. Or may just decide to let the shares get called...we'll see as we approach opex.
Interesting report today ~read story~
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GNK Heading Higher

The lower dollar play is continuing, just look at Buffett's BNI purchase...he sees commodities and transporting them as a play on that in the future...GNK is the same. Bounce right off that $19.50 level..next $24.
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Genco Shipping (GNK) Update

Genco Shipping (GNK) look bullish on the technicals, bouncing off not only its 200-ma...BUT the lower end of the triangle formation. That $19.50 low side target I suggested was spot on! see previous post

Diana Shipping reports earnings this coming Tuesday, with Warren Buffett's railroad investment (coal play) along with Joy Global just finishing an Industrial Conference and gave a optimistic outlook/trading near 52 week highs. This bodes well for the China/commodity play and for dry bulk shipping stocks in 2010.
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Genco Shipping (GNK) Action

***ACTION ALERT***

For those who own GNK @ suggested entry level of $22.90, suggest SELL to Open the Jan. 2010 $25 Call Option, ticker GNK-AE, for $1.70.
This will lower the cost basis to $21.20. If called @ $25 by opex, gains would be +18%. If stock pulls back towards $21/$20 level close call position. Reminder, accumulating GNK as to prior posts.

GNK Head Fake???

WOW! What a day for stocks and Genco Shipping (GNK)...I forewarned of the possible pullback @ $24! That said, I also stated last night that one should accumulate shares and load up at $21. This morning entry was $22.90..looking to add more @ $21 and down the road sell covered calls to lower the cost basis. So is GNK's move a head fake? NO as I stated, accumulate near term, this stock is volatile and can move 20% in a week very easily. They report earnings Oct.29th, consensus is for lower earnings..but my outlook is for higher commodity prices and a global recovery., Just look at the recent IPO news for spot prices and shipping, now is the time to get in.

BREAK OUT! GNK Price Target $35

As noted earlier this morning, my intraday charts on the open gave a STRONG BUY in @ $22.90 now up near $24+ near term resistance. Note this stock is very volatile and could as easily sell back down to the $21 level. I've set $35 as my price target. Looking at possible covered calls at higher levels to lower cost basis.

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Entered Genco Shipping (GNK)

Suggested entry on open for Genco Shipping (GNK) $22.90