ACTIONS:
Sell to open the AKS September 6 calls (AKS150918C00006000, $0.40, down $0.05) at current levels.
Sell to open the DRYS September 1 calls (DRYS150918C00001000, $0.05, flat) at current levels.
Sell to open the BEBE September 4 calls (BEBE150918C00004000, $0.35, down $0.05) at current levels.
Sell to open the VVUS September 4 calls (VVUS150918C00004000, $0.10, down $0.05) at current levels.
Sell to open the ZNGA September 3 calls (ZNGA150918C00003000, $0.16, flat) at current levels.
Sell to open the GALE October 2 calls (GALE151016C00002000, $0.15, down $0.03) at current levels.
Dear Momentum Stocks Weekly Subscriber,
I mentioned previously that I would be taking action on the trades that are on hold in the portfolio.
I am not suggesting new positions in any of these trades, so do not buy the shares to execute the covered calls if you do not already own them. However, we can produce a little income in order to lower the cost basis of each trade.
The trades that are “called-away” can be counted as tax write-offs, and I wanted to get that ball rolling ahead of the summer doldrums.
AKS Steel Holding (AKS, $5.08, up $0.05)
Sell to open the AKS September 6 calls (AKS150918C00006000, $0.40, down $0.05) at current levels.
This is one of the portfolio’s original trades from when the service was launched, but it has been suffering due to lower steel prices. I’m writing the AKS September 6 calls for $0.40 to lower the cost basis of the trade.
DryShips (DRYS, $0.67, down $0.01)
Sell to open the DRYS September 1 calls (DRYS150918C00001000, $0.05, flat) at current levels.
I’m writing the DRYS September 1 calls for $0.05 to lower the cost basis of the trade. This is the last of the two trades from 2011, which will likely be tax losses this year.
Bebe Stores (BEBE, $3.35, down $0.06)
Sell to open the BEBE September 4 calls (BEBE150918C00004000, $0.35, down $0.05) at current levels.
Shares have been paying a slight dividend, which is one reason I haven’t cut the cord on this trade. I have decided to write options to lower the cost basis. The company needs fresh management to revive a once-classic brand and could be taken private if shares continue to languish. I’m writing the BEBE September 4 calls for $0.35 to lower the cost basis of the trade.
Vivus (VVUS, $2.26, down $0.07)
Sell to open the VVUS September 4 calls (VVUS150918C00004000, $0.10, down $0.05) at current levels.
I’m writing the VVUS September 4 calls for $0.10 to lower the cost basis of the trade. The company still has a drug pipeline, but the prospects aren’t as explosive as I had once envisioned.
Zynga (ZNGA, $2.45, flat)
Sell to open the ZNGA September 3 calls (ZNGA150918C00003000, $0.16, flat) at current levels.
I’m writing the ZNGA September 3 calls for $0.16 to lower the cost basis of the trade. This is my “poker” trade, as I have been hoping Zynga would go after the internet market with its poker app. Perhaps its new CEO will see this vision, as there is a ton of cash to be made by “raking” in the pots. Disney has invested $100 million into DraftKings, and I believe a paid poker-playing app would save Zynga. The company could make money now overseas as it waits for US approval.
Galena Biopharma (GALE, $1.32, down $0.05)
Sell to open the GALE October 2 calls (GALE151016C00002000, $0.15, down $0.03) at current levels.
I’m writing the GALE October 2 calls for $0.15 to lower the cost basis of the trade.
All prices given in this update are current as 3:20 p.m. EST.
Every new Momentum Stocks Weekly recommendation is listed with the price at which I entered my own position. If the price is slightly different than my recommended entry or exit price when you receive the alert, don’t let that keep you from getting into or out of a trade. Occasionally, you might even get a better “fill” price than what is posted in the Open Trades and Closed Trades.
Trade on!
Rick Rouse
Editor
Momentum Stocks Weekly
P.S. A Change to our Text Message Service
On Friday, May 1, the number you receive our text alerts (SMS) from will be changing. The new number will be 24587. You don’t need to do anything to continue getting our text messages if you have already signed up. But if you don’t start receiving text alerts from 24587 on or after May 1, you may need to contact your carrier to ask them to unblock texts from the new number.
If you don’t already receive our text alerts, we encourage you to sign up here. It is free to register, though your carrier may impose charges. And, again, be sure to have your provider remove any blocks for our number, 24587.
