10:30am (EST) We have a tiger by the tail… The Dow is currently up 75 points to 8819 while the Nasdaq is up 17 to 1903. The S&P 500 is over 947…yes, the bulls are back in town and they are having a party. The Tech sector is getting a lift from Cisco Systems (CSCO, $21.06, up $0.55) so let’s take a look at all of our open positions and go over them. Ford (F, $6.25, up $0.11) was a trade I profiled BEFORE the blog went private and on May 18th I recommended a couple of trades. The December 6 calls (FLI, $1.17, up $0.059) were profiled at $1.25 while the December 7 calls (FLJ, $0.73, up $0.06) were profiled at $1.00. I still like BOTH options at current levels and believe Ford has a chance to hit $10 by year-end. Ford will announce earnings on Thursday and the December call options have 151 days before they expire. Bank of America (BAC, $12.47, down $0.42) was profiled on June 12th and the November 15 calls (BYOKO, $0.73, down $0.17) were profiled at $1.50. I’m keeping this one open becasue these call options will be worth at least $3 if the stock can make it to $18 in 123 days which is when the November options expire. I know I keep 50% firm stops but this position is different. The calls were right back at even before BofA announced earnings and I knew the risks going in. Now, if BofA falls below $10 then I will close the position but if CIT Group (CIT, $1.28, down $0.57) goes away, BofA will be there to pick up their business. Cisco Systems (CSCO, $21.06, up $0.55) got an upgrade this morning and the October 20 calls (CYQJD, $1.91, up $0.32) were profiled at $1.50 on June 2nd. They were going for $1.30 on Friday at 11am. I echoed that if Cisco can get to $25 then these options are worth $5. For those of you who have just signed on, I like these calls up to $2.00 as an entry price so you still have time to get in. IBM (IBM, $116.04, up $0.62) continues to impress. The July 105 (IBMGA) calls could have been picked up for $1.65 last Wednesday with IBM trading at $104. We took profits along the way and you would have been able to close any remaining contracts for $10+ on Friday. From $1.65 to $10.00 is a 500% gain, folks. I also profiled the August 105 calls (IBMHA, $11.20, up $0.40) at $3.40 shortly after the opening bell that day as well. These profits are approaching returns of up to 250%. Set stops at $10.00-$10.50. On Thursday, we also “rolled” into the August 115 (IBMHC, $3.50, up $0.40) when these calls were at $1.05. At current levels that represents profits of nearly 250% also. Set stops at $2.50. Some of you asked if the IBM August 120 calls (IMBHD, $1.25, up $0.15) would be a good play but you have to remember the stock has moved $10 points in less than a week. There is a chance IBM hits $120-$125 before the August options expire but if you haven’t gotten in, you’re a little late to the party. I don’t mean that in a bad way, it’s just that we have already been in the August calls since last week so the party could almost be over. I also wanted to add some of my reasons for profiling the trades last week because some of you are thirsty for information on how I look at things. IBM was the one Tech company that I was willing to “bet” would do well and I suggested playing call options all last week. I only say the word “bet” because that is what YOUR broker will probably tell you (or your friends). You see, not a lot of people or brokers recommend these types of plays because A) they don’t know what they are doing and B) they have been taught that options are “risky”. Well, I disagree. The one thing I said about IBM was that we had “serious resistance” at $110 and if it were broken we would see buyers come in. I even told you I had a “gut feeling” that IBM would do well after announcing earnings. The gut feeling is hard to teach but sometimes you will get a “feel” for how things are playing out. After Intel’s news, the trade on IBM was a no brainer for me. The rest of the week felt “bullish” and IBM had beat and raised numbers from their last quarter. I did my homework and I shared it with you. As a result, it was one of the biggest trades of the year profiled in the Blog. I’ll be back in a couple of hours with updates on Fairchild Semiconductor (FCS, $8.80, up $0.23) and USEC (USU, $6.24, down $0.21). I’m also looking at a few trades that may be good to day trade this week. Rick@MomentumOptionsTrading.com ]]>
