October 2009 | Members

9:15am (EST)

Abercrombie & Fitch (ANF, $37.05, down $0.53)

November 34 puts (ANFWL, $0.85, up $0.05)

Entry Price: $0.90 (10/19/09)
Exit Target: $2.00 
Return: -6%
Stop:  40 cents

Action: The first crack for a breakdown in the stock is $36.50 which should clear the way to $35 for Abercrombie.  From there, if we get a break below $35 we are looking for shares to retest their low of $30 which was set at the beginning of the month.  The stock recently broke resistance and it will be important that we stay below $40.  I mentioned if the stock traded $40 we would close the trade but the stop is set to reflect ANF trading at $39 based on my calculations.  In other words, if the stock pushes $39 the trade will be busted.


Chesapeake Energy (CHK, $28.85, down $0.12) 

November 30 calls (HKWKF, $0.95, down $0.10)

Entry Price: $1.05 (10/19/09)
Exit Target: $2.00 
Return: -10%
Stop:  50 cents

Action:  Chesapeake held up well despite touching a low of $28 on Tuesday.  The calls made it to a high of $1.10 but traded to a low of 70 cents before rebounding.  Zachs came out with a “Neutral” recommendation on the stock which caused some pressure on the stock but said “Chesapeake remains better positioned than most of its peers to operate in the tentative commodity-price environment”.  This position will be volatile…     


Blackstone Group (BX, $15.87, flat) 

January 20 calls (BXAD, $0.50, flat)

Entry Price: $0.65 (10/15/09)
Exit Target: $1.30  
Return: -23%
Stop:  25 cents 

Action:  Continue to hold. 


Dendreon (DNDN, $28.43, down $0.77)

January 35 calls (UQBAT, $1.65, down $0.25)

 Entry Price: $2.15 (10/15/09)
Exit Target: $5.00  
Return: -23%
Stop:  None

Action:  Continue to hold.


Imax (IMAX, $11.11, up $0.14)

March 2010 12.50 calls (IMQCV, $0.75, unchanged)

Entry Price: $0.45 (8/10/09)
Exit Target: $1.00+
Return: 67%

Stop: 50 cents  

Action:  The “Bid” for these calls is at 75 cents while the “Ask” is at 90 cents.  Our exit target is $1.00+ and at 90 cents the trade is a double.  For those of you who have been in the trade since August, you could try to set limit prices at 90 cents to close half of the trade but we still expect the stock to trade $15 by March 2010.  We are not closing the trade or half positions but we wanted to point out the fact that we are at a double if you can get the “asking” price.