October 2009 | Members


12:10pm (EST) NEW TRADE!!! Apollo Group (APOL, $61.27, down $11.70) Buy to OPEN APOL November 55 puts (OAQWK, $1.00, up $0.80) Note:  You can buy these now at limit prices of up to $1.10 and we are only looking for a break below $60 over the next few days.  Realize the stock could “bounce” from its lows but we think there is a good chance we break below $60. Now this is also important.  If you get in for a buck or $1.10 and the puts trade to a high of $1.50 or more today, close the trade.  Our stop is going to be 50 cents.   9:00am (EST) First Solar (FSLR, $150.22, down $4.65) November 115 puts (QHBWC, $1.30, up $0.50) Entry Price:  $1.00 (10/27/09) Exit Target: $2.00 Return: 30% Stop: None Action:  Hopefully, we took advantage of a good opportunity to go short First Solar.  The stock was at $151.93 when we sent out the 12:40pm update yesterday and the put options were at a buck.  We said to use limit prices of up to $1.10 so many of you should have gotten filled. The company reports earnings AFTER the market closes today. SunPower (SPWRA, $26.78, down $0.29) reported earnings last Friday and its stock fell from $33 to $28 after the company lowered its outlook for 2009.  If we can get the same type of news AND reaction, then we should be in good shape with First Solar.  The last time the company reported earnings was at the end of July when the stock was at $173.  The next day the stock opened at $155 and hit a low of $153.  It got worse.  By September the stock had bottomed at $112.  We got a little of that action and profiled a put option on First Solar that returned nearly 50%.  (new subscribers can check our 2009 track record)… Now, here we are two months later at $150.  The stock has done well bouncing back and we are sure to get an explosive move on Thursday.  We could also see some action today as we head into the close as traders take their positions.  This earnings play has NO stop because we do not want to get whipsawed out of the trade.  We were tap dancing around earnings for Buffalo Wild Wings (BWLD, $41.65, down $0.78) but we are going to roll the dice on this one.  Remember, the stock could rally and if the company dazzles Wall Street we could very well get an explosion to the upside.  If so, these puts will take a huge hit.   TiVo (TIVO, $11.72, up $0.09)  November 12.50 calls (TUKKV, $0.55, down $0.05) Entry Price:  $0.55 (10/23/09) Exit Target: $1.10+  Return: 18% Stop: $0.55 (CLOSED 1/2 @ 75 cents, 1/2 @ 55 cents) (10/26/09, 10/27/09) Action:  Well, we didn’t get the follow through we wanted on this one either.  We mentioned the December 12.50 calls (TUKLV, $0.90, up $0.05) yesterday if we were stopped out of the Novembers but let’s see how they open today.  There is no rush to buy them at the open unless something hits the wire but keep an eye on them.  If we do decide to add them to the portfolio, we will send out an alert.  Otherwise, wait for the signal.   Abercrombie & Fitch (ANF, $34.73, down $1.41) November 34 puts (ANFWL, $1.40, up $0.40) Entry Price: $0.90 (10/20/09) Exit Target: $2.00  Return: 56% Stop:  40 cents, raise to 95 cents Action:  We profiled Abercrombie a week ago and here was the original write-up for those of you who have joined us this week.  This is from our October 20th, 1pm update:  “I like these put options at current prices and use limit orders of 90 cents to get in.  If you don’t get filled at 90 cents, try 95 cents but DO NOT pay over $1.00 for them. ANF was on the verge of breaking down weeks ago and we made a 27% return last time out.  Since we closed the trade, the stock has run up to resistance which is currently at $37.50.  There could be some more short covering coming and there is the chance the stock could push $40 for some unknown reason but that would be where we get out if the stock reverses course and continues higher. We are looking for a break below $35 and a run back down to $30.  With the market looking tired today, we need to add some put insurance to our portfolio.” (END) Well folks, we got a break below $35 yesterday in convincing fashion which should act as resistance now that we have broken below this key level.  We are looking for a drop to $32-$33 over the near-term but notice we have raised the stop from 40 cents to 95 cents in order to take some risk out of the trade by walking away with a small profit in case the stock rebounds higher.    Chesapeake Energy (CHK, $26.34, up $0.61)  November 30 calls (HKWKF, $0.22, up $0.02) Entry Price: $1.05 (10/19/09) Exit Target: $2.00  Return: -79% Stop:  None Action:  The 5-day beating is finally over.  Yep, the stock had closed lower on five straight trading sessions before yesterday’s “rebound”.  We say that lightly because of the HUGE two cents gain on our call options…   Blackstone Group (BX, $14.39, down $0.71)  January 20 calls (BXAD, $0.20, down $0.10)  Entry Price: $0.65 (10/15/09) Exit Target: $1.30   Return: -69% Stop:  None Action:  January 15th, 2010…   Dendreon (DNDN, $26.70, down $0.57) January 35 calls (UQBAT, $1.15, down $0.05) Entry Price: $2.15 (10/15/09) Exit Target: $5.00   Return: -47% Stop:  None Action:  Continue to hold.   Imax (IMAX, $10.40, down $0.33) March 2010 12.50 calls (IMQCV, $0.50, down $0.15) Entry Price: $0.45 (8/10/09) Exit Target: $1.00+ Return: 11% Stop: 50 cents (CLOSED 10/27/09) Action:  Well, all good things come to an end, so they say.  We were not ready to throw in the towel on Imax but the market has forced our hand.  The key from here is to see if the stock holds the $10 level.  Shares closed on its low for the day which could carry over but our stop was in place to protect us from any further damage being done. The company will report earnings on Thursday, November 5th which is next week.  Add the IMAX November 10 calls (IMQKB, $0.90, down $0.15) to you Watch List and let’s see how they trade for the rest of the week.  The bid/ask is wide enough to drive a tank through…75 cents/ 90 cents.  We think the company has a good chance of reporting back-to-back profitable quarters but we weren’t encouraged by Tuesday’s action.  Wait for the signal on these options as well…]]>