THQ (THQI, $5.81, down $0.01)
June 6 calls (THQI110618C00006000, $0.90, down $0.05)
Entry Price: $0.75 (12/8/10)
Exit Target: $2.00
Stop Target: None
Action: Continue to hold.
Foster Wheeler (FWLT, $33.45, up $0.24)
January 30 calls (FWLT110122C00030000, $4.10, up $0.30)
Entry Price: $1.00 (11/30/10)
Exit Target: $2.00+ (closed half @ $1.90 on 12/2/10)
Stop Target: $3.00 (HARD STOP)
Action: Our target for Foster Wheeler has been $35 since we initiated coverage of this trade and we told you the break over $30 would be huge. Shares surged 8% last week and look poised for new 52-week highs which happens on a close over $35. Continue to hold the other half.
Electronic Arts (ERTS, $15.82, up $0.07)
March 20 calls (ERTS110319C00020000, $0.25, up $0.01)
Entry Price: $0.22 (11/24/10)
Exit Target: $0.50+
Stop Target: None
Action: Shares are approaching their 100-day moving average which is right around $16 and represents serious resistance. The stock hit a high of $15.98 on Thursday and $15.88 on Friday. We easily have enough time to wait this one out as the break above $16 will be very bullish. Continue to hold.
JDS Uniphase (JDSU, $13.43, down $0.05)
March 12 calls (JDSU110319C00012000, $2.00, down $0.05)
Entry Price: $1.25 (11/19/10)
Exit Target: $2.50
Stop Target: $1.25
Action: We used some longer-term options to provide us some protection over Thanksgiving because we told you we thought the market would test support before resuming its uptrend. We also had a mix of near-term options so we wanted to establish other trades while we closed out December and January options.
JDSU was a favorite of ours and we knew it was a “cheap” stock at $12 which is where it was trading at back in mid-November.
We have a $15 price target for JDSU which will get these options to $3+ which is still a 50% gain from current levels. Continue to hold.
Riverbed Technology (RVBD, $37.30, up $1.09)
March 35 calls (RVBD110319C00035000, $5.30, up $0.70)
Entry Price: $1.40 (11/17/10)
Exit Target: $2.80 (closed half @ $3.00 on 11/23/10)
Stop Target: $3.75 (HARD STOP on other half)
Action: Riverbed hit a new 52-week high of $37.61 on Friday and we told you shares would zoom following its post 2-for-1 stock split on November 9. We cover stock-splits and playing options on them in our trading manual, How to Trade Options on Momentum Stocks, and Riverbed made us look golden.
Continue to hold the other half.
Aruba Networks (ARUN, $23.16, up $0.04)
January 25 calls (ARUN110122C00025000, $0.80, down $0.05)
Entry Price: $1.20 (11/2/10)
Exit Target: $2.40+
Stop Target: Close the trade is shares fall below $20
Action: We still feel shares can make a push past $25 by mid-January. A break above $24 will be very bullish which is what we expect this week. Continue to hold.
PowerShares QQQ (QQQQ, $54.49, up $0.36)
January 53 calls (QQQQ110122C00053000, $2.20, up $0.25)
Entry Price: $1.54 (10/27/10)
Exit Target: $3.00+
Stop Target: $1.75
Action: This trade is a power play on the Nasdaq. These calls are in-the-money and we moved up the stop on Friday to protect profits. Continue to hold as we are looking for the Q’s to break $55 this week.
American Tower (AMT, $50.46, down $0.39)
April (2011) 60 calls (AMT110416C00060000, $0.30, down $0.05)
Entry Price: $0.65 (10/20/10)
Exit Target: $1.30+
Stop Target: None
Action: Shares are building solid support at $50-$52 for the move up to $60 by early next year. However, a break below $50 would give us second thoughts on this trade. Continue to hold.
Dendreon (DNDN, $37.65, up $0.17) (COVERED CALL)
December 40 call (DNDN101218C00040000, $0.15, flat)
Entry Price: $41.96 (9/13/10) sold October 45 call @ $1.30, (11/11/10) sold December call @$1.75
Exit Target: $45
Stop Target: None
Action: We will be looking to SELL another call option on Dendreon in a week or two. This will lower our cost basis even further.
Dendreon opened at $41.96 and you could have sold the October 45 call option for $1.30 on 9/13/10. This lowered the cost basis to $40.66.
On 11/11/10 we sold the December 40 call option for $1.75 which lowered our cost basis to $38.91. If the stock gets “called away” from us by mid-December then we make 3% in 3 months.
Other 2010 Portfolio OPEN positions (2): These are trades that are still open in the portfolio that have longer expiration dates or are on “hold” but are not worth mentioning until they turn around. We are still keeping track of the trade and we will record the results, accordingly, when we close them or the options expire. Click on the 2010 Portfolio link in the Members Area to view ALL open/ closed trades.
Biodel March 7.50 calls (from October)
Chesapeake Energy January 25 calls (from October)
WATCH LIST SECTION
These trades are NOT recommendations until we send out an alert. These are trades that we like but have not added to the portfolio as an official recommendation because of market conditions or because we are waiting for better entry prices. We will not list entry prices because these stocks are on the verge of breaking out or they could sell-off.
Best Buy (BBY, $41.80, down $0.20)
December 43 calls (BBY101218C00043000, $0.75, down $0.08)
Action: This almost looks too easy which has our caution flag out. A 5% move in the stock represents $2, which would be enough to make this trade worthwhile. A 10% pop in the stock would be $4 which gets the stock to $45 or $39.
As far as the options, the calls will do well if Best Buy moves 5% or more, but will expire worthless if Wall Street doesn’t like what it hears and shares fall below $40.
FedEx (FDX, $93.98, down $0.11)
January 100 calls (FDX110122C00100000, $1.25, down $0.05)
Action: We have been calling for FedEx to hit $100 and their earnings announcement will either get them there or the stock fall below $90. We recommended these calls at $1.25 at the end of November and told subscribers to exit half at $2.15 when shares were testing their 52-week high just 3-days later. We closed the other half when the calls slipped back to $1.60 and shares slipped after a failed test of resistance.
The bulls could use the company’s earnings to push shares to new highs but FedEx will have to impress.
Adobe Systems (ADBE, $28.71, up $0.11)
January 30 calls (ADBE110122C00030000, $0.95, flat)
April 33 calls (ADBE110416C00033000, $0.95, flat)
April 26 puts (ADBE110416P00026000, $1.30, down $0.05)
Action: Watch for now.
Research In Motion (RIMM, $62.15, up $0.86)
December 65 calls (RIMM101218C00065000, $1.20, up $0.20)
January 70 calls (RIMM110122C00070000, $1.15, up $0.10)
January 55 puts (RIMM110122P00055000, $1.20, down $0.20)
Action: RIMM reports earnings this Thursday.
RIMM is usually a big mover on earnings but last time they announced earnings (September) shares fell slightly. In June, the stock fell from $58 to $52 after reporting.
RIMM is going to have to say some impressive things to wow Wall Street but we are a little nervous with this one which is why we will probably sit on the sidelines. As much as we want to trust RIMM, we don’t.
Darden Restaurants (DRI, $49.48, down $0.15)
April 55 calls (DRI110416C00055000, $1.10, flat)
Action: We think Darden is worth $60 a share and these options will be worth $5 if shares can get there by mid-April.
DryShips (DRYS, $6.33, up $0.33)
March 7 calls (DRYS110319C00007000, $0.50, up $0.15)
June 7 calls (DRYS110618C00007000, $0.75, up $0.20)
Action: We would’ve like to have seen shares come down to $5.75 last week but they didn’t. We may or may not get the chance to participate in this one.
Juniper Networks (JNPR, $35.88, up $0.13)
January 35 calls (JNPR110122C00035000, $1.95, up $0.10)
Action: We think a run to $40 is in the cards once $36 is taken out.
CurrencyShares Euro Trust (FXE, $131.79, down $0.11)
January 125 puts (FXE110122P00125000, $0.55, flat)
Action: We would like to see a run back to $135 before we go short. We think the Euro is headed to $1.25 early next year.
Skyworks Solutions (SWKS, $28.04, up $0.31)
January 28 calls (SWKS110122C00028000, $1.50, up $0.20)
Action: Watch for now.]]>