January 2011 | Members

 

Please remember, ALL “Exit Targets” and “Stop Targets” are targets.  You should not have any “Hard Stops” entered to close any trades or “Exit Orders” in your brokerage account unless we list one.  We will send out an “Alert” or “Trade Update” if we want you to close a position OR if a new trade comes out.  Otherwise, follow instructions at all times in the 9am and 1pm updates.  Also, we will usually give you a heads-up if we think we are going to send an email outside of these time frames but it is rare that we do.

1:30pm (EST)

Louisiana-Pacific (LPX, $10.10, up $0.05)

May 11 calls (LPX110521C00011000, $0.85, up $0.05)

Entry Price:  $0.70 (1/5/11)

Exit Target: $1.40

Return: 21%

Stop Target: None

Action:  Shares were up 1.5% to $10.25 earlier today and we said we should see a quick run to $11.50.  Continue to hold.

 

Brocade Communications (BRCD, $5.69, down $0.03)

July 6 calls (BRCD110716C00006000, $0.74, flat)

Entry Price:  $0.67 (1/4/11)

Exit Target: $1.35

Return: 10%

Stop Target: None

Action:  The 52-week high is $8.05 which would be nice to see by July.  The company is still an attractive takeover target and a run and close above $6 would be bullish over the near-term.  Continue to hold.   


Constellation Brands (STZ, $20.20, down $1.38) 

February 22.50 calls (STZ110219C00022500, $0.20, down $0.35)

Entry Price:  $0.35 (1/4/11)

Exit Target: $0.70

Return: -43%

Stop Target: None

Action:  The company missed on their revenue number but raised guidance for 2011.  Since we have February options, they might recover.  These are cheap options so we will ride the storm out as they do not expire for another 43 days.

 

Micron Technology (MU, $8.61, up $0.07)

April 9 calls (MU110416C00009000, $0.68, up $0.04)

Entry Price:  $0.50 (1/3/11)

Exit Target: $1.00

Return: 36%

Stop Target: None

Action:  We have a $10 price target on shares over the near-term which gets these options to a least $1. 


Riverbed Technology (RVBD, $38.54, up $1.17)

March 40 calls (RVBD110319C00040000, $3.10, up $0.40)

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 82%

Stop Target: 85 cents

Action:  We may close half of the trade once $3.40 is hit.  This would make it a risk-free trade going forward but we don’t want to close too soon.  We are looking for shares to run past $40 and our near-term target is $45.    


Skyworks Solutions (SWKS, $30.16, down $0.04)

May 32 calls (SWKS110521C00032000, $2.20, flat) 

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 29%

Stop Target: 85 cents

Action:  Shares have traded to a high of $30.92.  Continue to hold.

 

JDS Uniphase (JDSU, $15.77, up $0.74)

March 15 calls (JDSU110319C00015000, $1.55, up $0.45)

Entry Price:  $0.78 (12/27/10)

Exit Target: $1.60

Return: 99%

Stop Target: None

Action:  The stock is getting a 5% pop after the Fiber-Optic sector got some positive comments but we have been on JDSU since November.  We closed out a triple-digit winner on the March 12’s calls and this was our “rollover” trade”.  There will be a little resistance in the $16-$17 area but if cleared, shares should see $20.  Continue to hold.


Seattle Genetics (SGEN, $15.83, up $0.29)

March 17.50 calls (SGEN110319C00017500, $0.90, up $0.05)

Entry Price:  $0.70 (12/27/10)

Exit Target: $1.40

Return: 29%

Stop Target: None

Action:  Continue to hold.


Jabil Circuit (JBL, $21.47, up $0.21)

March 19 calls (JBL110319C00019000, $3.10, up $0.20)

Entry Price:  $0.70 (12/14/10)

Exit Target: $1.50+ (closed half @ $1.70 on 12/21/10)

Return: 243%

Stop Target:  $1.90 (HARD STOP)

Action:  All smiles here.  Continue to hold. 


THQ (THQI, $6.20, down $0.16)      

June 6 calls (THQI110618C00006000, $1.20, flat)

Entry Price:  $0.75 (12/8/10)

Exit Target: $2.00

Return: 60%

Stop Target: None

Action:  Continue to hold.


Electronic Arts (ERTS, $16.29, up $0.01)

March 20 calls (ERTS110319C00020000, $0.16, flat)

Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: -27%

Stop Target: None

Action:  Continue to hold. 


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)

American Tower April 60 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.

We will update this section in the morning.

================

9:00am (EST)

Louisiana-Pacific (LPX, $10.05, up $0.24)

May 11 calls (LPX110521C00011000, $0.80, up $0.15)

Entry Price:  $0.70 (1/5/11)

Exit Target: $1.40

Return: 14%

Stop Target: None

Action:  The close above $10 was nice and should clear the way to a straight run up to $11.50.  If shares can clear this level they would then be on track to challenge their 52-week high of $13.44.     

 

Brocade Communications (BRCD, $5.72, up $0.16)

July 6 calls (BRCD110716C00006000, $0.74, up $0.06)

Entry Price:  $0.67 (1/4/11)

Exit Target: $1.35

Return: 10%

Stop Target: None

Action:  The 52-week high is $8.05 which would be nice to see by July.  The company is still an attractive takeover target and a run and close above $6 would be bullish over the near-term.  Continue to hold.   


Constellation Brands (STZ, $21.58, up $0.11) 

February 22.50 calls (STZ110219C00022500, $0.55, up $0.10)

Entry Price:  $0.35 (1/4/11)

Exit Target: $0.70

Return: 57%

Stop Target: None

Action:  The company beat expectations but fell shy on sales so we will have to see how we open.  Set limit prices to close the calls at 70 cents, we might get lucky at the open, but if not, we will have to monitor the trade.  We may sent out a Trade Alert, if needed.

 

Micron Technology (MU, $8.54, up $0.10)

April 9 calls (MU110416C00009000, $0.64, up $0.06)

Entry Price:  $0.50 (1/3/11)

Exit Target: $1.00

Return: 28%

Stop Target: None

Action:  Shares touched a high of $8.78 on Wednesday and the options traded up to 71 cents.  We have a $10 price target on shares over the near-term which gets these options to a least $1. 


Riverbed Technology (RVBD, $37.37, up $0.09)

March 40 calls (RVBD110319C00040000, $2.70, up $0.10)

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 59%

Stop Target: 85 cents

Action:  We are looking for shares to run past $40 and our near-term target is $45.    


Skyworks Solutions (SWKS, $30.20, up $0.57)

May 32 calls (SWKS110521C00032000, $2.20, up $0.25) 

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 29%

Stop Target: 85 cents

Action:  The close above $30 was golden.  Continue to hold.

 

JDS Uniphase (JDSU, $15.03, up $0.25)

March 15 calls (JDSU110319C00015000, $1.10, up $0.15)

Entry Price:  $0.78 (12/27/10)

Exit Target: $1.60

Return: 42%

Stop Target: None

Action:  Shares matched their 52-week high from Monday of $15.18 and looked poised for continued gains.  There will be a little resistance in the $16-$17 area but if cleared, shares should see $20.  Continue to hold.


Seattle Genetics (SGEN, $15.54, up $0.20)

March 17.50 calls (SGEN110319C00017500, $0.85, up $0.10)

Entry Price:  $0.70 (12/27/10)

Exit Target: $1.40

Return: 21%

Stop Target: None

Action:  Continue to hold.


Jabil Circuit (JBL, $21.26, up $0.46)

March 19 calls (JBL110319C00019000, $2.90, up $0.40)

Entry Price:  $0.70 (12/14/10)

Exit Target: $1.50+ (closed half @ $1.70 on 12/21/10)

Return: 229%

Stop Target:  $1.90 (HARD STOP)

Action:  The options are moving in sync with the stock because they are deep “in-the-money”.  Shares could run to $25 over the next few months.  Continue to hold. 


THQ (THQI, $6.41, up $0.05)

June 6 calls (THQI110618C00006000, $1.30, up $0.10)

Entry Price:  $0.75 (12/8/10)

Exit Target: $2.00

Return: 73%

Stop Target: None

Action:  Continue to hold.


Electronic Arts (ERTS, $16.28, down $0.10)

March 20 calls (ERTS110319C00020000, $0.16, down $0.02)

Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: -27%

Stop Target: None

Action:  Continue to hold.  


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)

American Tower April 60 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.


Pfizer (PFE, $18.11, up $0.12)

March 18 calls (PFE11031900018000, $0.67, up $0.07)

Thoughts:  It might be time to pull the trigger…


TiVo (TIVO, $9.85, up $0.80)

March 17.50 calls (TIVO110521C00017500, $0.73, up $0.27)

March 20 calls (TIVO110521C00020000, $0.42, up $0.10)

Thoughts:  TiVo made some noise yesterday but we didn’t hear much on the litigation front.  Still, the more was impressive and the pressure for DirectTV to settle could gain some speed. 

The March 20 calls are a stretch and the prices just became inflated following yesterday’s big move.  The 17.50’s opened at 55 cents which would have been an ideal entry price but there is still a good chance they break $1.00-$1.25 if the momentum continues.  


Imax (IMAX, $28.12, up $0.61)

June 35 calls (IMAX110618C00035000, $1.50, up $0.10)

Thoughts:  There is more open interest in the June 40 strike, so, we want to get ahead of them if a buyout is coming.  The bid/ask ($1.10/$1.55) is wide enough to drive a truck through and we would love to get these for under a buck.  Watch for now.


JP Morgan (JPM, $44.70, up $0.54),

January 45 calls (JPM110122C00045000, $0.87, up $0.19)

Thoughts:  We mentioned the company reports earnings on January 14, and these options do not expire until afterwards, or a week later.  These options surged nearly 30% yesterday and we only list them because we think they can continue higher into the news.  The plan would be to exit by next Thursday but we are probably just going to watch this one.


Green Mountain Coffee Roasters (GMCR, $34.14, up $0.54)

February 40 calls (GMCR110219C00040000, $0.60, up $0.05) 

Thoughts:  We almost want to make this a strangle option trade but shares have been trading higher on renewed takeover talk.  Shares easily move 20% but the trend has been higher and there is a lot of open interest in this strike.  If shares can rally up to $36-$37 which is resistance this may be good for a quick 50% on the options.  However, if a buyout offer comes, these options will soar.


Best Buy (BBY, $35.70, up $0.65) 

March 40 calls (BBY110319C00040000, $0.55, up $0.20)

Thoughts:  Shares have been trading higher on rumors that someone is interested in taking the company private.  The stock got pounded after announcing earnings but have found solid support in the mid-$30’s.  We think a run back to $40 is in the cards.


CurrencyShares Euro Trust (FXE, $131.04, down $1.41)

February 129 puts (FXE110219P00129000, $1.75, up $0.45)

February 125 puts (FXE110219P00125000, $0.70, up $0.15)

Thoughts:  We were hoping these 129’s would get to under a buck because we knew from the chart a breakdown was coming.  We said this morning we believed a break below $130 was in the cards but we will watch.  We would like to see shares test $133-$134 again before shorting this one but we might not get the chance.  We may add the 125’s this morning so stay close to you inbox.


Schnitzer Steel Industries (SCHN, $68.10, up $0.37)

January 70 calls (SCHN110122C00070000, $1.80, up $0.20)

Thoughts:  The company reports earnings after the bell..


Bank of America (BAC, $14.50, up $0.26)

February 14 calls (BAC110219C00014000, $0.95, up $0.15) 

Thoughts:  Wow, BofA is starting to move and these options have doubled since last week.   


Darden Restaurants (DRI, $46.16, down $0.16)

April 50 calls (DRI110416C00050000, $0.90, down $0.20)

Thoughts:  Darden could test $44 so we will continue watching this one.  If shares do test strong support then we will have to wait and see if it holds.  Either way, we think shares are a good buy at these levels.  As far as the options, watch for now.