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. 

12:20pm (EST)

NEW TRADES!!!

Brocade Communications (BRCD, $5.56, up $0.14)

Buy to OPEN July 6 calls (BRCD110716C0006000, $0.67, up $0.04)

Action:  Use limit orders up to 70 cents to get into this trade.  You should be able to get in the position for 70 cents or less by using limit orders but it is okay to go up to 75 cents if they get busy or you are late reading our update.   


Constellation Brands (STZ, $21.21, down $0.40) 

Buy to OPEN February 22.50 calls (STZ110219C00022500, $0.35, down $0.15)

Action:  Shares are down over 1% today following yesterday’s pullback.  This is either weakness or an incredible buy on the February calls.  We are still looking over the company’s numbers and checking sentiment but we like the trade and the options are “cheap”.  Use limit orders at current prices but you can go up to 40-45 cents to get filled.


CURRENT TRADES

 

Micron Technology (MU, $8.51, up $0.23)

April 9 calls (MU110416C00009000, $0.62, up $0.10)

Entry Price:  $0.50 (1/3/11)

Exit Target: $1.00

Return: 24%

Stop Target: None

Action:  These options have 101 days before they expire and are off to a good start.  We have a $10 price target on shares over the near-term.


Riverbed Technology (RVBD, $37.42, down $0.40)

March 40 calls (RVBD110319C00040000, $2.55, down $0.20)

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 50%

Stop Target: 85 cents

Action:  Riverbed opened strong but has come off its high of $39.  The options traded to a high of $3.40 and we probably should have told you to set limit orders to sell half if it was hit.  This would have made it a risk free trade until March no matters what happens but let’s see how the rest of the day plays out.   


Skyworks Solutions (SWKS, $29.33, down $0.23)

May 32 calls (SWKS110521C00032000, $1.80, down $0.10)

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 6%

Stop Target: 85 cents

Action:  Shares have touched a high of $29.93 and it’s only a matter of time before Skyworks takes out $30 and makes a run at our target of $35.  Continue to hold.

 

JDS Uniphase (JDSU, $14.70, down $0.25)

March 15 calls (JDSU110319C00015000, $0.95, down $0.10)

Entry Price:  $0.78 (12/27/10)

Exit Target: $1.60

Return: 22%

Stop Target: None

Action:  Continue to hold.


Seattle Genetics (SGEN, $15.34, down $0.25)

March 17.50 calls (SGEN110319C00017500, $0.75, down $0.10)

Entry Price:  $0.70 (12/27/10)

Exit Target: $1.40

Return: 7%

Stop Target: None

Action:  Continue to hold.


Jabil Circuit (JBL, $20.67, down $0.22)

March 19 calls (JBL110319C00019000, $2.50, down $0.10)

Entry Price:  $0.70 (12/14/10)

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

Return: 200%

Stop Target:  $1.90 (HARD STOP)

Action:  Jabil kissed $21 and continues to show unbelievable strength. 


THQ (THQI, $6.23, up $0.06)

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, $16.42, up $0.04)

March 20 calls (ERTS110319C00020000, $0.18, flat)

Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: -18%

Stop Target: None

Action:  Continue to hold.


American Tower (AMT, $51.54, down $0.10)

April 60 calls (AMT110416C00060000, $0.25, flat)

Entry Price:  $0.65 (10/20/10)

Exit Target: $1.30+

Return:  -62%

Stop Target: None

Action:  Continue to hold.


Chesapeake Energy (CHK, $26.05, down $0.46)

January 25 calls (CHK110122C00025000, $1.40, down $0.30)

Entry Price:  $1.15 (10/13/10)

Exit Target: $2.00

Return: 22%

Stop Target: $1.25

Action:  CLOSE the trade at current levels.  We would rather close this trade and take our profits to open the two new trades then continue hold this one.  Close the trade at current levels.  

Other 2010 Portfolio OPEN positions (1):  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)


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)

Micron Technology (MU, $8.27, up $0.25)

April 9 calls (MU110416C00009000, $0.52, up $0.12)

Entry Price:  $0.50 (1/3/11)

Exit Target: $1.00

Return: 4%

Stop Target: None

Action:  We have a $10 price target on shares over the near-term.


Riverbed Technology (RVBD, $37.82, up $2.65)

March 40 calls (RVBD110319C00040000, $2.75, up $1.05)

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 62%

Stop Target: 85 cents

Action:  Shares hit a fresh 52-week high of $38.54 while the options almost touched $3.  We were really tempted to close half of the trade yesterday but we want to push this one a little more.


Skyworks Solutions (SWKS, $29.56, up $0.93)

May 32 calls (SWKS110521C00032000, $1.95, up $0.35)

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 15%

Stop Target: 85 cents

Action:  Skyworks traded to a 52-week high of $30.14 and made a nice 3% move yesterday.  Our near-term target is $35.  This trade is a little different from Riverbed because we have 2 more months of premium built into these options.  This means we can relax during the “market swings” if the momentum does fade but Skyworks and Riverbed should be big winners in 2011.  Remember though, we are playing options so it’s always a different ballgame. 

 

JDS Uniphase (JDSU, $14.95, up $0.47)

March 15 calls (JDSU110319C00015000, $1.05, up $0.20)

Entry Price:  $0.78 (12/27/10)

Exit Target: $1.60

Return: 35%

Stop Target: None

Action:  JDSU also hit a 52-week high of $15.18 yesterday and the options traded up to $1.14.  Continue to hold.


Seattle Genetics (SGEN, $15.59, up $0.64)

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:  Shares jumped 4% on Monday and set a new high in the process.  Continue to hold.


Jabil Circuit (JBL, $20.89, up $0.80)

March 19 calls (JBL110319C00019000, $2.60, up $0.50)

Entry Price:  $0.70 (12/14/10)

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

Return: 207%

Stop Target:  $1.90 (HARD STOP)

Action:  Jabil kissed $21 and continues to show unbelievable strength. 


THQ (THQI, $6.17, up $0.11)

June 6 calls (THQI110618C00006000, $1.20, up $0.10)

Entry Price:  $0.75 (12/8/10)

Exit Target: $2.00

Return: 60%

Stop Target: None

Action:  Continue to hold.


Electronic Arts (ERTS, $16.38, flat)

March 20 calls (ERTS110319C00020000, $0.18, down $0.02)

Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: -18%

Stop Target: None

Action:  Continue to hold.


American Tower (AMT, $51.63, down $0.01)

April 60 calls (AMT110416C00060000, $0.25, flat)

Entry Price:  $0.65 (10/20/10)

Exit Target: $1.30+

Return:  -62%

Stop Target: None

Action:  Continue to hold.


Chesapeake Energy (CHK, $26.51, up $0.60)

January 25 calls (CHK110122C00025000, $1.70, up $0.45)

Entry Price:  $1.15 (10/13/10)

Exit Target: $2.00

Return: 48%

Stop Target: $1.25

Action:  Continue to hold but we may take action soon.  


Other 2010 Portfolio OPEN positions (1):  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)


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.

Constellation Brands (STZ, $21.61, down $0.54) 

January 22.50 calls (STZ110122C00022500, $0.30, down $0.20)

February 22.50 calls (STZ110219C00022500, $0.50, down $0.25)

Thoughts:  Shares fell 2.4% yesterday and the company will report before the bell on Thursday.  If we do pull the trigger on a trade it will be with the February calls.


Schnitzer Steel Industries (SCHN, $67.60, up $1.21)

January 70 calls (SCHN110122C00070000, $1.60, up $0.40)

Thoughts:  Shares have been hitting fresh 52-week highs lately but we said in our video Sunday night that the options aren’t “liquid” enough for us to trade this one.


Molycorp (MCP, $57.50, up $7.60)

January 60 calls (MCP110122C00060000, $3.50, up $2.75)

January 40 puts (MCP110122P00040000, $0.40, down $0.45)

Action:  We told you last week this could be the perfect strangle option trade.  The calls and puts were both near $1 last Thursday and we said we expected shares to move $10, quickly.  If you acted on our comments, you doubled your money yesterday.


Bank of America (BAC, $14.19, up $0.85)

February 14 calls (BAC110219C00014000, $0.80, up $0.40)

Thoughts:  We said shares would face resistance at $14 and we were hoping to get into this trade as it edged up towards this level.  We didn’t get the chance as shares opened at $13.85.  The options opened at 59 cents but we didn’t feel like chasing this one.  If shares show continued strength we may look at other options.


Brocade Communications (BRCD, $5.43, up $0.14)

July 6 calls (BRCD110716C0006000, $0.63, up $0.03)

Thoughts:  Watch for now.  


Darden Restaurants (DRI, $46.69, up $0.25)

April 50 calls (DRI110416C00050000, $1.20, flat)

Thoughts:  Watch for now.