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. 

1:15pm (EST)

Louisiana-Pacific (LPX, $10.03, up $0.23)

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:  We like this trade a lot and shares appear to be headed to the teens.  The 52-week high is $13.44 and if shares hit $13 you will more than double your money.  These options have 135 days before expiration.    

 

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

July 6 calls (BRCD110716C00006000, $0.75, up $0.07)

Entry Price:  $0.67 (1/4/11)

Exit Target: $1.35

Return: 12%

Stop Target: None

Action:  These options have 191 days before they expire so this trade could be like watching paint dry but money is money.  We hit back-to-back wins on this name near the end of 2010 and we think shares are at another great entry point to play options on.    


Constellation Brands (STZ, $21.38, down $0.09) 

February 22.50 calls (STZ110219C00022500, $0.50, up $0.05)

Entry Price:  $0.35 (1/4/11)

Exit Target: $0.70

Return: 43%

Stop Target: None

Action:  The company reports earnings before the bell tomorrow.  Analysts are looking for 62 cents on $993 million.  If they can beat estimates by a penny or two and hit $1 billion in revenue then we should have a winner.  The “ask” on the option is edging higher today even though shares are slightly lower.

 

Micron Technology (MU, $8.60, up $0.16)

April 9 calls (MU110416C00009000, $0.68, up $0.10)

Entry Price:  $0.50 (1/3/11)

Exit Target: $1.00

Return: 36%

Stop Target: None

Action:  These options have 100 days before they expire and we have a $10 price target on shares over the near-term.


Riverbed Technology (RVBD, $37.49, up $0.21)

March 40 calls (RVBD110319C00040000, $2.80, up $0.20)

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 65%

Stop Target: 85 cents

Action:  March options have 72 days before expiration.  We are looking for shares to run past $40 and our near-term target is $45.    


Skyworks Solutions (SWKS, $29.88, up $0.25)

May 32 calls (SWKS110521C00032000, $2.10, up $0.15) 

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 24%

Stop Target: 85 cents

Action:  Like a high-jumper at the Olympics, Skyworks has cleared the $30 bar in fashion and should make a push to $35.  Continue to hold.

 

JDS Uniphase (JDSU, $15.09, up $0.31)

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:  Continue to hold.


Seattle Genetics (SGEN, $15.35, up $0.01)

March 17.50 calls (SGEN110319C00017500, $0.75, flat)

Entry Price:  $0.70 (12/27/10)

Exit Target: $1.40

Return: 7%

Stop Target: None

Action:  Continue to hold.


Jabil Circuit (JBL, $21.16, up $0.36)

March 19 calls (JBL110319C00019000, $2.80, up $0.30)

Entry Price:  $0.70 (12/14/10)

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

Return: 221%

Stop Target:  $1.90 (HARD STOP)

Action:  We are looking for Jabil to run to $25 over the near-term.  Continue to hold. 


THQ (THQI, $6.35, up $0.01)

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, $16.35, down $0.03)

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, $50.99, down $0.48)

April 60 calls (AMT110416C00060000, $0.20, down $0.05)

Entry Price:  $0.65 (10/20/10)

Exit Target: $1.30+

Return:  -69%

Stop Target: None

Action:  We are going to move American Tower down to the “Hold” section below because there is no reason to provide coverage until shares start to move again.  The stock has always been a slow mover but we think shares still have a shot at $60.  We will leave the trade open and if we take any action, we will let you know.  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.

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11:15am (EST)

NEW TRADE!!!

Louisiana-Pacific (LPX, $9.98, up $0.17)

Buy to OPEN May 11 calls (LPX110521C00011000, $0.70, up $0.05)

Action:  Use limit orders up to 80-85 cents but you should be able to get these options for 70-75 cents.  We like this trade a lot and shares appear to be headed to the teens.  The 52-week high is $13.44 and if shares hit $13 you will more than double your money.  These options have 135 days before expiration.    

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

9:00am (EST)

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

July 6 calls (BRCD110716C00006000, $0.69, up $0.06)

Entry Price:  $0.67 (1/4/11)

Exit Target: $1.35

Return: 3%

Stop Target: None

Action:  These options have 191 days before they expire so this trade could be like watching paint dry but money is money.  We hit back-to-back wins on this name near the end of 2010 and we think shares are at another great entry point to play options on.    


Constellation Brands (STZ, $21.47, down $0.14) 

February 22.50 calls (STZ110219C00022500, $0.45, down $0.05)

Entry Price:  $0.35 (1/4/11)

Exit Target: $0.70

Return: 29%

Stop Target: None

Action:  The company reports earnings on Thursday.  

 

Micron Technology (MU, $8.44, up $0.17)

April 9 calls (MU110416C00009000, $0.59, up $0.07)

Entry Price:  $0.50 (1/3/11)

Exit Target: $1.00

Return: 18%

Stop Target: None

Action:  These options have 100 days before they expire and we have a $10 price target on shares over the near-term.


Riverbed Technology (RVBD, $37.28, down $0.54)

March 40 calls (RVBD110319C00040000, $2.60, down $0.15)

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 53%

Stop Target: 85 cents

Action:  Riverbed made a nice comeback after hitting a high of $39.20 and then a low of $36.80 yesterday.  The options traded to a high of $3.40 which represented a 100% return but we believe they will trade up to $4 or better once shares break $40. 


Skyworks Solutions (SWKS, $29.63, down $0.07)

May 32 calls (SWKS110521C00032000, $1.95, up $0.05) 

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 15%

Stop Target: 85 cents

Action:  Shares reached a high of $29.93 before dipping into negative territory yesterday but managed to finish in the green.  Skyworks appears ready to push past $30 and make a run at our target of $35.  Continue to hold.

 

JDS Uniphase (JDSU, $14.78, down $0.17)

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, $20.89, down $0.09)

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:  Continue to hold. 


THQ (THQI, $6.36, up $0.19)

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, $16.38, flat)

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, $51.47, down $0.16)

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.


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.  

Pfizer (PFE, $17.99, up $0.31)

February 18 calls (PFE110219C00018000, $0.45, up $0.10)

February 19 calls (PFE110219C00019000, $0.14, up $0.03)

March 18 calls (PFE11031900018000, $0.60, up $0.13)

Thoughts:  There was a lot of bullish activity in Pfizer call options yesterday as shares kissed $18 and appear poised to break out.  This level represents serious resistance but a run to $20 appears to be in the cards. 

The Feb 18 call options opened at 35 cents on Tuesday and nearly 9,000 contracts traded hands by the end of the day.  The March 18 calls traded over 2,500 contracts while the April 18’s saw over 13,000 contracts exchange hands. 

Clearly investors are expecting a move higher.  As a side note, the stock pays a dividend of 4.6%.  We like this trade a lot.


CurrencyShares Euro Trust (FXE, $132.45, down $0.52)

February 129 puts (FXE110219P00129000, $1.35, up $0.10)

Thoughts:  We think a break below $130 is in the cards again.


Louisiana-Pacific (LPX, $9.81, up $0.06)

May 11 calls (LPX110521C00011000, $0.65, flat)

Thoughts:  Watch for now. 


Schnitzer Steel Industries (SCHN, $67.73, up $0.13)

January 70 calls (SCHN110122C00070000, $1.60, flat)

Thoughts:  Shares hit another 52-week high of $69.43 yesterday while the options touched $2.10.  The company reports earnings on Thursday.


Molycorp (MCP, $61.80, up $4.30)

January 60 calls (MCP110122C00060000, $5.50, up $2.00)

January 40 puts (MCP110122P00040000, $0.30, down $0.10)

Thoughts:  We knew we should have released this trade last week but we misjudged the momentum.  Yeah, we said shares would move $10, quickly, but a $15 move in a week was more than we had anticipated after the bounce off $45.  In any event, we have been getting TONS of email on this trade which is up nearly 200% since we profiled it as a “strangle” option trade.  If you are in, protect profits.


Bank of America (BAC, $14.24, up $0.05)

February 14 calls (BAC110219C00014000, $0.80, flat)

Thoughts:  If the stock can hold $14 for the rest of the week, we may have to add these call options.  As much as we don’t trust BAC, a trend could be developing.


Darden Restaurants (DRI, $46.70, up $0.01)

April 50 calls (DRI110416C00050000, $1.10, down $0.10)

Thoughts:  Watch for now.