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.

12:35pm (EST)

Apollo Group (APOL, $35.89, down $2.09)

February 34 puts (APOL110219P00035000, $1.70, up $0.75)

Entry Price:  $0.85 (1/7/11)

Exit Target: $1.70

Return: 100%

Stop Target: None

Action:  Close half the trade at current levels.

Apollo is falling in sympathy with Strayer and reports after the bell today and here is the situation.  We can’t imagine the company saying anything good to impress Wall Street but shares could bounce back on blowout earnings.  The prudent thing to do would be to close half to make it a risk free trade which is what we are going to do.

Apollo can move 10% after the announcement but we don’t want to take that chance on a move higher which is why we are closing half.  We doubt it happens and we hope shares drop 10% but we are being smart.


Louisiana-Pacific (LPX, $10.02, down $0.05)

May 11 calls (LPX110521C00011000, $0.75, down $0.05)

Entry Price:  $0.70 (1/5/11)

Exit Target: $1.40

Return: 7%

Stop Target: None

Action:  These options have 130 days before they expire and we are looking for the stock to test its 52-week high of $13.44 over the next 5 months.  This would make the calls worth $2.50 if our price target of $13.50 is hit.  Continue to hold.

 

Brocade Communications (BRCD, $5.64, down $0.07)

July 6 calls (BRCD110716C00006000, $0.68, down $0.05)

Entry Price:  $0.67 (1/4/11)

Exit Target: $1.35

Return: 1%

Stop Target: None

Action:  These options have 186 days before expiration and we think shares will be at $8 come summertime.  This would get the call options to $2.  Continue to hold.   

   

Micron Technology (MU, $8.45, down $0.20)

April 9 calls (MU110416C00009000, $0.60, down $0.07)

Entry Price:  $0.50 (1/3/11)

Exit Target: $1.00

Return: 20%

Stop Target: None

Action:  The April options have 95 days before they expire.  We have a $10 price target on shares over the near-term which gets these options to a least $1. 


Riverbed Technology (RVBD, $38.42,up $0.07)

March 40 calls (RVBD110319C00040000, $3.00, flat)

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40 (closed half @ $3.00 on 1/7/11)   

Return: 76%

Stop Target: $1.90 

Action:  The March options have 67 days before expiration.  We closed half of the trade at $3 on Friday and the other half is holding up well.   


Skyworks Solutions (SWKS, $30.89, up $0.65)

May 32 calls (SWKS110521C00032000, $2.55, up $0.30) 

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 50%

Stop Target: $1.25 

Action:  The May options have 130 days before they expire and we are expecting big things for this trade.  We think Skyworks is headed to $35, possibly $40 over the next 5 months.  Continue to hold.

 

JDS Uniphase (JDSU, $16.31, up $0.17)

March 15 calls (JDSU110319C00015000, $1.90, up $0.05)

Entry Price:  $0.78 (12/27/10)

Exit Target: $1.60 (closed half @ $1.80 on 1/7/11)

Return: 137%

Stop Target: None

Action:  Continue to hold the other half.  We think JDSU is headed to $20 over the near-term.


Seattle Genetics (SGEN, $15.51, down $0.08)

March 17.50 calls (SGEN110319C00017500, $0.80, down $0.05)

Entry Price:  $0.70 (12/27/10)

Exit Target: $1.40

Return: 14%

Stop Target: None

Action:  Continue to hold.


Jabil Circuit (JBL, $20.66, down $0.41)

March 19 calls (JBL110319C00019000, $2.35, down $0.35)

Entry Price:  $0.70 (12/14/10)

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

Return: 182%

Stop Target:  $2.25 (HARD STOP)

Action:  We have been stopped out of the other half of this trade as the options traded to a low of $2.20.  The average closing price was $1.975 which was well over our $1.50 target so we are very pleased with the results.  We will do some more chart work but we may be getting another buying opportunity with today’s 3% drop. 


THQ (THQI, $6.28, down $0.02) 

June 6 calls (THQI110618C00006000, $1.10, down $0.10)

Entry Price:  $0.75 (12/8/10)

Exit Target: $2.00

Return: 60%

Stop Target: Set one at 50 cents

Action:  The June calls have 158 days before expiration.  Continue to hold but we may close half if shares fall below $6.  We don’t expect them to but we want to protect our profits.  We have also listed a stop target.


Electronic Arts (ERTS, $15.98, down $0.07)

March 20 calls (ERTS110319C00020000, $0.14, flat) 

Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: -36%

Stop Target: None

Action:  The company reports earnings on February 7.  Continue to hold.  


Other 2010 Portfolio OPEN positions (3):  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)

Constellation Brands February 22.50 calls (from January) 


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)

Apollo Group (APOL, $37.98, down $1.49)

February 34 puts (APOL110219P00035000, $0.95, up $0.20)

Entry Price:  $0.85 (1/7/11)

Exit Target: $1.70

Return: 12%

Stop Target: None

Action:  Shares were down another $1.18, to $36.80, in after-hours trading on Friday night but this morning Apollo is down $3.59 to $34.39.

The January 34’s traded over 6,700 contracts on Friday but we went with the February puts to give us more time.  We are hoping the company “delays” earnings because of the recent scrutiny on the sector or they come in with some nasty numbers.  The company reports after the bell today.


Louisiana-Pacific (LPX, $10.07, up $0.09)

May 11 calls (LPX110521C00011000, $0.80, flat)

Entry Price:  $0.70 (1/5/11)

Exit Target: $1.40

Return: 14%

Stop Target: None

Action:  Continue to hold.

 

Brocade Communications (BRCD, $5.71, up $0.04)

July 6 calls (BRCD110716C00006000, $0.73, up $0.03)

Entry Price:  $0.67 (1/4/11)

Exit Target: $1.35

Return: 9%

Stop Target: None

Action:  Continue to hold.   

   

Micron Technology (MU, $8.65, up $0.07)

April 9 calls (MU110416C00009000, $0.67, up $0.01)

Entry Price:  $0.50 (1/3/11)

Exit Target: $1.00

Return: 34%

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, $38.35, down $0.11)

March 40 calls (RVBD110319C00040000, $3.00, down $0.10)

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40 (closed half @ $3.00 on 1/7/11)   

Return: 76%

Stop Target: 85 cents, raise to $1.90 

Action:  We closed half of the trade at $3 on Friday.   


Skyworks Solutions (SWKS, $30.24, up $0.09)

May 32 calls (SWKS110521C00032000, $2.25, up $0.05) 

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 32%

Stop Target: $1.25 

Action:  Continue to hold.

 

JDS Uniphase (JDSU, $16.24, up $0.24)

March 15 calls (JDSU110319C00015000, $1.85, up $0.10)

Entry Price:  $0.78 (12/27/10)

Exit Target: $1.60 (closed half @ $1.80 on 1/7/11)

Return: 134%

Stop Target: None

Action:  We closed half of the trade on Friday only because we wanted to protect some of our profits but we think shares continue higher over the next three months.


Seattle Genetics (SGEN, $15.59, down $0.15)

March 17.50 calls (SGEN110319C00017500, $0.85, down $0.05)

Entry Price:  $0.70 (12/27/10)

Exit Target: $1.40

Return: 21%

Stop Target: None

Action:  Continue to hold.


Jabil Circuit (JBL, $21.07, down $0.38)

March 19 calls (JBL110319C00019000, $2.70, down $0.45)

Entry Price:  $0.70 (12/14/10)

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

Return: 214%

Stop Target:  $2.25 (HARD STOP)

Action:  Continue to hold the other half.


THQ (THQI, $6.30, up $0.15) 

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, $16.05, down $0.18)

March 20 calls (ERTS110319C00020000, $0.14, flat) 

Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: -36%

Stop Target: None

Action:  Continue to hold.  


Other 2010 Portfolio OPEN positions (3):  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)

Constellation Brands February 22.50 calls (from January) 


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, $18.34, up $0.16)

February 18 calls (PFE110219C00018000, $0.66, up $0.09) 

March 18 calls (PFE11031900018000, $0.78, up $0.08)

Thoughts:  We did a big write-up in our Weekly last night on Pfizer but we already have two drug stocks for our Covered Call portfolio.


TiVo (TIVO, $9.98, up $0.06)

May 17.50 calls (TIVO110521C00017500, $0.60, down $0.10)

May 20 calls (TIVO110521C00020000, $0.30, down $0.10)

Thoughts:  Watch for now.


Imax (IMAX, $27.21, down $0.65)

June 35 calls (IMAX110618C00035000, $0.95, down $0.20)

Thoughts:  These options came down to under $1 but let’s watch for now.  


JP Morgan (JPM, $43.64, down $0.80)

January 45 calls (JPM110122C00045000, $0.45, down $0.30)

Thoughts:  Watch for now. 


Green Mountain Coffee Roasters (GMCR, $35.92, up $1.29)

February 40 calls (GMCR110219C00040000, $0.90, up $0.20)

Thoughts:  Continue to watch. 


Best Buy (BBY, $35.37,up $0.12) 

March 40 calls (BBY110319C00040000, $0.40, down $0.05)

Thoughts:  These options look tempting but we will wait to see what they look like next week.  Word on Friday was that Best Buy would be selling Ford’s electric charging stations this year.  Ford announced its first pure electric vehicle will launch in 2011 and it will team up with Best Buy to install household charging stations for them.


CurrencyShares Euro Trust (FXE, $128.59, down $1.05)

February 125 puts (FXE110219P00125000, $1.10, up $0.15)

Thoughts:  We let this one slip away from us.  Watch for now.


Bank of America (BAC, $14.25, down $0.19)

February 14 calls (BAC110219C00014000, $0.80, down $0.10) 

Thoughts:  Let’s see if $14 holds…


Darden Restaurants (DRI, $46.51, up $0.08)

April 50 calls (DRI110416C00050000, $1.15, up $0.05)

Thoughts:  Still watching…