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.

1:20pm (EST)

PowerShares QQQ (QQQQ, $55.90, down $0.21)

March 58 calls (QQQQ110319C00058000, $0.60, down $0.10)

Entry Price:  $0.75 (1/21/11)

Exit Target: $1.50 

Return: -20%

Stop Target: None

Action:  We had planned for today to be a down day and wanted to get into these calls today, regardless of the action because the rebound could be huge.  We are expecting a rebound and a retest of the highs for a possible breakout over the next two weeks.  We believe the QQQ’s can run to $60+ if Tech can rebound.


Spider S&P 500 (SPY, $128.40, up $0.32)

February 131 calls (SPY110219C00131000, $0.90, up $0.04)

Entry Price:  $0.95 (1/21/11)

Exit Target: $1.90  

Return: -5%

Stop Target: None

Action:  We will only be holding this trade open for a week or two. 


Micron Technology (MU, $9.85, up $0.25)

April 10 calls (MU110416C00010000, $0.82, up $0.12)

Entry Price:  $0.75 (1/21/11)

Exit Target: $1.50  

Return: 9%

Stop Target: None

Action:  We are expecting a breakout over $10 to a run up to $11-$12.


JPMorgan  Chase (JPM, $45.19, up $0.44)

February 46 calls (JPM110219C00046000, $0.86, up $0.16) 

Entry Price:  $0.88 (1/12/11)

Exit Target: $1.75  

Return: -2%

Stop Target: None

Action:  Continue to hold.


Vivus (VVUS, $8.88, down $1.55)        

June 14 calls (VVUS110618C00014000, $0.40, down $0.60)

Entry Price:  $1.10 (1/12/11)

Exit Target: $1.70    

Return: -64%

Stop Target: 75 cents         

Action:  Shares are down 15% but we aren’t rushing to close the trade.  We will have to do a little research this weekend but the news that the FDA will want more data is all that bad.  The safety data concerning how Qnexa might affect pregnant people will be needed and tests might be required but we like the risk/rewards this trade presents.

 

Apollo Group (APOL, $42.53, down $0.70)

February 34 puts (APOL110219P00035000, $0.14, flat)

Entry Price:  $0.85 (1/7/11)

Exit Target: $1.70 (closed half @ $1.70 on 1/10/11)   

Return: 8%

Stop Target: None

Action:  We closed half at $1.70 on 1/10/11 and the current 14 cents on the other half gives an average price of $0.92 so far.  Continue to hold the other half.

     

Brocade Communications (BRCD, $5.65, down $0.05)

July 6 calls (BRCD110716C00006000, $0.63, down $0.02)

Entry Price:  $0.67 (1/4/11)

Exit Target: $1.35

Return: -6%

Stop Target: None   

Action:  The 52-week high is $8 which gets these calls to $2 on a continued turnaround story.  Brocade could also be a takeover target down the road.  Continue to hold.   

     


Skyworks Solutions (SWKS, $29.24, down $0.74)

May 32 calls (SWKS110521C00032000, $1.70, down $0.40)   

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40 (closed half @ $3.30 on 1/18/11)

Return: 47%

Stop Target: $2.50       

Action:  Skyworks has slipped back below $30 but we are going to give this trade a little wiggle room and see where we are at next week.

        

Electronic Arts (ERTS, $15.55, down $0.21)

March 20 calls (ERTS110319C00020000, $0.07, down $0.03)

Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: -68%

Stop Target: None

Action:  Continue to hold.  These options were only 22 cents and it is a cheap play on a buyout or takeover target.  A 10 contract trade was $220 so we are going to ride this one out to the end.


Other 2011 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 be on Monday with some fresh ideas.

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

9:40am (EST)

NEW TRADES!!!

PowerShares QQQ (QQQQ, $56.38, up $0.29)

Buy to OPEN March 58 calls (QQQQ110319C00058000, $0.75, up $0.05)

Action:  Use limit orders up to 80-85 cents.  We are expecting the QQQ’s to run to $60+ if tech can rebound.


Spider S&P 500 (SPY, $128.83, up $0.75)

Buy to OPEN February 131 calls (SPY110219C00131000, $0.95, up $0.09)

Action:  Use limit up to $1-$1.1o to get orders filled. 


Micron Technology (MU, $9.78, up $0.18)

Buy to OPEN April 10 calls (MU110416C00010000, $0.75, up $0.05)

Action:  We like these options at current prices and you should be able to get filled for 80 cents or better.

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

9:00am (EST) 

JPMorgan  Chase (JPM, $44.75, up $1.04)

February 46 calls (JPM110219C00046000, $0.70, up $0.25) 

Entry Price:  $0.88 (1/12/11)

Exit Target: $1.75  

Return: -20%

Stop Target: None

Action:  Financial earnings have been mixed and JPM was one of the “better” ones.  We are looking for a run to $48-$50 if Banks can catch fire again.  Continue to hold.



Vivus (VVUS, $10.43, up $0.03)        

June 14 calls (VVUS110618C00014000, $1.00, flat)

Entry Price:  $1.10 (1/12/11)

Exit Target: $1.70    

Return: -9%

Stop Target: 75 cents         

Action:  There is news out this morning.  It appears the FDA wants more information on Qnexa concerning birth defects.  Shares are under $10 in pre-market action.

 

Apollo Group (APOL, $43.23, up $1.06)


February 34 puts (APOL110219P00035000, $0.14, down $0.04)


Entry Price:  $0.85 (1/7/11)

Exit Target: $1.70 (closed half @ $1.70 on 1/10/11)   

Return: 8%

Stop Target: None


Action:  We closed half at $1.70 on 1/10/11 and the current 14 cents on the other half gives an average price of $0.92 so far.  Continue to hold the other half.

     

Brocade Communications (BRCD, $5.70, up $0.02)


July 6 calls (BRCD110716C00006000, $0.65, up $0.02)


Entry Price:  $0.67 (1/4/11)

Exit Target: $1.35

Return: -3%

Stop Target: None   


Action:  The 52-week high is $8 which gets these calls to $2 on a continued turnaround story.  Brocade could also be a takeover target down the road.  Continue to hold.    

Skyworks Solutions (SWKS, $30.03, down $1.88)


May 32 calls (SWKS110521C00032000, $2.10, down $0.80)   


Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40 (closed half @ $3.30 on 1/18/11)

Return: 59%

Stop Target: $2.50       


Action:  Skyworks fell below $30 in after-hours last night but rebounded to close in positive territory after managed came through on their conference call.  We had the luxury of risk-free trade which is why we are pushing this one.  The May options have 4 months before expiration.  Shares are up over $1 in early action. 


Side note:  The August 40 calls (SWKS110820C00040000, $1.00, down $0.50) also look like a steal.  If shares can roll to $50 by the end of the summer, this would be a 10-bagger. 

        


Electronic Arts (ERTS, $15.76, down $0.08)


March 20 calls (ERTS110319C00020000, $0.10, down $0.03) 


Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: -55%

Stop Target: None


Action:  Continue to hold.  These options were only 22 cents and it is a cheap play on a buyout or takeover target.  A 10 contract trade was $220 so we are going to ride this one out to the end.



Other 2011 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.



PowerShares QQQ (QQQQ, $56.11, down $0.40)


March 58 calls (QQQQ110319C00058000, $0.70, down $0.10)


Thoughts:  We are expecting the QQQ’s to run to $60+ if tech can rebound.



Spider S&P 500 (SPY, $128.08, down $0.17)


February 131 calls (SPY110219C00131000, $0.86, down $0.09)


Thoughts:  If we do a trade today, this will probably be our first choice.  The options are super liquid and the shares trade in tandem with the S&P.  The bid/ask is also within pennies of each other most of the time.



Cree (CREE, $52.36, down $1.27)


March 55 calls (CREE110319C00055000, $2.50, down $0.60)


Thoughts:  Tempting but we don’t want to load up on new trades until confirmation of another rally.    



Jabil Circuit (JBL, $20.65, down $0.25)


March 21 calls (JBL110319C00021000, $1.10, down $0.15)


Thoughts:  These are in line to be added if the Nasdaq recovers from this week’s losses. 



Imax (IMAX, $26.83, up $0.16)


June 35 calls (IMAX110618C00035000, $0.70, flat)


March 30 calls (IMAX110319C00030000, $1.10, down $0.10)


Thoughts:  We like them both and the devil in us would double-down but we will probably go with the June call options.  We like this movie-themed stock a lot.



Green Mountain Coffee Roasters (GMCR, $34.11, down $0.42)


March 38 calls (GMCR110319C00038000, $1.15, down $0.10)


Thoughts:  Green Mountain continues to make water-cooler talk as an attractive takeover candidate.  One of the bigger companies would love to have the K-cups in their lineup.