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.

12:40pm (EST)

JPMorgan Chase (JPM, $44.77, down $0.14)

February 46 calls (JPM110219C00046000, $0.77, down $0.08) 

Entry Price:  $0.88 (1/12/11)

Exit Target: $1.75  

Return: -13%

Stop Target: None

Action:  Continue to hold.


Vivus (VVUS, $11.21, up $0.01)        

June 14 calls (VVUS110618C00014000, $1.35, down $0.05)

Entry Price:  $1.10 (1/12/11)

Exit Target: $1.70    

Return: 23%

Stop Target: 75 cents         

Action:  Vivus should be meeting with the FDA by the end of this month to discuss the content of the proposed resubmission for Qnexa, the company’s diet drug which they are hoping to get a fast-track approval on.  Vivus is also filing a new drug application (NDA) filing for Avanafil, its “good wood” drug, in the second quarter of 2011.    These options have 150 days before they expire.  Continue to hold.

 

Apollo Group (APOL, $43.28, up $0.97)

February 34 puts (APOL110219P00035000, $0.15, down $0.05)

Entry Price:  $0.85 (1/7/11)

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

Return: 9%

Stop Target: None

Action:  We closed half at $1.70 last Monday and the current 20 cents on the other half gives an average price of $0.925.  We may end up breaking even on this trade but we feel when the other Educational stocks start to report earnings, and miss expectations, then Apollo will reverse course.  In the meantime, we will have to wait it out.


Louisiana-Pacific (LPX, $9.87, down $0.06)

May 11 calls (LPX110521C00011000, $0.70, flat)

Entry Price:  $0.70 (1/5/11)

Exit Target: $1.40

Return: 0%

Stop Target: None

Action:  Continue to hold.     

 

Brocade Communications (BRCD, $5.78, down $0.20)

July 6 calls (BRCD110716C00006000, $0.72, down $0.10)

Entry Price:  $0.67 (1/4/11)

Exit Target: $1.35

Return: 7%

Stop Target: 68 cents  

Action:  Continue to hold.   

   

Micron Technology (MU, $9.69, down $0.02)

April 9 calls (MU110416C00009000, $1.25, down $0.05)

Entry Price:  $0.50 (1/3/11)

Exit Target: $1.00, raise to $2.00

Return: 150%

Stop Target:  $1.00 (HARD STOP)

Action:  Close HALF of the trade at current levels. 

We will continue to hold the other half but we want to protect profits if $10 proves to be a brick wall.


Riverbed Technology (RVBD, $38.65, down $0.79)     

March 40 calls (RVBD110319C00040000, $3.00, down $0.40)

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40, raise to $4+ (closed half @ $3.00 on 1/7/11)   

Return: 76%

Stop Target: $2.50 (HARD STOP on other half) 

Action:  Shares have slipped 2% today so we have made the $2.50 a hard stop.  The company announces earnings on January 27.     


Skyworks Solutions (SWKS, $32.32, down $0.19)

May 32 calls (SWKS110521C00032000, $3.30, down $0.10)   

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 94%

Stop Target: $2.50       

Action:  Close HALF of the trade at current levels. 

With earnings coming up, we want to lock in at least half profits and let the rest ride.    

 

JDS Uniphase (JDSU, $16.98, down $0.79)

March 15 calls (JDSU110319C00015000, $2.40, down $0.70)

Entry Price:  $0.78 (12/27/10)

Exit Target: $4 (closed half @ $1.80 on 1/7/11)

Return: 169%

Stop Target: $1.75, raise to $2.25 (HARD STOP)

Action:  Our stop hasn’t been hit so hold tight.  If it is, make sure you close the position.   


Seattle Genetics (SGEN, $16.82, down $0.33)

March 17.50 calls (SGEN110319C00017500, $1.20, down $0.10) 

Entry Price:  $0.70 (12/27/10)

Exit Target: $1.40

Return: 71%

Stop Target: 75 cents (HARD STOP)

Action:  Close HALF of the trade at current levels.  Continue to hold the other half.


THQ (THQI, $5.90, down $0.02) 

June 6 calls (THQI110618C00006000, $0.90, flat) 

Entry Price:  $0.75 (12/8/10)

Exit Target: $2.00

Return: 20%

Stop Target: 50 cents

Action:  Continue to hold.   


Electronic Arts (ERTS, $16.00, up $0.05)

March 20 calls (ERTS110319C00020000, $0.15, flat) 

Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: -32%

Stop Target: None

Action:  These were “cheap” out-of-the-money options as a 10 contract trade would have cost you $200.  When we profiled these options back in November, we were looking at EA as a takeover target because of its online gaming presence.  That theory is still in play.  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 be back in the morning with some fresh ideas.

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

9:00am (EST)

JPMorgan Chase (JPM, $44.91, up $0.46)

February 46 calls (JPM110219C00046000, $0.85, down $0.03) 

Entry Price:  $0.88 (1/12/11)

Exit Target: $1.75  

Return: -3%

Stop Target: None

Action:  JPMorgan came down off its high of $45.94 but shares should challenge their 52-week high of $48.20 if the Financial sector can stay hot.  The calls traded to a high of $1.28 but we were hoping for more of a pop on Friday so we could’ve closed half of the trade but that wasn’t the case.  The February options have 31 days before they expire.  Continue to hold.


Vivus (VVUS, $11.20, up $0.15)        

June 14 calls (VVUS110618C00014000, $1.40, up $0.10)

Entry Price:  $1.10 (1/12/11)

Exit Target: $1.70    

Return: 27%

Stop Target: 75 cents         

Action:  Vivus should be meeting with the FDA by the end of this month to discuss the content of the proposed resubmission for Qnexa, the company’s diet drug which they are hoping to get a fast-track approval on.  Vivus is also filing a new drug application (NDA) filing for Avanafil, its “good wood” drug, in the second quarter of 2011.    These options have 150 days before they expire.  Continue to hold.

 

Apollo Group (APOL, $42.31, down $0.08)

February 34 puts (APOL110219P00035000, $0.20, down $0.05)

Entry Price:  $0.85 (1/7/11)

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

Return: 12%

Stop Target: None

Action:  We closed half at $1.70 last Monday and the current 20 cents on the other half gives an average price of $0.95.  We may end up breaking even on this trade but we feel when the other Educational stocks start to report earnings, and miss expectations, then Apollo will reverse course.  In the meantime, we will have to wait it out.


Louisiana-Pacific (LPX, $9.93, up $0.25)

May 11 calls (LPX110521C00011000, $0.70, flat)

Entry Price:  $0.70 (1/5/11)

Exit Target: $1.40

Return: 0%

Stop Target: None

Action:  The company reports in early February and the May options have 122 days before they expire.  Shares we hurt by a downgrade last week but bounced back strong on Friday by adding over 2%.  Continue to hold for now but we need to see a run back over $10.     

 

Brocade Communications (BRCD, $5.98, up $0.07)

July 6 calls (BRCD110716C00006000, $0.82, up $0.02)

Entry Price:  $0.67 (1/4/11)

Exit Target: $1.35

Return: 22%

Stop Target: 68 cents  

Action:  Shares traded to over $6 on Friday which was a good sign.  Continue to hold.   

   

Micron Technology (MU, $9.71, up $0.08)

April 9 calls (MU110416C00009000, $1.30, up $0.05)

Entry Price:  $0.50 (1/3/11)

Exit Target: $1.00, raise to $2.00

Return: 160%

Stop Target:  $1.00 (HARD STOP)


Action:  We have a $10 price target on shares over the near-term but the 52-week high is $11.40 which could be taken out as well.  If so, these options will be worth $2.50+.  We have a HARD STOP of $1 to lock in a 100% return no matter what happens from here on out.  We may also close half of the trade if we see weakness after such a strong run but wait for the signal.  The April options still have 87 days before they expire.


Riverbed Technology (RVBD, $39.44, down $0.28)     

March 40 calls (RVBD110319C00040000, $3.40, down $0.10)

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40, raise to $4+ (closed half @ $3.00 on 1/7/11)   

Return: 88%

Stop Target: $1.90, raise to $2.50 

Action:  Riverbed challenged $40 all last week and if it can manage to break through resistance, the move could be huge.  We have bumped our stop target up a little but it is not yet a hard stop on the other half as we are expecting shares to run to $45.  The company announces earnings on January 27.  Continue to hold.  


Skyworks Solutions (SWKS, $32.51, up $0.71)

May 32 calls (SWKS110521C00032000, $3.40, up $0.30)   

Entry Price:  $1.70 (12/29/10)

Exit Target: $3.40

Return: 100%

Stop Target: $1.75, raise to $2.50 

Action:  Shares were near $29 when we got into this trade and we knew the momentum was there to push shares past $30+.  Our target price was $35 for the stock when we initiated the trade but Skyworks is showing breakout possibilities and $35 may be conservative.  The company announces earnings on Thursday so we may close half of the trade before then to protect profits but we expect them to have a superb quarter.  Continue to hold.

 

JDS Uniphase (JDSU, $17.71, up $0.31)

March 15 calls (JDSU110319C00015000, $3.10, up $0.30)

Entry Price:  $0.78 (12/27/10)

Exit Target: $4 (closed half @ $1.80 on 1/7/11)

Return: 214%

Stop Target: $1.75, raise to $2.25 (HARD STOP)

Action:  Shares jumped nearly 2% on Friday and we feel a run to $20 over the near-term is easily doable.   


Seattle Genetics (SGEN, $17.15, down $0.08)

March 17.50 calls (SGEN110319C00017500, $1.30, down $0.10) 

Entry Price:  $0.70 (12/27/10)

Exit Target: $1.40

Return: 86%

Stop Target: 75 cents (HARD STOP)

Action:  We may close half of the trade today to lock in some profits but wait for the word.  Continue to hold.


THQ (THQI, $5.92, down $0.24) 

June 6 calls (THQI110618C00006000, $0.90, down $0.20) 

Entry Price:  $0.75 (12/8/10)

Exit Target: $2.00

Return: 20%

Stop Target: 50 cents

Action:  NPD group, a research firm, said 2010 sales of video games were flat on Friday which caused a pullback in the sector.  Let’s see how we open this morning but we still like THQ for the long-term.   


Electronic Arts (ERTS, $15.95, down $0.09)

March 20 calls (ERTS110319C00020000, $0.15, flat) 

Entry Price:  $0.22 (11/24/10)

Exit Target: $0.50+

Return: -32%

Stop Target: None

Action:  These were “cheap” out-of-the-money options as a 10 contract trade would have cost you $200.  When we profiled these options back in November, we were looking at EA as a takeover target because of its online gaming presence.  That theory is still in play.  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 be adding new ideas today or possibly tomorrow but we wanted to focus on current trades this morning.