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.

12:10pm (EST)

CurrencyShares Euro Trust (FXE, $135.53, down $1.33)

March 134 puts (FXE110319P00134000, $1.85, up $0.40)

Entry Price:  $1.60 (1/28/11)
Exit Target: $3.20
Return: 16%
Stop Target: 80 cents

Action:  We wanted to add some puts ahead of the weekend because we do have some open trades.  The euro seems to have stalled at these levels and we are expecting a test back to $1.30.  We also don’t like how February is setting up for the market. 

 

Jabil Circuit (JBL, $19.79, down $0.82)

March 21 calls (JBL110319C00021000, $0.70, flat)

Entry Price:  $0.70 (1/26/11)
Exit Target: $1.40
Return: 0%
Stop Target: None

Action:  Let’s see where we are at by next Wednesday.  We don’t want to panic today but we do want to be safe and prepare for a possible test to the downside.

 
PowerShares QQQ (QQQQ, $55.75, down $1.43)

March 58 calls (QQQQ110319C00058000, $0.60, down $0.30)

Entry Price:  $0.75 (1/21/11)
Exit Target: $1.50
Return: -20%
Stop Target: None

Action:  We are looking for the Q’s to test $60 which gets these options to $2.  If we test support, we think we can bounce.  Continue to hold.


Spider S&P 500 (SPY, $128.09, down $1.90)

February 131 calls (SPY110219C00131000, $0.75, down $0.45)

Entry Price:  $0.95 (1/21/11)
Exit Target: $1.90
Return: -21%
Stop Target: None

Action:  We said this is going to be a short-term trade and that we could be out by Friday or early next week.  We are going to hold until next Monday or Tuesday.


Micron Technology (MU, $10.17, down $0.42)

April 10 calls (MU110416C00010000, $1.00, down $0.25)

Entry Price:  $0.75 (1/21/11)
Exit Target: $1.50
Return: 33%
Stop Target: None

Action:  Close half of the trade at current levels.

 
JPMorgan Chase (JPM, $44.60, down $0.50)

February 46 calls (JPM110219C00046000, $0.50, down $0.10)

Entry Price:  $0.88 (1/12/11)
Exit Target: $1.75
Return: -43%
Stop Target: None

Action:  Continue to hold.


Apollo Group (APOL, $41.54, down $0.75)

February 34 puts (APOL110219P00035000, $0.10, flat)

Entry Price:  $0.85 (1/7/11)
Exit Target: $1.70 (closed half @ $1.70 on 1/10/11)
Return: 6%
Stop Target: None

Action:  We closed half of the trade at $1.70 on 1/10/11 and the current 14 cents on the other half gives an average price of $0.90 so far.  Continue to hold the other half.
 

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

July 6 calls (BRCD110716C00006000, $0.65, down $0.05)

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, $31.15, down $1.60)

May 32 calls (SWKS110521C00032000, $2.80, down $0.50)

Entry Price:  $1.70 (12/29/10)
Exit Target: $3.40 (closed half @ $3.30 on 1/18/11)
Return: 79%
Stop Target: $1.20, raise to $2.00 (HARD STOP on other half)

Action:  Close the other half of this trade.


Other 2011 Portfolio OPEN positions (5):  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 2010)
American Tower April 60 calls (from October 2010)
Electronic Arts March 20 calls (from November 2010)
Constellation Brands February 22.50 calls (from January 2011)
Vivus June 14 calls (from January 2011)


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 Monday with a fresh update and some new possible plays.

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

10:50am

CurrencyShares Euro Trust (FXE, $135.90, down $0.96)

Buy to OPEN March 134 puts (FXE110319P00134000, $1.60, up $0.15)

Action:  We have been waiting for the Euro to rally back to these levels and we are going to go with these put options.  Use limit prices at current levels but do not pay more than $1.70-$1.80 for these options.  They are moving quickly this morning so again, do not pay over $1.80, but you should be able to get them for $1.60-$1.65 right now.   

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

9:10am (EST)

Jabil Circuit (JBL, $20.61, up $0.76)

March 21 calls (JBL110319C00021000, $1.00, up $0.30)

Entry Price:  $0.70 (1/26/11)
Exit Target: $1.40
Return: 43%
Stop Target: None

Action:  Jabil made a nice pop over our $20.25 resistance target and we are hoping shares can run back towards $22 by today or early next week.

PowerShares QQQ (QQQQ, $57.18, up $0.35)

March 58 calls (QQQQ110319C00058000, $0.90, up $0.08)

Entry Price:  $0.75 (1/21/11)
Exit Target: $1.50
Return: 20%
Stop Target: None

Action:  We are looking for the Q’s to test $60 which gets these options to $2.  Continue to hold.


Spider S&P 500 (SPY, $129.99, up $0.32)

February 131 calls (SPY110219C00131000, $1.18, up $0.05)

Entry Price:  $0.95 (1/21/11)
Exit Target: $1.90
Return: 24%
Stop Target: None

Action:  We said this is going to be a short-term trade and that we could be out by Friday or early next week.  We may close half today but we will probably let things ride over the weekend.  


Micron Technology (MU, $10.59, up $0.64)

April 10 calls (MU110416C00010000, $1.25, up $0.40)

Entry Price:  $0.75 (1/21/11)
Exit Target: $1.50
Return: 67%
Stop Target: None

Action:  Shares were up over 6% yesterday and we are expecting a run up to $11-$12, quickly.  We may lock in half profits if we hit a double today but let’s see where we are at in our afternoon update.

JPMorgan Chase (JPM, $45.10, up $0.12)

February 46 calls (JPM110219C00046000, $0.58, flat)

Entry Price:  $0.88 (1/12/11)
Exit Target: $1.75
Return: -34%
Stop Target: None

Action:  Continue to hold.
 

Apollo Group (APOL, $42.29, up $0.22)

February 34 puts (APOL110219P00035000, $0.10, flat)

Entry Price:  $0.85 (1/7/11)
Exit Target: $1.70 (closed half @ $1.70 on 1/10/11)
Return: 6%
Stop Target: None

Action:  We closed half of the trade at $1.70 on 1/10/11 and the current 14 cents on the other half gives an average price of $0.90 so far.  Continue to hold the other half.
 

Brocade Communications (BRCD, $5.88, up $0.12)

July 6 calls (BRCD110716C00006000, $0.70, up $0.07)

Entry Price:  $0.67 (1/4/11)
Exit Target: $1.35
Return: 4%
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, $32.75, up $1.26)

May 32 calls (SWKS110521C00032000, $3.30, up $0.80)

Entry Price:  $1.70 (12/29/10)
Exit Target: $3.40 (closed half @ $3.30 on 1/18/11)
Return: 94%
Stop Target: $1.20, raise to $2.00 (HARD STOP on other half)

Action:  We’ve got our triple-digit gain back.  Continue to hold the other half but we are raising the stop.
 

Other 2011 Portfolio OPEN positions (5):  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 2010)
American Tower April 60 calls (from October 2010)
Electronic Arts March 20 calls (from November 2010)
Constellation Brands February 22.50 calls (from January 2011)
Vivus June 14 calls (from January 2011)


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.


Orexigen Therapeutics (OREX, $8.74, down $0.41)

February 5 puts (OREX110219P00005000, $0.45, up $0.10)

Thoughts:  We are expecting BIG news on this stock any day now.  These options are a lottery play but it’s a bet on the company’s diet drug, Contrave, not getting the green light from the FDA.
 

Molycorp (MCP, $47.26, up $1.41)

February 55 calls (MCP110219C00055000, $0.80, up $0.20)

February 50 calls (MCP110219C00050000, $2.00, up $0.50)

Thoughts:  We would love to get the 50’s for a buck but we may have to move out to the March options while we find the perfect entry point for getting in a trade.  The company is also offering additional shares which some investors feel is a bad thing but it’s not.  Molycorp could double and hit $100 this year if shares get the momentum we think they are going to get.  It’s hard to say when but that is what our gut is telling us.

Patriot Coal (PCX, $24.90, down $0.49)

March 28 calls (PCX110319C00028000, $1.15, down $0.20)

Thoughts:  Watch for now.


CurrencyShares Euro Trust (FXE, $136.48, up $0.13)

March 135 puts (FXE110319P00130000, $1.90, flat)

Thoughts:  We have been waiting for the Euro to rally back to these levels and these puts look attractive.  There is still a chance the Euro can trade up to $138-$140 which would be the ideal short.  Continue to watch.


Cree (CREE, $51.85, down $0.50)

March 55 calls (CREE110319C00055000, $1.75, down $0.20)

Thoughts:  Watch for now but let’s not forget shares dropped over 20% last week and could still be vulnerable.  However, CREE is a fast-mover so we don’t want to miss a run to the upside.


Imax (IMAX, $26.28, up $0.02)

June 35 calls (IMAX110618C00035000, $0.50, down $0.10)

Thoughts:  Shares have lost 20% since the high of $32.30 which was hit on the last trading day for 2010.  The company is subject to takeover rumors but continues to do well as it expands and grows into new markets.  Tempting…


Green Mountain Coffee Roasters (GMCR, $34.45, down $0.92)

March 38 calls (GMCR110319C00038000, $1.20, down $0.30)

Thoughts:  Watch for now but the option activity is picking up.