February 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.

1:30pm (EST)

Patriot Coal (PCX, $26.07, down $2.06)

March 30 calls (PCX110319C00030000, $0.90, down $0.80)

Entry Price:  $1.25 (1/31/11)
Exit Target: $2.50
Return: -28%
Stop Target: $1.30 

Action:  We got T-boned by an 11 million block trade that was handled by UBS at $27. We aren’t too worried about it because these options have 43 days before expiration and we think shares are headed past $30, possibility to $35.


CurrencyShares  Euro Trust (FXE, $135.83, down $1.72)

March 134 puts (FXE110319P00134000, $1.65, up $0.50)

Entry Price:  $1.60 (1/28/11)
Exit Target: $3.20
Return: 3%
Stop Target: 80 cents

Action:  We entered this position as a hedge against a market drop but it is a longer-term trade.  We still expect the Euro Trust to fall below $135 by mid-March.  Continue to hold. 

 

Jabil Circuit (JBL, $20.69, up $0.05)

March 21 calls (JBL110319C00021000, $1.00, flat)

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

Action:  The 52-week high for Jabil is $21.78 which was hit back in early January and shares flirted with $21 on Wednesday.  Continue to hold.

PowerShares QQQ (QQQQ, $56.90, down $0.06)

March 58 calls (QQQQ110319C00058000, $0.80, down $0.05) 

Entry Price:  $0.75 (1/21/11)
Exit Target: $1.50
Return: 7%
Stop Target: None

Action:  We are looking for the Q’s to test $60 which gets these options to $2.  We know we haven’t commented more on this trade but it’s that simple.   
 

Spider S&P 500 (SPY, $130.35, down $0.14)

February 131 calls (SPY110219C00131000, $1.15, down $0.15)

Entry Price:  $0.95 (1/21/11)
Exit Target: $1.90 (closed half @ $1.35 on 2/1/11)
Return: 32%
Stop Target: $1.00 (HARD STOP) 

Action:  Continue to hold the other half.
 

Micron Technology (MU, $10.82, down $0.08)

April 10 calls (MU110416C00010000, $1.30, down $0.05)

Entry Price:  $0.75 (1/21/11)
Exit Target: $1.50 (closed half @ $1.00 on 1/28/11)
Return: 53%
Stop Target: $1.00 (HARD STOP) 

Action:  Shares have broke $11 today.  We have placed a stop of $1 on the other half to lock in profits and will move it up as shares move higher.  Continue to hold.

JPMorgan Chase (JPM, $45.19, down $0.26)

February 46 calls (JPM110219C00046000, $0.55, down $0.10)

Entry Price:  $0.88 (1/12/11)
Exit Target: $1.75
Return: -38%
Stop Target: None

Action:  Continue to hold for now. 
 

Brocade Communications (BRCD, $5.87, up $0.14)

July 6 calls (BRCD110716C00006000, $0.65, flat)

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.  Continue to hold.  


Electronic Arts (ERTS, $17.87, down $0.22)

March 20 calls (ERTS110319C00020000, $0.20, down $0.04)

Entry Price:  $0.22 (11/24/10)
Exit Target: $0.50+
Return: -9%
Stop Target: None

Action:  Continue to hold.  
 

Other 2011 Portfolio OPEN positions (4):  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)
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 update this section in the morning.

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

9:00am (EST)

Patriot Coal (PCX, $28.13, down $0.31)

March 30 calls (PCX110319C00030000, $1.70, down $0.05)

Entry Price:  $1.25 (1/31/11)
Exit Target: $2.50
Return: 36%
Stop Target: $1.30 

Action:  Shares traded to a 52-week high of $29.20 yesterday and the options kissed $2.09.  There was heavy buying in the March 35 calls (55 cents) as over 1,500 contracts traded hands.  Buyers are expecting further upside by the looks of things and so are we.


CurrencyShares  Euro Trust (FXE, $137.55, down $0.23)

March 134 puts (FXE110319P00134000, $1.15, down $0.05)

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

Action:  We entered this position as a hedge against a market drop but it is a longer-term trade.  We still expect the Euro Trust to fall below $135 by mid-March.  Continue to hold. 

 

Jabil Circuit (JBL, $20.64, down $0.08)

March 21 calls (JBL110319C00021000, $1.00, down $0.10)

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

Action:  The 52-week high for Jabil is $21.78 which was hit back in early January and shares flirted with $21 on Wednesday.  Continue to hold.

PowerShares QQQ (QQQQ, $56.96, down $0.09)

March 58 calls (QQQQ110319C00058000, $0.85, down $0.05) 

Entry Price:  $0.75 (1/21/11)
Exit Target: $1.50
Return: 13%
Stop Target: None

Action:  We are looking for the Q’s to test $60 which gets these options to $2.  We know we haven’t commented more on this trade but it’s that simple.   


Spider S&P 500 (SPY, $130.49, down $0.26)

February 131 calls (SPY110219C00131000, $1.30, down $0.15)

Entry Price:  $0.95 (1/21/11)
Exit Target: $1.90 (closed half @ $1.35 on 2/1/11)
Return: 39%
Stop Target: $1.00 (HARD STOP) 

Action:  Continue to hold the other half.
 

Micron Technology (MU, $10.89, up $0.08)

April 10 calls (MU110416C00010000, $1.35, up $0.05)

Entry Price:  $0.75 (1/21/11)
Exit Target: $1.50 (closed half @ $1.00 on 1/28/11)
Return: 57%
Stop Target: $1.00 (HARD STOP) 

Action:  Shares should break $11 today.  We have placed a stop of $1 on the other half to lock in profits and will move it up as shares move higher.  Continue to hold.

JPMorgan Chase (JPM, $45.45, down $0.48)

February 46 calls (JPM110219C00046000, $0.65, down $0.20)

Entry Price:  $0.88 (1/12/11)
Exit Target: $1.75
Return: -26%
Stop Target: None

Action:  Continue to hold for now. 
 

Brocade Communications (BRCD, $5.83, up $0.14)

July 6 calls (BRCD110716C00006000, $0.65, up $0.10)

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.  Continue to hold.  


Electronic Arts (ERTS, $18.09, up $2.47)

March 20 calls (ERTS110319C00020000, $0.24, up $0.16)

Entry Price:  $0.22 (11/24/10)
Exit Target: $0.50+
Return: 9%
Stop Target: None

Action:  Continue to hold.  
 

Other 2011 Portfolio OPEN positions (4):  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)
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.


Akamai Technologies (AKAM, $48.06, up $1.01)

February 55 calls (AKAM110219C00055000, $0.40, up $0.20)

March 55 calls (AKAM110319C00055000, $0.85, down $0.10)

Thoughts:  We are seriously looking at the March options as a possible trade.  Akamai is a strong takeover target and there are numerous companies that would love to have this gem.  They announce earnings next week (February 9) and we think they are going to crush Wall Street’s estimates.


Skyworks Solutions (SWKS, $32.92, up $0.20)

March 34 calls (SWKS110319C00034000, $1.30, up $0.10)

May 40 calls (SWKS110521C00040000, $0.70, up $0.05)

Thoughts:  We like both of these call options as shares look poised to break their 52-week high of $33.22.  We are leaning more towards the May options.


Pan American Silver (PAAS, $33.96, down $0.62)

March 37 calls (PAAS110319C00037000, $1.00, down $0.20)

Thoughts:  We like these calls a lot.  Gold and silver had been in a downtrend since mid-January but have held their 200-day moving averages (MA).  More importantly, PAAS is in the midst of breaking through its 100-day MA and we think shares could make a run back to $40.

Molycorp (MCP, $53.25, up $4.65)

February 50 calls (MCP110219C00050000, $4.50, up $2.65)

March 55 calls (MCP110319C00055000, $3.80, up $1.80) 

Thoughts:  We saw the break over $50 yesterday and we knew it would be bullish.  We were trying to get the February 50’s for a buck when they were at $1.25 and it cost us a great trade.  For those of you who have been reading our bullish comments and took the trade, close half and let the rest ride but set a stop of $3 on the other half.

Imax (IMAX, $26.80, down $0.57)

March 28 calls (IMAX110319C00028000, $1.40, down $0.20)

June 30 calls (IMAX110618C00030000, $1.50, down $0.30)

Thoughts:  The June calls are safer and buy more time for a run back over $30 but Imax could get more exposure on the NYSE.

Green Mountain Coffee Roasters (GMCR, $32.96, down $0.29)

March 36 calls (GMCR110319C00036000, $1.30, down $0.05)

March 30 puts (GMCR110319P00030000, $1.40, up $0.25)

Thoughts:  Shares surged 15% in after-hours and we had a good feeling Green Mountain would be active after they announced earnings.