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.

12:20pm (EST)

Patriot Coal (PCX, $28.25, up $2.08)

March 30 calls (PCX110319C00030000, $1.65, up $0.55)

Entry Price:  $1.25 (1/31/11)
Exit Target: $2.50
Return: 32%
Stop Target: 60 cents

Action:  We were hoping for a bigger pop in our options but they were a little pricey yesterday.  However, we still felt they were reasonable enough to make a double and the stock is at 52-week highs.  We said to expect a run to $30 so let’s hold the position open for another day or two.  We would like to close half into strength by the end of the week.


CurrencyShares  Euro Trust (FXE, $137.39, up $1.01)

March 134 puts (FXE110319P00134000, $1.25, down $0.30)

Entry Price:  $1.60 (1/28/11)
Exit Target: $3.20
Return: -22%
Stop Target: 80 cents

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

 

Jabil Circuit (JBL, $20.84, up $0.63)

March 21 calls (JBL110319C00021000, $1.05, up $0.15)

Entry Price:  $0.70 (1/26/11)
Exit Target: $1.40
Return: 50%
Stop Target: None

Action:  We are expecting shares to make a quick run to $22-$23 over the next few weeks and today’s 3% surge helps.

PowerShares QQQ (QQQQ, $56.97, up $0.97)

March 58 calls (QQQQ110319C00058000, $0.85, up $0.25)

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.   
 

Spider S&P 500 (SPY, $130.47, up $1.79)

February 131 calls (SPY110219C00131000, $1.35, up $0.60)

Entry Price:  $0.95 (1/21/11)
Exit Target: $1.90
Return: 42%
Stop Target: None

Action:  Close HALF at current levels.  It’s not that we don’t expect shares to go higher but our plan was to be out of this trade by today.  Let’s not get greedy and we try not to break our trading rules.  This one is always follow the parameters of your trade just like you drew it up in the sand.  


Micron Technology (MU, $10.82, up $0.28)

April 10 calls (MU110416C00010000, $1.40, up $0.20)

Entry Price:  $0.75 (1/21/11)
Exit Target: $1.50 (closed half @ $1.00 on 1/28/11)
Return: 60%
Stop Target: None

Action:  Repeat, shares of Micron look poised to break their 52-week high of $11.40. 

 
JPMorgan Chase (JPM, $45.78, up $0.84)

February 46 calls (JPM110219C00046000, $0.80, up $0.30)

Entry Price:  $0.88 (1/12/11)
Exit Target: $1.75
Return: -9%
Stop Target: None

Action:  JPMorgan is teasing us again.  Since these are February options we are playing with fire as they expire in under 3 weeks.  If we can turn a profit on this one, we will be looking to get out quickly.  We haven’t and still don’t trust the Financial stocks but we went with one of the better names in the group.  Continue to hold.


Brocade Communications (BRCD, $5.62, down $0.02)

July 6 calls (BRCD110716C00006000, $0.55, down $0.05)

Entry Price:  $0.67 (1/4/11)
Exit Target: $1.35
Return: -18%
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 and these options have 164 days before they expire.  Continue to hold.  
 

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.


Akamai Technologies (AKAM, $49.19, up $0.87)

February 55 calls (AKAM110219C00055000, $0.60, up $0.06)

March 55 calls (AKAM110319C00055000, $1.15, up $0.15)

Thoughts:  We are hearing shares of Akamai are a strong takeover target and there are numerous companies that would love to have this gem.  The company announces earnings next week (February 9) and we think they are going to crush Wall Street’s estimates.


Skyworks Solutions (SWKS, $32.91, up $1.14)

March 34 calls (SWKS110319C00034000, $1.20, up $0.30)

Thoughts:  We have a feeling Skyworks is going to explode higher this year.  We would love to be in these calls and we are seriously looking at the August 45’s which are at 70 cents.


Pan American Silver (PAAS, $33.72, up $0.91)

March 36 calls (PAAS110319C00036000, $1.30, up $0.25)

Thoughts:  We think shares can run back towards $40 over the next 6 weeks.


Orexigen Therapeutics (OREX, $2.50, down $6.59)

February 5 puts (OREX110219P00005000, $2.50, up $2.05)

Thoughts:  Close the trade if you are in and go celebrate!

Molycorp (MCP, $48.63, up $1.82)

February 50 calls (MCP110219C00050000, $2.20, up $0.70)

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.

Imax (IMAX, $26.67, up $1.08)

March 28 calls (IMAX110319C00028000, $1.40, up $0.35)

June 30 calls (IMAX110618C00030000, $1.50, up $0.20)

Thoughts:  We may have missed some great entry points but we will still watch from the sidelines.


Green Mountain Coffee Roasters (GMCR, $33.88, up $0.30)

March 36 calls (GMCR110319C00036000, $1.50, up $0.05)

March 30 puts (GMCR110319P00030000, $1.00, down $0.10)

Thoughts:  We like this strangle trade a lot but watch for now. 

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

9:05am (EST)

Patriot Coal (PCX, $26.17, up $0.71)

March 30 calls (PCX110319C00030000, $1.10, up $0.20)

Entry Price:  $1.25 (1/31/11)
Exit Target: $2.50
Return: -8%
Stop Target: 60 cents

Action:  Patriot reported a mixed quarter but shares are higher in pre-market action.  Shares are up nearly 60 cents so we may close half of the position into strength.  The company’s conference call could be good or bad so we will be watching this one closely in the first hour of trading.         


CurrencyShares  Euro Trust (FXE, $136.38, up $0.81)

March 134 puts (FXE110319P00134000, $1.55, down $0.35)

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

Action:  Continue to hold.

 

Jabil Circuit (JBL, $20.21, up $0.40)

March 21 calls (JBL110319C00021000, $0.80, up $0.10)

Entry Price:  $0.70 (1/26/11)
Exit Target: $1.40
Return: 14%
Stop Target: None

Action:  Jabil looked strong on Monday and the close above $20 was good to see.  We are expecting shares to make a quick run to $22-$23 over the next few weeks.

 
PowerShares QQQ (QQQQ, $56.00, up $0.27)

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

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.  Futures are showing a nice open this morning so we should get a decent pop in these calls.  However, it is important the Q’s hold $55.50. 


Spider S&P 500 (SPY, $128.68, up $0.96)

February 131 calls (SPY110219C00131000, $0.75, up $0.15)

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

Action:  We are looking for the S&P 500 to break and hold 1,300 this week or next.  Continue to hold.  


Micron Technology (MU, $10.54, up $0.17)

April 10 calls (MU110416C00010000, $1.20, up $0.10)

Entry Price:  $0.75 (1/21/11)
Exit Target: $1.50 (closed half @ $1.00 on 1/28/11)
Return: 47%
Stop Target: None

Action:  Shares of Micron are look poised to break their 52-week high of $11.40.  The Feb 11 calls are at 25 cents and traded nearly 10,000 contracts yesterday.  The March 11’s were up 7 cents to 52 cents on volume of over 1,000 contracts.  The stock is up to $10.70 in pre-market action.  Continue to hold the other half.

 

JPMorgan Chase (JPM, $44.94, up $0.40)

February 46 calls (JPM110219C00046000, $0.50, up $0.05)

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

Action:  Shares are above $45 in early trading but we need them to challenge the 52-week high of $48.20 over the next 3 weeks.  Continue to hold
 

Brocade Communications (BRCD, $5.64, up $0.04)

July 6 calls (BRCD110716C00006000, $0.60, flat)

Entry Price:  $0.67 (1/4/11)
Exit Target: $1.35
Return: -10%
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 and these options have 164 days before they expire.  Continue to hold.  
 

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.


Akamai Technologies (AKAM, $48.32, up $0.57)

February 55 calls (AKAM110219C00055000, $0.54, up $0.08)

March 52.50 calls (AKAM110319C00052500, $0.93, up $0.04)

Thoughts:  We are hearing shares of Akamai are a strong takeover target and there are numerous companies that would love to have this gem.  The company announces earnings next week (February 9) and we think they are going to crush Wall Street’s estimates.


Skyworks Solutions (SWKS, $31.77, up $0.44)

March 34 calls (SWKS110319C00034000, $0.90, up $0.05)

Thoughts:  We have a feeling Skyworks is going to explode higher this year.  We would love to be in these calls and as we close a trade or two we may add some longer-term options on Skyworks, like August calls, because we are expecting shares to double in 2011. 


Pan American Silver (PAAS, $32.81, down $0.41)

March 36 calls (PAAS110319C00036000, $1.05, up $0.10)

Thoughts:  We think shares can run back towards $40 over the next 6 weeks.


Orexigen Therapeutics (OREX, $9.09, up $0.77)

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

Thoughts:  If you are in this trade, congratulations!

Shares jumped 9% yesterday but it was a total fake-out for those who were betting on the company’s diet drug, Contrave, getting approval from the FDA.  Notice how the put options were flat for the day although shares jumped nearly 10%? 

These puts should EXPLODE today as the FDA did not give the drug approval this morning.  Shares are down $6.59 to $2.50 which should get these options to at least $2.50.

 
Molycorp (MCP, $46.81, up $0.92)

February 50 calls (MCP110219C00050000, $1.50, flat)

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.

Imax (IMAX, $25.59, up $0.02)

March 28 calls (IMAX110319C00028000, $1.05, flat)

June 30 calls (IMAX110618C00030000, $1.30, flat)

Thoughts:  We think Imax is reaching a bottom and is holding current support well.  There is still a chance for a dip down to $22 which is where we would become super aggressive so we are waiting to make sure the $24-$25 level holds.

Green Mountain Coffee Roasters (GMCR, $33.58, down $0.81)

March 36 calls (GMCR110319C00036000, $1.10, down $0.35)

March 30 puts (GMCR110319P00030000, $1.10, up $0.05)

Thoughts:  We like this strangle trade a lot but watch for now.