9:00am (EST)

RealD (RLD, $20.91, up $0.01)

July 20 puts (RLD110716P00020000, $1.20, down $0.10)

Entry Price:  $0.45 (6/9/11)

Exit Target: $0.90+ (closed half at $1.60 on 6/10/2011)

Return:  211%

Stop Target:  75 cents

Action:  Shares traded to a high of $22.40 yesterday which was prior support and will act as short-term resistance.  We have a $18 price target on RealD by mid-July which gets the other half of these option to $2.


Research In Motion (RIMM, $36.20, down $0.36)

July 32.50 puts (RIMM110716P00032500, $1.20, up $0.10)

Entry Price:  $0.75 (6/6/11)

Exit Target: $1.50

Return:  60%

Stop Target:  None

Action:  RIMM reports earnings on Thursday and got two downgrades yesterday.  Shares also hit a fresh 52-week low of $35.90 and we are looking for a drop below $35 which clears the way for a test to the low $30’s. 

There is a chance for a surprise with so much negative sentiment (see Best Buy) so we will have to watch these options all week.  However, we don’t think RIMM is going to have a rosy quarter and even if they do we doubt their outlook will wow Wall Street.


Zagg (ZAGG, $12.28, up $0.65)

July 12 calls (ZAGG110716C00012000, $0.90, up $0.25)

Entry Price:  $0.35 (6/1/11)

Exit Target: $0.70

Return:  157%

Stop Target:  None

Action:  Zagg traded to a high of $12.50 on Monday as the options kissed a buck.  We have a near-term price target of $14-$15 which gets these calls to $2-$3 but we may close half into strength if we get another big pop today. 


Darling International (DAR, $18.08, down $0.12)

July 20 calls (DAR110716C00020000, $0.25, flat)

Entry Price:  $0.50 (5/27/11)
Exit Target: $1.00
Return:  -50%
Stop Target: None

Action:  Shares reached a high of $18.72 but failed to hold their gains yesterday.  The 52-week high for Darling is $19.62 and we are expecting a run past $20 over the next month.   


Vivus (VVUS, $7.78, up $0.02)

September 10 calls (VVUS110917C00010000, $0.35, flat)

Entry Price:  $0.65 (5/20/11)
Exit Target: $1.30
Return:  -46%
Stop Target:  None

Action:  The company may have a winner with Qnexa on two fronts which is what most analysts are forgetting.  The drug has completed Phase 3 trials for obesity and is still awaiting approval from the FDA.  However, Qnexa has also completed Phase 2 clinical trials and is hoping to get approval to treat diabetes and obstructive sleep apnea as well.  If shares trend lower, we may drop coverage until there is a push back towards $10.


Seattle Genetics (SGEN, $19.53, up $0.13)

September 20 calls (SGEN110917C00020000, $2.20, up $0.05)

Entry Price:  $1.50 (5/9/11)

Exit Target: $3.00 (closed half at $2.20 on 6/8/2011)

Return:  47%

Stop Target:  $1.60 (HARD STOP on other half)

Action:  We are waiting for a close above $20 to add to our position.  We are looking to add the September 25 calls (SGEN110917C00025000, $0.65, down $0.10) on a breakout but may add them sooner because this stock is going to $30 by the end of the year. 


Alpha Natural Resources (ANR, $43.78, down $1.91)

June 44 puts (ANR110618P00044000, $1.10, up $0.65)

Entry Price:  $0.80 (5/13/11)

Exit Target: $0.80+ (closed half at $1.50 on 6/13/2011)

Return:  63%

Stop Target:  None

Action:  We nailed this one yesterday in our chart work but didn’t expect yesterday’s 4% drop to come so soon.  We closed half of the trade at $1.50 when shares plunged below $43 to a low of $42.85.  In any event, we still have to manage the other half carefully as these options expire Friday and they could trade lower if there is a bounce in ANR this morning.


Other 2011 Portfolio OPEN positions (8):  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.  This means we would not open any new positions.  We are still keeping track of the trades and we will record the results, accordingly, when we close them or the options expire.  Click on the 2011 Portfolio link in the Members Area to view ALL open/ closed trades.


Vivus June 14 calls (from January 2011)

eBay July 40 calls (from February 2011)

RF MicroDevices August 10 calls (from February 2011)

Dendreon August 50 calls (from April 2011)

KLA-Tencor June 48 calls (from May 2011)

Starbucks June 38 calls (from May 2011)

MGM Resorts International September 17 calls (from May 2011)

Rediff.com India October 15 calls (from June 2011)


WATCH LIST SECTION

These trades are NOT recommendations.  They 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 try not to have more than 12-15 open trades at any one time which is why we created a Watch List.  We will not list entry prices because these stocks are on the verge of breaking out or they could sell-off.


Symantec (SYMC, $18.50, down $0.35)

October 20 calls (SYMC111022C00020000, $0.75, down $0.15)

Thoughts:  We would like to see shares come down to $18 for a good entry point as we feel the stock will challenge new highs by October.  The current 52-week high is $20.50.


S&P 500 Spiders (SPY, $127.70, up $0.10)

July 125 put (SPY110716P00125000, $1.85, down $0.15)

Thoughts:  All signs are pointing towards a test of 1,250 but we would like to see a test back to 1,300 before going short.


Polycom (PLCM, $57.15, down $1.31)

July 62.50 calls (PLCM110716C00062500, $1.20, down $0.40)

Thoughts:  The 2-for-1 stock-split hits this week and shares should hold $55-$56 if there is further weakness.  Usually there is some consolidation after the split but a strong uptrend could resume shortly afterwards.


Wells Fargo (WFC, $26.90, up $0.62)

July 26 puts (WFC110716P00026000, $0.60, down $0.30)

Thoughts:  Wells Fargo ran back to resistance and we may be getting a nice setup on his trade.  The chart says a test to $23 is coming.


Caterpillar (CAT, $95.44, down $1.35)

July 95 puts (CAT110716P00095000, $3.20, up $0.45)

Thoughts:  We were hoping Caterpillar would make a run back to $100 but we missed a good chance to make some easy profits.  However, if there is another run to $100, we might get a second chance.