June 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.

 12:35pm (EST)

NEW TRADES!!!

Wells Fargo (WFC, $26.97, down $0.36)

Buy to OPEN July 26 puts (WFC110716P00026000, $0.50, up $0.05)

Action:  Use limit orders up to 55 cents but do not pay more than 60 cents to establish positions.

 

Rambus (RMBS, $14.61, up $0.66)

Buy to OPEN August 17 calls (RMBS110820C00017000, $0.60, up $0.05)

Action:  Rambus could be setting up for a HUGE move.  More details in the coming days.  Use limit orders at 55-60 cents but do not pay more than 65-70 cents for these options.

 

CURRENT TRADES

 

LinkedIn (LNKD, $60.40, down $5.13)

July 55 puts (LNKD110716P00055000, $3.50, up $1.35)

Entry Price:  $1.25 (6/16/11)

Exit Target: $2.50+  

Return:  180%

Stop Target:  $1.25, raise to $1.75

Action:  Close HALF of the trade at current levels to lock in profits.  We would push it for another day put we did that on Friday so let’s step off the gas and sell half.  Continue to hold the other half and raise the stop to $1.75.   


Krispy Kreme Doughnuts (KKD, $8.80, down $0.23)

July 10 calls (KKD110716C00010000, $0.25, down $0.10)

Entry Price:  $0.20 (6/14/11)

Exit Target: $0.40+  

Return:  25%

Stop Target:  None

Action:  Continue to hold.


RealD (RLD, $24.20, down $0.57)

July 20 puts (RLD110716P00020000, $0.60, up $0.10) 

Entry Price:  $0.45 (6/9/11)

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

Return:  144%

Stop Target:  75 cents

Action:  Green Lantern tanked at the box-office and only made $50 million.  The film cost $300 million.  The 3-D craze is slowing like we said it would.  We are looking for a drop below $20 for RealD by mid-July.


Research In Motion (RIMM, $26.52, down $1.23)  

July 32.50 puts (RIMM110716P00032500, $5.85, up $0.80)

Entry Price:  $0.75 (6/6/11)    

Exit Target: $1.50 (closed half at $1.35 on 6/15/2011)

Return:  380%

Stop Target:  $3.00, raise to $4.50

Action:   We will continue to raise the stop as RIMM drops.  We closed half the position at $1.35 last week and the current price of $5.85 gives us an average cost of $3.60.  The puts have traded as high as $6.30 today.


Zagg (ZAGG, $11.90, down $0.40)

July 12 calls (ZAGG110716C00012000, $0.70, down $0.20)

Entry Price:  $0.35 (6/1/11)

Exit Target: $0.70 (closed half at $1.00 on 6/15/2011, half @ $0.80 on 6/20/2011)

Return:  157%

Stop Target:  40 cents (on other half) 

Action:  We closed half at $1 and half at 80 cents for an average price of 90 cents.  The entry price was 35 cents which gets us the 157% return.  We will continue to watch ZAGG and if we see another opportunity to trade it, we will let you know. 


Darling International (DAR, $16.99, down $0.34)    

July 20 calls (DAR110716C00020000, $0.20, flat)

Entry Price:  $0.50 (5/27/11)
Exit Target: $1.00
Return:  -60%
Stop Target: None

Action:  The ask is still holding but we may have to move this trade to the hold section.    


Vivus (VVUS, $7.67, flat)

September 10 calls (VVUS110917C00010000, $0.30, flat)

Entry Price:  $0.65 (5/20/11)
Exit Target: $1.30
Return:  -54%
Stop Target:  None

Action:  Vivus 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.  Qnexa has also completed Phase 2 clinical trials and is hoping to get approval to treat diabetes and obstructive sleep apnea as well.   


Seattle Genetics (SGEN, $20.18, up $0.68)

September 20 calls (SGEN110917C00020000, $2.50, up $0.20)

Entry Price:  $1.50 (5/9/11)

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

Return:  57%

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

Action:  We got our breakout over $20.     


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.  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.


eBay July 40 calls (from February 2011)

RF MicroDevices August 10 calls (from February 2011)

Dendreon August 50 calls (from April 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.

We will update this section in the morning.

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

11:10am (EST)

Zagg (ZAGG, $12.14, down $0.16)

July 12 calls (ZAGG110716C00012000, $0.80, down $0.10)

Entry Price:  $0.35 (6/1/11)

Exit Target: $0.70 (closed half at $1.00 on 6/15/2011)

Return:  157%

Stop Target:  40 cents (on other half) 

Action:  Let’s take our profits and move on to the next trade.  We were hoping for a run to $13 today but it doesn’t appear to be in the cards. 

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

8:35am (EST)

LinkedIn (LNKD, $65.53, down $2.74)

July 55 puts (LNKD110716P00055000, $2.15, up $0.30)

 Entry Price:  $1.25 (6/16/11)

Exit Target: $2.50+  

Return:  72%

Stop Target:  60 cents, raise to $1.25

Action:  Shares stayed in a downtrend following Friday’s midday update and finished down 4%.  We said we were going to push the trade instead of closing half after being up 50% in 1-day because we just have this feeling the stock will trade double nickels ($55) over the short-term.  LinkedIn has only trading for a month but it’s pre-IPO price was $45.  Continue to hold but we may close half if we hit a triple-digit profit this week. 


Krispy Kreme Doughnuts (KKD, $9.03, up $0.24) 

July 10 calls (KKD110716C00010000, $0.35, up $0.05)

 Entry Price:  $0.20 (6/14/11)

 Exit Target: $0.40+  

 Return:  75%

 Stop Target:  None

Action:  We thought about closing half of this trade when the options reached 45 cents on Friday but they are still “cheap”.  Shares reached a fresh 52-week high of $9.47 but we are holding out for a run past $10 (red line, green circles).  Support is strong at $8 (black line, green circles). Continue to hold.

RealD (RLD, $24.76, up $0.54)

July 20 puts (RLD110716P00020000, $0.50, down $0.10) 

Entry Price:  $0.45 (6/9/11)

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

Return:  133%

Stop Target:  75 cents

Action:  RealD is right at resistance and will likely make a move based on this weekend’s box office numbers.  We still feel like shares will be below $20 by mid-July (black line) if current resistance holds (red line, green circles).  This would get the options to $2 on the other half.  

Research In Motion (RIMM, $$27.75, down $7.58)  

July 32.50 puts (RIMM110716P00032500, $5.05, up $3.60)

Entry Price:  $0.75 (6/6/11)    

Exit Target: $1.50 (closed half at $1.35 on 6/15/2011)

Return:  327%

Stop Target:  $3.00

Action:   We had to get RIMM’s all-time chart out to see where support comes in following last week’s break below $30.  Shares could be headed to the lower $20’s over the next few months but a continued selloff could come quicker if the downside momentum continues.

Zagg (ZAGG, $12.30, down $0.04)

 July 12 calls (ZAGG110716C00012000, $0.90, down $0.05)

 Entry Price:  $0.35 (6/1/11)

Exit Target: $0.70 (closed half at $1.00 on 6/15/2011)

Return:  171%

Stop Target:  40 cents (on other half) 

 Action:  Continue to hold as we have a near-term target of $14-$15 for Zagg.  However, if shares fall below $12, we will probably close the rest of the trade. 

Darling International (DAR, $17.31, up $0.24)    

July 20 calls (DAR110716C00020000, $0.20, flat)

Entry Price:  $0.50 (5/27/11)
Exit Target: $1.00
Return:  -60%
Stop Target: None

Action:  These were cheap options but we didn’t like last week’s price action.  If $17 (red line) doesn’t hold, this trade will suffer.

Vivus (VVUS, $7.67, down $0.17)

September 10 calls (VVUS110917C00010000, $0.30, flat)

Entry Price:  $0.65 (5/20/11)
Exit Target: $1.30
Return:  -54%
Stop Target:  None

Action:  Vivus traded to a high of $8.06 on Friday but fell 2% for the day.  Shares continue to hold support (black line, green circles) which was prior resistance.  However, if broken, Vivus could fall into a trading range of $6-$8. 

Vivus 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.  Qnexa has also completed Phase 2 clinical trials and is hoping to get approval to treat diabetes and obstructive sleep apnea as well.  

 

 Seattle Genetics (SGEN, $19.50, down $0.05)

September 20 calls (SGEN110917C00020000, $2.30, down $0.05)

Entry Price:  $1.50 (5/9/11)

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

Return:  50%

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

Action:  Shares have been stock in a mini-trading range since testing $20 and support is strong at $19 (black line, green circles).   



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.  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.

 eBay July 40 calls (from February 2011)

 RF MicroDevices August 10 calls (from February 2011)

 Dendreon August 50 calls (from April 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.

OpenTable (OPEN, $74.41, down $3.31)

July 90 calls (OPEN110716C00090000, $0.45, down $0.45)

July 67.50 puts (OPEN110716P00067500, $1.70, up $0.70)

Thoughts:  This position would have cost $1.90 if we had entered at last Thursday’s prices.  Shares are right near the middle with the 52-week high at $118 and the low at $40.  As you can see, there is a bullish wedge that has formed (red lines) at support (black line) so there is chance for a huge rebound from current levels.  However, a break below $72 could lead to further selling pressure.

SanDisk (SNDK, $40.94, down $1.30)

July 39 puts (SNDK110716P00039000, $1.00, up $0.20)

Thoughts:  Shares are breaking down.  A drop below $40 could lead to a quick trip to $37. 

VeriFone Systems (PAY, $39.95, up $0.17)

July 45 calls (PAY110716C00045000, $0.50, flat)

July 38 puts (PAY110716P00038000, $1.50, down $0.25)

Thoughts:  As much as we like this stock, shares could be headed to $35.

 

Symantec (SYMC, $18.55, down $0.07)

October 20 calls (SYMC111022C00020000, $0.80, flat) 

Thoughts:  Shares were slightly higher for the week but there is still risk down to $18 (black line and red circles).  A break below $18 could lead to $17.50 (red line and green circles) which is where would expect a trading range to form before the next leg up.  We like this stock for the long-term and for new subscribers, we just covered this company a few weeks ago if you want to read our thoughts on why we expect a run past $20 is coming. 

 

S&P 500 Spiders (SPY, $127.05, up $0.38)

 July 125 put (SPY110716P00125000, $2.00, down $0.10)

 July 130 call (SPY110716C00130000, $1.20, flat) 

 Thoughts:  Waiting for a breakout or breakdown.


Wells Fargo (WFC, $27.33, up $0.53)

July 26 puts (WFC110716P00026000, $0.50, down $0.20)

Thoughts:  We have waited patiently for Wells to make a run to $28 and we are almost there.  We like the puts at these levels so stay close to you email inbox.  We might pull the trigger today.  We feel shares will test to $23-$22 by mid-July but let’s make sure the rebound fades, first.

 

Rick Rouse
Chief Options Strategist 

Rick@MomentumOptionsTrading.com

“What Are You Doing TODAY to become a millionaire TOMORROW?”


Member Area:
https://MomentumOptionsTrading.com/amember/login.php

 

Momentum Options Trading, LLC

10908 Courthouse Rd., Suite 102-231

Fredericksburg, VA 22408

(888) 898–0837

 

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