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.

1:15pm (EST)

Seattle Genetics (SGEN, $21.17, down $0.17)

August 22.50 calls (SGEN110820C00022500, $1.20, down $0.05)

Entry Price:  $1.10 (6/28/11)

Exit Target: $2.50

Return:  9%

Stop Target:  $0.55


September 20 calls (SGEN110917C00020000, $3.10, down $0.10)

Entry Price:  $1.50 (5/9/11)

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

Return:  77%

Stop Target:  $2.20 (HARD STOP on other half)

Action:  Shares have traded slightly lower for much of the day following yesterday’s pop and our we have a price target of $25-$30 for Seattle G.

LinkedIn (LNKD, $89.18, up $3.62)

July 55 puts (LNKD110716P00055000, $0.30, down $0.15)

Entry Price:  $1.20 (6/24/11)

Exit Target: $2.40

Return:  -75%

Stop Target:  None

Action:  It looks bleak and we may have got trapped with this trade but LinkedIn will be volatile over the next 3 weeks.  Continue to hold.

Symantec (SYMC, $19.56, up $0.06)

October 20 calls (SYMC111022C00020000, $1.10, flat)

Entry Price:  $0.93 (6/21/11)

Exit Target: $2.00

Return:  18%

Stop Target:  None

Action:  Symantec traded to a high of $19.62 yesterday and we were looking for a close above $19.65 today.  A break above this level should clear the way for a run at the 52-week high of $20.50.  These options have 114 days before they expire and we are expecting shares to run up to $22+ by mid-October which gets these calls to at least $2.

Wells Fargo (WFC, $27.89, up $0.40)

July 26 puts (WFC110716P00026000, $0.20, down $0.10)

Entry Price:  $0.50 (6/20/11)

Exit Target: $1.00+

Return:  -60%

Stop Target:  None

Action:  Shares have traded to a high $28.05 and resistance at $28 is still holding.  We only need shares to drop to $25 to make a double so we still like the risk/ reward as the options were only 50 cents.

Rambus (RMBS, $14.49, up $0.16)

August 17 calls (RMBS110820C00017000, $0.40, flat)

Entry Price:  $0.60 (6/20/11)

Exit Target: $1.20+

Return:  -33%

Stop Target:  None

Action:  If Rambus can win it current litigation case then there is a big gap to fill on positive news.  A break above $15 could get us off to the races.


Krispy Kreme Doughnuts (KKD, $9.85, up $0.12)

July 10 calls (KKD110716C00010000, $0.45, up $0.05)

Entry Price:  $0.20 (6/14/11)

Exit Target: $0.40+

Return:  125%

Stop Target:  None

Action:  Krispy Kreme has traded to a high of $10.08 today.  Continue to hold.


RealD (RLD, $23.10, up $0.06)

July 20 puts (RLD110716P00020000, $0.60, flat)

Entry Price:  $0.45 (6/9/11)

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

Return:  147%

Stop Target:  30 cents

Action:  The 3D wave has a lot riding on it with the release of Transformers last night.  If the numbers suck, RealD could continue its recent slide.  Specifically, we are looking for a close below $22.50.

We have already sold half the position at $1.60 and our entry price was 45 cents.  The gain on the closed half was 256% so even if these puts expire worthless the trade will make 78%.  However, a test back to $18 gets these options at $2.


Other 2011 Portfolio OPEN positions (7):  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)

Darling International July 20 calls (from May 2011)
Vivus (September 10 calls (from May 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.


iShares Russell 2000 (IWM, $82.22, up $0.41)

August 85 calls (IWM110820C00085000, $1.10, flat)

Thoughts:  If there is a breakout, we like the small-caps and think they could outperform Tech.  Stay locked and loaded for this one.


Freeport-McMoRan (FCX, $52.17, up $1.73)

August 55 calls (FCX110820C00055000, $1.75, up $0.55)

Thoughts:  We said last week that Freeport could trade back above $50 so $52 should come quickly.  If this level is cleared, shares could challenge double-nickels ($55) over the near-term.


Garmin (GRMN, $32.08, up $0.17)

August 30 puts (GRMN110820P00030000, $0.90, down $0.05)

Thoughts:  We have been saying Garmin is due for a crash and after holding the $34 level forever, shares seem to be cracking.  The company will report earnings in early August and this could be the quarter that makes Wall Street push the panic button.  We have been saying this company could be a non-factor down the road as GPS becomes more popular on smart-phones and Tom-Tom recently lowered their guidance.


Apollo Group (APOL, $43.24, up $0.19)

July 40 puts (APOL110716P00038000, $0.75, down $0.05)

Thoughts:  Apollo Group will announce earnings after the bell on Thursday.  If Apollo misses Wall Street’s estimates then shares could finally make a trip below $40.  These options are “expensive” based on the premium which is holding us back from making this an official recommendation.


Polycom (PLCM, $63.89, down $0.15)

July 67.50 calls (PLCM110716C00067500, $1.00, down $0.10)

Thoughts:  After the 2-for-1 stock split announcement, shares surged and then pulled back like we expected.  There should be continued strength as the split takes effect this week.


PowerShares QQQ Trust (QQQ, $56.31, up $0.24)

July 55 calls (QQQ110701C00055000, $1.50, up $0.20)

Thoughts:  Watch for now.


Potash (POT, $56.92, up $1.97)

July 55 calls (POT110716C00055000, $2.65, up $1.25)

Thoughts:  These options opened at 72 cents on Monday and our chart work was spot on.  The WEEKLY July 55 calls (POT110701C00055000, $2.00, up $1.50) opened at 21 cents on Monday.


Williams-Sonoma (WSM, $36.35, up $0.52)

August 39 calls (WSM110716C00039000, $0.85, up $0.10)

Thoughts:  Continue to watch.


SanDisk (SNDK, $40.60, down $0.17)

July 39 puts (SNDK110716P00039000, $0.65, down $0.05)

August 35 puts (SNDK110820P00035000, $0.75, down $0.05)

Thoughts:  We could look at a strangle position because there is water-cooler talk that Apple might make a bid for SanDisk.