July 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.

1:35pmT)

TiVo (TIVO, $10.71, up $0.09)

August 11 calls (TIVO110820C00011000, $0.60, flat)

Entry Price:  $0.55 (7/1/11)

Exit Target: $1.10

Return:  9%

Stop Target:  None 

Action:  TiVo has some sweet intellectual property that makes it an attractive takeover target.  The August options have 44 days before they expire and it appears traders are jumping on our bandwagon as nearly 4,000 contracts traded hands.  Although these options finished slightly lower for the day, traders are positioning for a move higher. 

We could see a quick run up to $18 on short covering, buyout news, or a partnership with Google or someone else.  TiVo seems to be turning the corner after a decade of losing money and is becoming attractive.      


iShares Russell 2000 (IWM, $84.33, up $0.29)

August 86 calls (IWM110820C00086000, $1.50, up $0.05)

Entry Price:  $1.10 (7/1/11)

Exit Target: $2.20

Return:  36%

Stop Target:  $0.55 

Action:  We like the small-caps on the next leg higher and the 52-week high for the iShares is $86.81.  A break above $85, or 850 on the Russell, should get us at least a double for this trade.


Freeport-McMoRan (FCX, $53.42, down $0.20)

July 55 calls WEEKLY (FCX110708C00055000, $0.16, down $0.08)

Entry Price:  $0.24 (7/1/11)

Exit Target: $0.50

Return:  -33%

Stop Target:  None 


August 57 calls (FCX110820C00057000, $1.22, down $0.05)

Entry Price:  $1.18 (7/1/11)

Exit Target: $2.40

Return:  -7%

Stop Target:  $0.60

Action:  We think Freeport can break through resistance at $55 and challenge $57 over the near-term.  The 52-week high is $61.35.

 

Seattle Genetics (SGEN, $20.98, up $0.10)

August 22.50 calls (SGEN110820C00022500, $1.05, flat)

Entry Price:  $1.10 (6/28/11)

Exit Target: $2.50

Return:  -5%

Stop Target:  $0.55 


September 20 calls (SGEN110917C00020000, $2.60, flat) 

Entry Price:  $1.50 (5/9/11)

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

Return:  60%

Stop Target:  $2.20   

Action:  We are looking for shares to challenge their 52-week high of $21.41 this week.  The bullish channel is giving us a $25-$30 price target by the end of summer as the company moves closer towards approval of its drugs. We should hear some preliminary news in a few weeks and a final decision by the end of August.

 

Symantec (SYMC, $19.79, up $0.03)

October 20 calls (SYMC111022C00020000, $1.10, flat) 

Entry Price:  $0.93 (6/21/11)

Exit Target: $2.00  

Return:  19%

Stop Target:  None

Action:  The 52-week high is $20.50 and the October options have 107 days before they expire.  We are expecting shares to run up to $22+ by mid-October which gets these calls to 2+.


Rambus (RMBS, $14.70, down $0.05)

August 17 calls (RMBS110820C00017000, $0.35, flat)

Entry Price:  $0.60 (6/20/11)

Exit Target: $1.20+  

Return:  -42%

Stop Target:  None

Action:  We think there is a good chance Rambus wins their current litigation battle and will be awarded some damages that could be larger than what most analysts believe.  There is a huge gap to fill from $15 up to $19 which was prior support for Rambus. 


Rediff.com India (REDF, $12.12, up $0.88)

October 15 calls (REDF111022C00015000, $1.15, up $0.35)

Entry Price:  $1.25 (6/01/11)

Exit Target: $2.50  

Return:  -8%

Stop Target:  None

Action:  Shares are up another 8% today which has got us back near even.  Continue to hold.


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.

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)

Darling International July 20 calls (from May 2011)

Vivus September 10 calls (from May 2011)

LinkedIn July 55 puts (from June 2011)

Wells Fargo July 26 puts (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.

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

9:00am (EST)

TiVo (TIVO, $10.63, down $0.20) 

August 11 calls (TIVO110820C00011000, $0.60, down $0.05)

Entry Price:  $0.55 (7/1/11)

Exit Target: $1.10

Return:  9%

Stop Target:  None 

Action:  TiVo has some sweet intellectual property that makes it an attractive takeover target.  The August options have 44 days before they expire and it appears traders are jumping on our bandwagon as nearly 4,000 contracts traded hands.  Although these options finished slightly lower for the day, traders are positioning for a move higher. 

We could see a quick run up to $18 on short covering, buyout news, or a partnership with Google or someone else.  TiVo seems to be turning the corner after a decade of losing money and is becoming attractive.      


iShares Russell 2000 (IWM, $84.04, up $0.21)

August 86 calls (IWM110820C00086000, $1.45, up $0.15)

Entry Price:  $1.10 (7/1/11)

Exit Target: $2.20

Return:  32%

Stop Target:  $0.55 

Action:  Like the Nasdaq, the Russell 2000 showed some strength yesterday and closed at 841, up 2 points.  We like the small-caps on the next leg higher and the 52-week high for the iShares is $86.81.  A break above $85, or 850 on the Russell, should get us at least a double for this trade.


Freeport-McMoRan (FCX, $53.62, up $0.12)

July 55 calls WEEKLY (FCX110708C00055000, $0.24, down $0.09)

Entry Price:  $0.24 (7/1/11)

Exit Target: $0.50

Return:  0%

Stop Target:  None 


August 57 calls (FCX110820C00057000, $1.22, down $0.05)

Entry Price:  $1.18 (7/1/11)

Exit Target: $2.40

Return:  3%

Stop Target:  $0.60

Action:  Shares traded up near $54 at the open and the July calls hit 35 cents which represented a 48% gain.  Of course, our exit target is 50 cents but if the stock can hit $56 this week these options would be worth $1.

We think Freeport can break through resistance at $55 and challenge $57 over the near-term.  The 52-week high is $61.35.

   

Seattle Genetics (SGEN, $20.88, up $0.02)

August 22.50 calls (SGEN110820C00022500, $1.05, flat)

Entry Price:  $1.10 (6/28/11)

Exit Target: $2.50

Return:  -5%

Stop Target:  $0.55 


September 20 calls (SGEN110917C00020000, $2.60, flat) 

Entry Price:  $1.50 (5/9/11)

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

Return:  60%

Stop Target:  $2.20   

Action:  We are looking for shares to challenge their 52-week high of $21.41 this week.  The bullish channel is giving us a $25-$30 price target by the end of summer as the company moves closer towards approval of its drugs. We should hear some preliminary news in a few weeks and a final decision by the end of August.

 

Symantec (SYMC, $19.76, down $0.07)

October 20 calls (SYMC111022C00020000, $1.10, down $0.05) 

Entry Price:  $0.93 (6/21/11)

Exit Target: $2.00  

Return:  19%

Stop Target:  None

Action:  The 52-week high is $20.50 and the October options have 107 days before they expire.  We are expecting shares to run up to $22+ by mid-October which gets these calls to 2+.

 

Rambus (RMBS, $14.75, down $0.14)

August 17 calls (RMBS110820C00017000, $0.35, down $0.05)

Entry Price:  $0.60 (6/20/11)

Exit Target: $1.20+  

Return:  -42%

Stop Target:  None

Action:  We think there is a good chance Rambus wins their current litigation battle and will be awarded some damages that could be larger than what most analysts believe.  There is a huge gap to fill from $15 up to $19 which was prior support for Rambus. 


Rediff.com India (REDF, $11.24, up $1.88)

October 15 calls (REDF111022C00015000, $0.75, up $0.45)

Entry Price:  $1.25 (6/01/11)

Exit Target: $2.50  

Return:  -40%

Stop Target:  None

Action:  THIS IS NOT A NEW TRADE.  We recommended these calls on 6/1 and we dropped daily coverage once shares slipped below $8 a few weeks ago.  At the time, we said shares are volatile and yesterday’s 20% pop in the stock put these options back in focus as they zoomed 150%.  This is why we used the longer-term options as we expect shares to test their 52-week high of $17.98 at some point over the next 3+ months.


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.

 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)

Darling International July 20 calls (from May 2011)

Vivus September 10 calls (from May 2011)

LinkedIn July 55 puts (from June 2011)

Wells Fargo July 26 puts (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.


Cisco Systems (CSCO, $15.67, down $0.13)

August 16 calls (CSCO110820C00016000, $0.50, down $0.05)

September 16 calls (CSCO110917C00016000, $0.60, down $0.10)

Thoughts:  Watch for now.


Patriot Coal (PCX, $22.93, up $0.23)

August 24 calls (PCX110820C00024000, $1.00, up $0.05)

Thoughts:  Shares made a strong move above prior support/ resistance which was just above $22 and the next area of resistance is at $24.  If cleared, Patriot could challenge $26. 


VeriFone Systems (PAY, $44.91, up $0.81)

August 50 calls (PAY110820C00050000, $0.95, up $0.10)

August 40 puts (PAY110840P00040000, $1.15, down $0.30)

Thoughts:  The chart shows resistance at $48 support at $40.  We think there is enough volatility to play a strangle option trade with VeriFone and we might be getting a good opportunity at current levels but let’s wait. 

 

Coinstar (CSTR, $56.48, up $1.14)

August 65 calls (CSTR110820C00065000, $0.90, up $0.10)

Thoughts:  The 52-week high for Coinstar is $67 and the close above $55 last week was bullish.     


Polycom (PLCM, $32.63, up $0.38)

August 35 calls (PLCM110716C00067500, $0.80, down $0.20)

Thoughts:  The 2-for-1 stock split hit yesterday so let’s watch these for a little bit.  Stocks normally move higher after a post-split and Polycom is a fast mover.  


PowerShares QQQ Trust (QQQ, $58.20, up $0.29)

August 60 calls (QQQ110701C00055000, $0.53, up $0.10)

Thoughts: If the Q’s run to $60+ these options should double.   


Williams-Sonoma (WSM, $36.58, up $0.19)

August 39 calls (WSM110716C00039000, $0.75, flat)

Thoughts:  Continue to watch.


SanDisk (SNDK, $43.45, up $0.65)

August 47 calls (SNDK110820P00047000, $1.05, up $0.10)

August 38 puts (SNDK110820P00038000, $0.70, down $0.15)

Thoughts:  If we do a strangle trade this could become an official recommendation as the volatility and the headline news should moves shares above or below these targets over the next 6 weeks.