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.


1:45pm (EST)

Global Payments (GPN, $51.29, up $0.08)

August 55 calls (GPN110820C00055000, $0.45, down $0.05)

Entry Price:  $0.40 (7/13/11)

Exit Target: $0.80

Return:  13%

Stop Target:  None 

Action:  Global Payments reports earnings next Thursday and is usually a strong mover.  We are expecting the company to beat expectations and hit new highs of $55+.    


Patriot Coal (PCX, $23.26, up $1.42) 

August 24 calls (PCX110820C00024000, $1.15, up $0.40)

Entry Price:  $0.90 (7/13/11)

Exit Target: $1.80

Return:  28%

Stop Target:  None 

Action:  Support is strong at $22.  Shares face resistance at $24 which if reached in a few weeks should get the trade to a 50%-75% return.  A run to $25-$26 gets us a double.  


Qualcomm (QCOM, $54.97, up $0.05)

October 65 calls (QCOM111022C00065000, $0.40, flat)

Entry Price:  $0.85 (7/11/11)

Exit Target: $1.70

Return:  -53%

Stop Target:  None 

Action:  We are expecting a blowout quarter from Qualcomm which reports numbers next Wednesday.  The 52-week high is $59.84 which is why we got positioned early and a break above $60 will represent blue-sky territory. 

 

TiVo (TIVO, $10.05, down $0.08)

August 11 calls (TIVO110820C00011000, $0.35, flat)

Entry Price:  $0.55 (7/1/11)

Exit Target: $1.10

Return:  -36%

Stop Target:  None 

Action:  TiVo is currently in a clearly defined trading range and will either breakout or breakdown once $10 or $11 is violated.  TiVo could run to $18 on short covering, buyout news, or a partnership.  Our breakeven point is $11.55 and we have a little over a month to wait for a surge past $11. 


iShares Russell 2000 (IWM, $82.64, up $0.38)

August 86 calls (IWM110820C00086000, $0.80, flat)

Entry Price:  $1.10 (7/1/11)

Exit Target: $2.20

Return:  -27%

Stop Target:  $0.55 

Action:  The 52-week high is $86.81 and we are expecting a run to $89-$90 for the small-cap index over the next few weeks.


Freeport-McMoRan (FCX, $55.05, up $0.80) 

August 57 calls (FCX110820C00057000, $1.70, up $0.25)

Entry Price:  $1.18 (7/1/11)

Exit Target: $2.40

Return:  44%

Stop Target:  $0.60

Action:  The company reports earnings on July 21 which should be the catalyst to take the stock to new highs or back under $50.  We think Freeport can trade to $60+ if the market holds up and they come in with better-than-expected earnings AND guidance.


Seattle Genetics (SGEN, $18.77, down $1.56)

August 22.50 calls (SGEN110820C00022500, $0.35, down $0.60)

Entry Price:  $1.10 (6/28/11)

Exit Target: $2.50

Return:  -68%

Stop Target:  $0.55 


September 20 calls (SGEN110917C00020000, $1.30, down $1.10) 

Entry Price:  $1.50 (5/9/11)

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

Return:  17%

Stop Target:  $2.20   

Action:  We had the same reaction to Dendreon a few years ago before shares exploded higher.  We are extremely disappointed with today’s action but we are fairly confident the stock will rebound.


Symantec (SYMC, $19.01, up $0.04)

October 20 calls (SYMC111022C00020000, $0.80, flat) 

Entry Price:  $0.93 (6/21/11)

Exit Target: $2.00  

Return:  -14%

Stop Target:  None

Action:  There is risk down to $18.50 but we like this trade for the long-term which is why we went with the October call options.

The company is set to report earnings on July 27.  The 52-week high is $20.50 and we are expecting shares to run up to $22+ by mid-October.  However, a breech below $19 would probably have a negative impact on the trade over the short-term.   


Rambus (RMBS, $14.14, up $0.11)

August 17 calls (RMBS110820C00017000, $0.25, flat)

Entry Price:  $0.60 (6/20/11)

Exit Target: $1.20+  

Return:  -58%

Stop Target:  None

Action:  If Rambus can win its current litigation case then expect a breakout and a run into the $20’s.  This is a day-to-day trial that could take a month or more so this trade carries risk and is already down over 50%.  However, this trade will make 5x the entry price if the stock trades $20 which is possible on a settlement – which could happen any day.

Rambus will report earnings next Thursday, July 21.  Resistance is at $15 and there is a big gap to fill from $15 up to $19 which was prior support. 


Rediff.com India (REDF, $13.15, up $0.55)

October 15 calls (REDF111022C00015000, $1.40, up $0.20)

Entry Price:  $1.25 (6/01/11)

Exit Target: $2.50

Return:  12%

Stop Target:  None

Action:  Shares have traded to a high of $13.35 and have cleared $13.  The October options have 3 months before they expire and Rediff.com remains a likely takeover target.      


MGM Resorts International (MGM, $14.83, up $0.11)

September 17 calls (MGM110917C00017000, $0.45, flat)

Entry Price:  $0.70 (5/13/11)

Exit Target: $1.40

Return:  -36%

Stop Target:  None

Action:  Shares traded to a high of $15.07 yesterday and we have 63 days for this story to play out.


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) –  expires today

RF MicroDevices August 10 calls (from February 2011)  

Dendreon August 50 calls (from April 2011)   

Darling International July 20 calls (from May 2011) – expires today 

Vivus September 10 calls (from May 2011)

LinkedIn July 55 puts (from June 2011) – expires today   

Wells Fargo July 26 puts (from June 2011) – expires today   


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 Monday morning with some fresh ideas.