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.

 12:45pm (EST)

NEW TRADE!!!

Qualcomm (QCOM, $58.14, down $1.22)

Buy to OPEN October 65 calls (QCOM111022C00065000, $0.85, down $0.15)

Action:  Use a limit order of 80-85 cents to establish positions but do not pay more than 90-95 cents to get filled.

Qualcomm looks headed to $70 but could test $55 over the short-term so the option could fall to 50 cents.  However, shares could stabilize and zoom back near $60 on good news.  The company reports earnings on July 20 and is rumored to be the chip of choice in the iPhone5. 

 

CURRENT TRADES

 

TiVo (TIVO, $10.43, down $0.35)

August 11 calls (TIVO110820C00011000, $0.40, down $0.10)

Entry Price:  $0.55 (7/1/11)

Exit Target: $1.10

Return:  -27%

Stop Target:  None 

Action:  The August options have 39 days before they expire so we have plenty of time for the trade to play out.

Shares are right near the 2-year resistance level of $11.  If TiVo can get through this area then 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, $83.55, down $1.58)

August 86 calls (IWM110820C00086000, $1.20, down $0.55)

Entry Price:  $1.10 (7/1/11)

Exit Target: $2.20

Return:  9%

Stop Target:  $0.55 

Action:  The bears are pushing support but the trend is higher over the next month.


Freeport-McMoRan (FCX, $53.27, down $1.86)

August 57 calls (FCX110820C00057000, $1.15, down $0.50)

Entry Price:  $1.18 (7/1/11)

Exit Target: $2.40

Return:  -3%

Stop Target:  $0.60

Action:  We told you Freeport normally trades in tandem with the market and we are looking at shares test support before the bullish run continues.


Seattle Genetics (SGEN, $20.62, down $0.46)

August 22.50 calls (SGEN110820C00022500, $1.00, down $0.15)

Entry Price:  $1.10 (6/28/11)

Exit Target: $2.50

Return:  -9%

Stop Target:  $0.55 


September 20 calls (SGEN110917C00020000, $2.50, down $0.30) 

Entry Price:  $1.50 (5/9/11)

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

Return:  57%

Stop Target:  $2.20   

Action:  The $20.50 level has held as short-term support and 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, $19.38, down $0.35)

October 20 calls (SYMC111022C00020000, $0.95, down $0.10) 

Entry Price:  $0.93 (6/21/11)

Exit Target: $2.00  

Return:  2%

Stop Target:  None

Action:  The 52-week high is $20.50 and we are expecting shares to run up to $22+ by mid-October. 

We also have Symantec as a covered call trade for our Weekly Wrap which was part of this morning’s commentary so pardon us for the confusion.


Rambus (RMBS, $14.21, down $0.40)

August 17 calls (RMBS110820C00017000, $0.25, down $0.05)

Entry Price:  $0.60 (6/20/11)

Exit Target: $1.20+  

Return:  -58%

Stop Target:  None

Action:  Shares kissed $15 last Thursday which is short-term resistance (red line).  There is a big gap to fill from $15 up to $19 which was prior support (green line, black circles).  If Rambus can win it current litigation case then expect a breakout and a run into the $20’s.


Rediff.com India (REDF, $11.59, down $0.43)

October 15 calls (REDF111022C00015000, $0.90, down $0.20)

Entry Price:  $1.25 (6/01/11)

Exit Target: $2.50

Return:  -28%

Stop Target:  None

Action:  The October options have 102 days before they expire and Rediff.com remains a likely takeover target for a company wanting to get a footprint in India’s online community of users.    


MGM Resorts International (MGM, $14.22, down $0.74)

September 17 calls (MGM110917C00017000, $0.40, down $0.10)

Entry Price:  $0.70 (5/13/11)

Exit Target: $1.40

Return:  -43%

Stop Target:  None

Action:  MGM traded to a high of $15.25 at the open but is testing support at $14.  The next level of resistance is at $15.75.


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)   

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.

Mattel (MAT, $27.32, down $0.33)

August 28 calls (MAT110820C00028000, $0.45, down $0.30)

Thoughts:  Mattel got a downgrade today which doesn’t bode well for earnings.  Support should hold at $27 which was prior resistance so we shall see.  The company announces earnings on Friday.

 

Cisco Systems (CSCO, $15.39, down $0.35)

September 16 calls (CSCO110917C00016000, $0.50, down $0.10)

Thoughts:  There is strong support down to $15.


Patriot Coal (PCX, $22.12, down $0.86)

August 24 calls (PCX110820C00024000, $0.70, down $0.30)

Thoughts:  Continue to watch.


Polycom (PLCM, $31.64, down $0.75)

August 35 calls (PLCM110716C00067500, $0.75, down $0.20)

Thoughts:  Continue to watch but we may jump on them if they get down to 50-55 cents.


Juniper Networks (JNPR, $31.62, down $0.45)

August 35 calls (110820C00035000, $0.50, down $0.10)

Thoughts:  These are “cheap” call options on a run back to $35.

 

Williams-Sonoma (WSM, $37.61, down $0.45)

August 39 calls (WSM110716C00039000, $1.00, down $0.20)

Thoughts:  Continue to watch.