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.

1:05pm (EST)

Global Payments (GPN, $51.25, up $0.19)

Buy to OPEN August 55 calls (GPN110820C00055000, $0.40, flat)

Action:  Use limit orders of 40 cents which should get filled.  The bid is 35 cents, the ask is 40 cents.  In any event, do not pay more than 45-50 cents to establish positions.  We like this stock and there is a chance shares can move 10% on good earnings. 


Patriot Coal (PCX, $22.97, up $0.87) 

Buy to OPEN August 24 calls (PCX110820C00024000, $0.90, up $0.25)

Action:  Use limit prices up to $1.00 but do not pay more than $1.05 to establish positions.

We will update both trades and their targets in the morning. 

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12:45pm (EST)

Qualcomm (QCOM, $56.81, up $0.29)

October 65 calls (QCOM111022C00065000, $0.70, up $0.05)

Entry Price:  $0.85 (7/11/11)

Exit Target: $1.70

Return:  -18%

Stop Target:  None 

Action:  The company reports earnings on July 20 and is rumored to be the chip of choice in the iPhone5. 

 

TiVo (TIVO, $10.57, up $0.29)

August 11 calls (TIVO110820C00011000, $0.40, flat $0.05)

Entry Price:  $0.55 (7/1/11)

Exit Target: $1.10

Return:  -27%

Stop Target:  None 

Action:  Shares hit a high of $10.50 yesterday after the company announced its free “TiVo App” and we are above that level today.  Perhaps, Apple will make a bid for the company since it still has big plans for its Apple TV?

We still feel shares will continue to test their 2-year resistance level of $11 and a breakout is coming.  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.  Our breakeven point is $11.55 and we have a little over a month to wait for a surge past resistance.


iShares Russell 2000 (IWM, $84.24, up $1.39)

August 86 calls (IWM110820C00086000, $1.35, up $0.35)

Entry Price:  $1.10 (7/1/11)

Exit Target: $2.20

Return:  23%

Stop Target:  $0.55 

Action:  Continue to hold.


Freeport-McMoRan (FCX, $55.67, up $1.84)

August 57 calls (FCX110820C00057000, $2.00, up $0.65)

Entry Price:  $1.18 (7/1/11)

Exit Target: $2.40

Return:  69%

Stop Target:  $0.60

Action:  Freeport is rebounding again today.  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, $20.31, up $0.51)

August 22.50 calls (SGEN110820C00022500, $0.95, up $0.15)

Entry Price:  $1.10 (6/28/11)

Exit Target: $2.50

Return:  -27%

Stop Target:  $0.55 


September 20 calls (SGEN110917C00020000, $2.40, up $0.20) 

Entry Price:  $1.50 (5/9/11)

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

Return:  53%

Stop Target:  $2.20   

Action:  Seattle G is back above $20 and has recovered 2/3’s of yesterday’s pullback which makes us a little more comfortable.  There is talk the news is already prices into the stock but we would disagree.  If the company can get its drug on the market then the pop was only from $17 to $20?  We have been following the company for nearly a year now and we have said shares are going to $30 so let’s see.

The FDA “reviewers” will meet this Thursday to discuss Seattle’s two drug applications and there are some concerns on the size of the clinical trials.  This is a preliminary meeting so we aren’t too concerned with because we think all systems will be go by the end of August. 

The FDA usually takes the panel’s review pretty seriously so we can’t ignore there could be some bad news coming though.  

   

Symantec (SYMC, $19.55, up $0.32)

October 20 calls (SYMC111022C00020000, $0.95, up $0.05) 

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.   


Rambus (RMBS, $14.33, up $0.23)

August 17 calls (RMBS110820C00017000, $0.25, flat)

Entry Price:  $0.60 (6/20/11)

Exit Target: $1.20+  

Return:  -58%

Stop Target:  None

Action:  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.  If Rambus can win its current litigation case then expect a breakout and a run into the $20’s.


Rediff.com India (REDF, $11.80, up $0.90)

October 15 calls (REDF111022C00015000, $1.00, up $0.25)

Entry Price:  $1.25 (6/01/11)

Exit Target: $2.50

Return:  -20%

Stop Target:  None

Action:  The October options 3 months 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, $15.01, up $0.52)

September 17 calls (MGM110917C00017000, $0.55, up $0.10)

Entry Price:  $0.70 (5/13/11)

Exit Target: $1.40

Return:  -21%

Stop Target:  None

Action:  Continue to hold.


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.

We will update this section in the morning but we like one or two of the trades from this morning so stand by….

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8:50am (EST)

Qualcomm (QCOM, $56.52, down $1.72)

October 65 calls (QCOM111022C00065000, $0.65, down $0.25)

Entry Price:  $0.85 (7/11/11)

Exit Target: $1.70

Return:  -24%

Stop Target:  None 

Action:  We think Qualcomm can trade to $70 over the next 3 months but we said a test to $55 could be in the cards, first.  If we do get down to support, and hold, we may add an August call option to play a bounce back to $60.  We don’t double-down on positions but we do see an opportunity to make another quick trade if shares fall to double-nickels.

The company reports earnings on July 20 and is rumored to be the chip of choice in the iPhone5. 

 

TiVo (TIVO, $10.28, down $0.13)

August 11 calls (TIVO110820C00011000, $0.35, flat)

Entry Price:  $0.55 (7/1/11)

Exit Target: $1.10

Return:  -36%

Stop Target:  None 

Action:  Shares hit a high of $10.50 yesterday after the company announced its free “TiVo App” is ready to download for the iPhone and iPad.  Perhaps, Apple will make a bid for the company since it still has big plans for its Apple TV?

We still feel shares will continue to test their 2-year resistance level of $11 and a breakout is coming.  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.  Our breakeven point is $11.55 and we have a little over a month to wait for a surge past resistance.


iShares Russell 2000 (IWM, $82.85, down $0.47)

August 86 calls (IWM110820C00086000, $1.00, down $0.10)

Entry Price:  $1.10 (7/1/11)

Exit Target: $2.20

Return:  -9%

Stop Target:  $0.55 

Action:  Continue to hold.


Freeport-McMoRan (FCX, $54.08, up $0.78)

August 57 calls (FCX110820C00057000, $1.35, up $0.30)

Entry Price:  $1.18 (7/1/11)

Exit Target: $2.40

Return:  14%

Stop Target:  $0.60

Action:  Shares traded to a high of $55.08 and we were cheering for a close above $55.  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, $19.80, down $0.74)

August 22.50 calls (SGEN110820C00022500, $0.80, down $0.20)

Entry Price:  $1.10 (6/28/11)

Exit Target: $2.50

Return:  -27%

Stop Target:  $0.55 


September 20 calls (SGEN110917C00020000, $2.20, down $0.30) 

Entry Price:  $1.50 (5/9/11)

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

Return:  47%

Stop Target:  $2.20   

Action:  When we first profiled the September calls, shares were just above $17 and the $19.60 level represented serious resistance.  The level held yesterday which was good to see as traders were nervous on what the FDA’s panel will recommend to them.

The FDA “reviewers” will meet this Thursday to discuss Seattle’s two drug applications and there are some concerns on the size of the clinical trials.  This is a preliminary meeting so we aren’t too concerned with because we think all systems will be go by the end of August. 

The FDA usually takes the panel’s review pretty seriously so we can’t ignore there could be some bad news coming though.  


Symantec (SYMC, $19.23, down $0.13)

October 20 calls (SYMC111022C00020000, $0.90, down $0.05) 

Entry Price:  $0.93 (6/21/11)

Exit Target: $2.00  

Return:  -3%

Stop Target:  None

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


Rambus (RMBS, $14.10, down $0.16)

August 17 calls (RMBS110820C00017000, $0.25, flat)

Entry Price:  $0.60 (6/20/11)

Exit Target: $1.20+  

Return:  -58%

Stop Target:  None

Action:  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.  If Rambus can win its current litigation case then expect a breakout and a run into the $20’s.


Rediff.com India (REDF, $10.90, down $0.65)

October 15 calls (REDF111022C00015000, $0.75, down $0.15)

Entry Price:  $1.25 (6/01/11)

Exit Target: $2.50

Return:  -40%

Stop Target:  None

Action:  The October options 3 months 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, $14.49, up $0.42)

September 17 calls (MGM110917C00017000, $0.45, up $0.10)

Entry Price:  $0.70 (5/13/11)

Exit Target: $1.40

Return:  -36%

Stop Target:  None

Action:  Continue to hold.


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.

Quality Systems (QSII, $89.10, down $0.94)

September 100 calls (QSII110917C00100000, $0.95, down $0.15)

Thoughts:  The 52-week high is $92.38 and the chart on Quality Systems is a thing of beauty.  


Global Payments (GPN, $51.06, down $0.12)

August 55 calls (GPN110820C00055000, $0.40, down $0.10)

Thoughts:  We like this stock and there is a chance shares can move 10% on good earnings. 


Cisco Systems (CSCO, $15.60, up $0.17)

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

Thoughts:  These options traded to a high of 76 cents yesterday, up 50%, as over 2,000 contracts traded hands.  If shares can hold support and trade up to $17 over the next 9 weeks then these calls will double. 


Patriot Coal (PCX, $22.10, up $0.11) 

August 24 calls (PCX110820C00024000, $0.65, flat)

Thoughts:  We like this trade but let’s make sure $22 holds.  If not, shares could fall back to $20.  patriot Coal traded up to $22.73 and the low was $22 so we may be getting a nice setup. 


Polycom (PLCM, $31.07, down $0.68)

August 33.75 calls (PLCM110716C00033750, $0.95, down $0.50)

Thoughts:  Watch for now. 


Juniper Networks (JNPR, $31.18, down $0.27)

August 35 calls (110820C00035000, $0.40, down $0.10)

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


Williams-Sonoma (WSM, $37.33, down $0.21)

August 39 calls (WSM110716C00039000, $1.00, down $0.05)

Thoughts:  Continue to watch.