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.

1:00pm (EST)

Global Payments (GPN, $51.65, up $1.13)

August 55 calls (GPN110820C00055000, $0.45, up $0.15)

Entry Price:  $0.40 (7/13/11)

Exit Target: $0.80

Return:  13%

Stop Target:  None 

Action:  These are “cheap” options on an earnings play so they will either payoff or expire worthless.  The company reports earnings this Thursday and we are expecting a 10% move, either way.  A knock-your-socks off quarter could send shares to new highs while a disappointing quarter and outlook will send the stock tumbling.      


Patriot Coal (PCX, $24.48, up $0.55) 

August 24 calls (PCX110820C00024000, $1.75, up $0.25)

Entry Price:  $0.90 (7/13/11)

Exit Target: $1.80

Return:  94%

Stop Target:  Set a hard stop at $1.20

Action:  Shares have traded to a high of $24.70 today and the next area of resistance is at $26 which is probably where we will start taking profits.  We have also set a hard stop to protect profits and will raise along the way if shares continue higher.  Patriot Coal will report earnings on July 26.    


Qualcomm (QCOM, $56.48, up $1.20)

October 65 calls (QCOM111022C00065000, $0.55, up $0.10)

Entry Price:  $0.85 (7/11/11)

Exit Target: $1.70

Return:  -35%

Stop Target:  None 

Action:  Qualcomm reports on Wednesday.  A beat-and-raise on earnings should get the stock pushing $60 again but a miss could send shares below $53, possibly $50.

 

TiVo (TIVO, $10.09, up $0.10)

August 11 calls (TIVO110820C00011000, $0.30, flat) 

Entry Price:  $0.55 (7/1/11)

Exit Target: $1.10

Return:  -45%

Stop Target:  None 

Action:  TiVo closed below $10 yesterday so let’s see if shares got stretched or if they continue lower.  We are looking for a 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, $82.46, up $0.98)

August 86 calls (IWM110820C00086000, $0.65, up $0.15)

Entry Price:  $1.10 (7/1/11)

Exit Target: $2.20

Return:  -41%

Stop Target:  $0.55 

Action:  We are looking for a test to new highs in July or by mid-August which will more than double these calls.  Continue to hold.


Freeport-McMoRan (FCX, $56.08, up $1.03)

August 57 calls (FCX110820C00057000, $1.90, up $0.30)

Entry Price:  $1.18 (7/1/11)

Exit Target: $2.40

Return:  61%

Stop Target:  $1.00

Action:  We believe copper prices will continue to rise and we have 5 more weeks to ride this trade to a double.  However, the company reports earnings on Thursday so it may be a roadblock.  Once the numbers hit the Street, we expect the stock to test new highs or fall back under $50.  

   

Seattle Genetics (SGEN, $17.68, down $0.22)

August 22.50 calls (SGEN110820C00022500, $0.20, flat)

Entry Price:  $1.10 (6/28/11)

Exit Target: $2.50

Return:  -82%

Stop Target:  $0.55 


September 20 calls (SGEN110917C00020000, $1.00, flat) 

Entry Price:  $1.50 (5/9/11)

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

Return:  7%

Stop Target:  $2.20   

Action:  There is strong support at $17 which represented prior resistance before the breakout but we are frustrated with this trade because it is one of our favorite stocks.  The company may need to do more clinical tests but their drugs and royalties are going to grow earnings for years to come.   

   

Symantec (SYMC, $19.35, up $0.49)

October 20 calls (SYMC111022C00020000, $0.90, up $0.15) 

Entry Price:  $0.93 (6/21/11)

Exit Target: $2.00  

Return:  -3%

Stop Target:  None

Action:  Our near-term target is $22 for Symantec and the company will report earnings on July 27. 


Rambus (RMBS, $14.32, up $0.32)

August 17 calls (RMBS110820C00017000, $0.20, flat)

Entry Price:  $0.60 (6/20/11)

Exit Target: $1.20+  

Return:  -67%

Stop Target:  None

Action:  The court case could wrap up sooner than we think which would be great news for Rambus.  

If Rambus can win its current litigation case then expect a breakout and a run into the $20’s.  The company will report earnings next Thursday, July 21.  The stock held $14 and we said there could be a test down to $13-and change as the low came in at $13.85 yesterday.  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, $13.43, down $0.51)

October 15 calls (REDF111022C00015000, $1.50, down $0.25)

Entry Price:  $1.25 (6/01/11)

Exit Target: $2.50

Return:  20%

Stop Target:  $1.00, or if shares fall back below $12

Action:  Shares pushed $14.48 earlier today and we have 94 days before these options expire.  Sit back and enjoy the ride as we are targeting a run to $17-$18.  However, we may protect gains if there is some slippage because we want to protect our profits due to the volatility associated with this name.  A break above $14 (orange line) would be beautiful while a drop below $12 (red line) would force us out (log in to Members Area to see today’s chart).


MGM Resorts International (MGM, $15.13, up $0.34)

September 17 calls (MGM110917C00017000, $0.70, up $0.25)

Entry Price:  $0.70 (5/13/11)

Exit Target: $1.40

Return:  0%

Stop Target:  None

Action:  We nailed resistance as shares have traded up to $15.75 today.  We have over 2 months before these options expire and we are looking for MGM to make a run at $17 once $15.75 is cleared.  Support is strong at $14. 


Other 2011 Portfolio OPEN positions (3):  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.

RF MicroDevices August 10 calls (from February 2011)  

Dendreon August 50 calls (from April 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.

We will update this section in the morning.