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)

Broadcom (BRCM, $34.62, down $0.06)

August 38 calls (BRCM110820C00038000, $0.50, flat)

Entry Price:  $0.55 (7/20/11)

Exit Target: $1.10

Return:  -9%

Stop Target:  None 

Action:  We went over Broadcom’s chart this morning in our video and shares should easily make a run back to $36 with resistance at $38 next.  A break above $38 should have enough momentum to get the stock to $40.


Global Payments (GPN, $52.09, up $0.16)

August 55 calls (GPN110820C00055000, $0.50, up $0.05)

Entry Price:  $0.40 (7/13/11)

Exit Target: $0.80

Return:  25%

Stop Target:  None 

Action:  The 52-week high is $53.67 and we are looking for a run past $55 when the company reports earnings tomorrow.  If they miss their numbers, shares could suffer and the options could expire worthless so this is a high risk/ high reward trade.  However, if they beat estimates and raise guidance then shares should move past double nickels.   


Patriot Coal (PCX, $24.37, down $0.30) 

August 24 calls (PCX110820C00024000, $1.65, down $0.15)

Entry Price:  $0.90 (7/13/11)

Exit Target: $1.80

Return:  83%

Stop Target:  $1.20 (Hard Stop)

Action:  The next area of resistance is at $26 which is probably where we will start taking profits on at least half.  Patriot Coal will report earnings on July 26.    


Qualcomm (QCOM, $57.59, up $0.61)

October 65 calls (QCOM111022C00065000, $0.75, up $0.15)

Entry Price:  $0.85 (7/11/11)

Exit Target: $1.70

Return:  -12%

Stop Target:  None 

Action:  Qualcomm reports after the bell and should do well with the number of smart phones being sold.  Shares have reached a high of $59.40 today, just short of the 52-week high of $59.84.  These options have 93 days before they expire so even if the stocks drops after the announcement we think there will be a recovery over the next 3 months.  However, we are looking for a run past $60 on Thursday.  

 

TiVo (TIVO, $10.08, 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 bounced back to reclaim the $10 level and traded up to $10.21.  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, $82.88, down $0.44)

August 86 calls (IWM110820C00086000, $0.75, down $0.10)

Entry Price:  $1.10 (7/1/11)

Exit Target: $2.20

Return:  -32%

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.  The 52-week high is $86.81 and we would like to see a move above $84.50-$85 today.  


Freeport-McMoRan (FCX, $56.02, down $0.28)

August 57 calls (FCX110820C00057000, $1.80, down $0.20)

Entry Price:  $1.18 (7/1/11)

Exit Target: $2.40

Return:  53%

Stop Target:  $1.40 

Action:  Freeport reports earnings tomorrow and we are going to let the trade ride.  Some of you may wish to close half to protect profits because earnings can be tricky but we think shares are headed to $60.    


Symantec (SYMC, $18.98, down $0.48)

October 20 calls (SYMC111022C00020000, $0.80, down $0.15) 

Entry Price:  $0.93 (6/21/11)

Exit Target: $2.00  

Return:  -14%

Stop Target:  None

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


Rambus (RMBS, $14.67, up $0.07)

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 and we covered this in our video last night.  If the company 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, $12.23, down $0.25)

October 15 calls (REDF111022C00015000, $1.00, down $0.20)

Entry Price:  $1.25 (6/01/11)

Exit Target: $2.50

Return:  -20%

Stop Target:  $1.00

Action:  REDF gave us fits yesterday after a testing a high of $14.48 and then dropping to a low of $12.20.  Shares were down over 10% but more importantly we need the $12 level to hold.


MGM Resorts International (MGM, $15.40, down $0.05)

September 17 calls (MGM110917C00017000, $0.65, flat)

Entry Price:  $0.70 (5/13/11)

Exit Target: $1.40

Return:  -7%

Stop Target:  None

Action:  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 (5):  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)

Seattle Genetics August 22.50 calls (from June 2011)

Seattle Genetics September 20 calls (from May) 


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.

********************************

11:10am (EST)

Broadcom (BRCM, $34.98, up $0.30)

Buy to OPEN August 38 calls (BRCM110820C00038000, $0.55, up $0.05)

Action:  Use limit prices of 55 cents but do not pay over 60-65 cents to establish positions.

We went over Broadcom’s chart this morning in our video and shares should easily make a run back to $36 with resistance at $38 next.  A break above $38 should have enough momentum to get the stock to $40.

********************************

9:00am (EST)

Global Payments (GPN, $51.93, up $1.41)

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:  Shares went out at the high yesterday after gaining nearly 3%.  The 52-week high is $53.67 and we are looking for a run past $55 when the company reports earnings on Thursday.  If they miss their numbers, shares could suffer and the options could expire worthless so this is a high risk/ high reward trade.   


Patriot Coal (PCX, $24.67, up $0.74) 

August 24 calls (PCX110820C00024000, $1.80, up $0.30)

Entry Price:  $0.90 (7/13/11)

Exit Target: $1.80

Return:  100%

Stop Target:  $1.20 (Hard Stop)

Action:  Shares traded to a high of $24.74 while the options reached $1.85.  The next area of resistance is at $26 which is probably where we will start taking profits on at least half.  Patriot Coal will report earnings on July 26.    


Qualcomm (QCOM, $56.98, up $1.70)

October 65 calls (QCOM111022C00065000, $0.60, up $0.15)

Entry Price:  $0.85 (7/11/11)

Exit Target: $1.70

Return:  -29%

Stop Target:  None 

Action:  Qualcomm reports after the bell.  

 

TiVo (TIVO, $10.18, up $0.19)

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 bounced back to reclaim the $10 level and traded up to $10.21.  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, $83.32, up $1.84)

August 86 calls (IWM110820C00086000, $0.85, up $0.35)

Entry Price:  $1.10 (7/1/11)

Exit Target: $2.20

Return:  -23%

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.  The 52-week high is $86.81 and we would like to see a move above $84.50-$85 today.  


Freeport-McMoRan (FCX, $56.30, up $1.25) 

August 57 calls (FCX110820C00057000, $2.00, up $0.40)

Entry Price:  $1.18 (7/1/11)

Exit Target: $2.40

Return:  69%

Stop Target:  $1.00, raise to $1.40 

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 tomorrow so we have to decide if we want to close half of the trade to protect profits or let it all ride.  We will let you know at 1pm what the plans are.    

   

Seattle Genetics (SGEN, $18.00, up $0.10)

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:  We may move this trade to our “Hold” section until shares make a run back to $20.

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, $19.46, up $0.59)

October 20 calls (SYMC111022C00020000, $0.95, up $0.20) 

Entry Price:  $0.93 (6/21/11)

Exit Target: $2.00  

Return:  2%

Stop Target:  None

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


Rambus (RMBS, $14.60, up $0.60)

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.  Over 1,000 or more contracts traded on the August 15’s, 16’s and 17 call options, respectively, which let’s us know traders are building positions.   

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, $12.48, down $1.46)

October 15 calls (REDF111022C00015000, $1.20, down $0.40)

Entry Price:  $1.25 (6/01/11)

Exit Target: $2.50

Return:  -4%

Stop Target:  $1.00

Action:  REDF gave us fits yesterday after a testing a high of $14.48 and then dropping to a low of $12.20.  Shares were down over 10% but more importantly we need the $12 level to hold.


MGM Resorts International (MGM, $15.45, up $0.66)

September 17 calls (MGM110917C00017000, $0.65, up $0.20)

Entry Price:  $0.70 (5/13/11)

Exit Target: $1.40

Return:  -7%

Stop Target:  None

Action:  We nailed resistance at $15.75 which is where shares traded to on Tuesday.  It looks as though traders are taking our lead on this one as over 6,000 contracts traded on the September 14 calls.  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.

Broadcom (BRCM, $34.68, up $2.03)

August 38 calls (BRCM110820C00038000, $0.50, up $0.25)

Thoughts:  Shares could make a quick run back to $40.


Amgen (AMGN, $55.21, up $0.61)

August 55 calls (AMGN110820C00055000, $1.40, up $0.15)

Thoughts:  Amgen has traded lower for much of July and has dropped from $58 to $55 in a couple of weeks.  The company reports earnings on July 29, before the bell, and shares made a nice bounce off support yesterday.


Mead Johnson Nutrition (MJN, $69.84, up $1.29)

August 70 calls (MJN110820C00070000, $1.70, up $0.40)

November 80 calls (MJN111119C00070000, $0.85, up $0.15)

Thoughts:  Shares are near their 52-week high of $69.99 and looked poised to hit the mid-to-upper $70’s.  We were thisclose to releasing the trade as an official recommendation but we want to close out a few positions before taking on new ones.


Travelzoo (TZOO, $87.79, up $2.88) 

August 90 calls (TZOO110820C00090000, $7.20, up $0.90)

August 60 puts (TZOO110820P00060000, $1.60, down $0.30)

Thoughts:  Travelzoo will now report earnings on Thursday.  The calls opened at $3.10 and easily doubled while the puts opened at $2.20 on Monday morning.  If you bought at the open, you are now up 66%.  

The 52-week high is $103, the low is $13.75.  Last time out shares moved over $20 and have moved higher in the last 4 quarters when they have announced.  If the company can impress the Street, then the stock could hit triple-digits again.  If not a drop to double-nickels ($55) could be in the cards.  

  

Quality Systems (QSII, $88.57, up $3.02)

September 100 calls (QSII110917C00100000, $0.80, up $0.40)

Thoughts:  These options doubled yesterday and this is another trade we really like.  The 52-week high is $92.38 and the chart on Quality Systems is a thing of beauty.  Shares bounced off strong support and if it holds we would expect shares to make a run back to $90 and new highs.  


RealD (RLD, $18.94, down $0.10)

August 17.50 puts (RLD110820P00017500, $1.55, flat)

Thoughts:  We would have liked to have seen a bump past $20 so we could think about buying puts and we may, or may not, get the chance before a drop to $15 hits.    


Polycom (PLCM, $32.13, up $1.39)   

August 33.75 calls (PLCM110716C00033750, $1.05, up $0.30)

Thoughts:  Watch for now. 


Juniper Networks (JNPR, $31.58, up $1.55)

August 33 calls (110820C00033000, $0.85, up $0.40)

Thoughts:  Shares of Juniper jumped 5% as the options doubled yesterday.  We may have missed our small window of opportunity as Juniper looks like it could test $35 again.  

 

Williams-Sonoma (WSM, $38.57, up $0.80)

August 39 calls (WSM110716C00039000, $1.50, up $0.40)

Thoughts:  The stock cleared resistance at $38 and will now eye a run to $40+.  The 52-week high is $45.48 so watch these options closely.