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.

12:40pm (EST)

Mead Johnson Nutrition (MJN, $68.97, up $0.01)

November 80 calls (MJN111119C00070000, $0.70, up $0.05)

Entry Price:  $0.55 (7/26/11)

Exit Target: $1.10+  

Return:  27%

Stop Target:  None

Action:  These options have 115 days before they expire.  The company announces earnings on Thursday and we are expecting MJN to report sweet numbers.  Shares jumped 5% in April after they beat expectations by 4 cents.


Rambus (RMBS, $15.15, down $0.02)

September 17 calls (RMBS110917C00017000, $0.55, flat) 

Entry Price:  $0.65 (7/22/11)

Exit Target: $1.30+  

Return:  -15%

Stop Target:  None


August 17 calls (RMBS110820C00017000, $0.20, flat)

Entry Price:  $0.60 (6/20/11)

Exit Target: $1.20+  

Return:  -67%

Stop Target:  None

Action:  Rambus continues to hold $15 which is a good sign.  This area was resistance and should act as short-term support.  We are expecting a run up to $19 over the next few weeks and the August options have 24 days before they expire.  The September calls have 52 days before they expire.

We have been following this company for years and this could finally be the case that wins Rambus a windfall.  The current litigation isn’t expected to end until August but we are hearing things could wrap up sooner than that.  In other words, there could be a settlement or a verdict soon.

 

Broadcom (BRCM, $38.40, up $3.49)

August 38 calls (BRCM110820C00038000, $1.60, up $1.10)

Entry Price:  $0.55 (7/20/11)

Exit Target: $1.50 (closed half at $1.65 on 7/26/2011) 

Return:  200%

Stop Target:  $1.25 (HARD STOP on other half)

Action:  Shares look strong and the 52-week high is $47-and change.  If we get a run to new highs the other half of the trade will soar.  If not, we lock in profits.   


Qualcomm (QCOM, $56.64, down $0.17)

October 65 calls (QCOM111022C00065000, $0.50, flat)

Entry Price:  $0.85 (7/11/11)

Exit Target: $1.70

Return:  -41%

Stop Target:  None 

Action:  What a letdown.  Qualcomm got no love off the Broadcom news.  We aren’t too worried as these options have 3 months before they expire and we are looking for a run past resistance at $60.  If cleared, we believe Qualcomm can make a run to $70.


TiVo (TIVO, $9.91, down $0.10)

August 11 calls (TIVO110820C00011000, $0.20, flat)

Entry Price:  $0.55 (7/1/11)

Exit Target: $1.10

Return:  -64%

Stop Target:  None 

Action:  TiVo fell to the bottom of its trading range and is trying to hold support at $10.  If shares can break above resistance at $11 they have a little room to run.  We are looking for a surge to $18 on short covering, buyout news, or a partnership.  Our breakeven point is $11.55 and we have until mid-August to wait for a move. 


iShares Russell 2000 (IWM, $82.87, down $0.19)

August 86 calls (IWM110820C00086000, $0.70, down $0.05)

Entry Price:  $1.10 (7/1/11)

Exit Target: $2.20

Return:  -36%

Stop Target:  $0.55 

Action:  The 52-week high is $86.81 and we would like to see a move above $85.50 this week which is short-term resistance and prior support.


Freeport-McMoRan (FCX, $56.15, up $0.69)

August 57 calls (FCX110820C00057000, $1.65, up $0.15)

Entry Price:  $1.18 (7/1/11)

Exit Target: $2.40

Return:  40%

Stop Target:  $1.40 

Action:  Shares face resistance at $57-$58 which should lead to a pop to $60 if taken out.  Support has been strong at $55 which was prior resistance.     

   

Symantec (SYMC, $19.10, up $0.01)

October 20 calls (SYMC111022C00020000, $0.75, flat) 

Entry Price:  $0.93 (6/21/11)

Exit Target: $2.00  

Return:  -19%

Stop Target:  None

Action:  Symantec will announce earnings on Wednesday.  The $19.50 area has been strong resistance over the past few months while support has been solid at $18.65.  Our price target is $22 for Symantec over the next 3-6 months.


Rediff.com India (REDF, $9.61, down $1.57)

October 15 calls (REDF111022C00015000, $0.40, down $0.30)

Entry Price:  $1.25 (6/01/11)

Exit Target: $2.50

Return:  -68%

Stop Target:  $1.00

Action:  The company reported earnings today which were okay but Wall Street didn’t like them.  The company has a nice hoard of cash to grow and we have said this will be a volatile position.  We have been down 60%, up 25%, and back down, now, with this trade.  We still have 87 days for our story to play out.  Continue to hold.             


MGM Resorts International (MGM, $15.80, down $0.03)

September 17 calls (MGM110917C00017000, $0.65, flat) 

Entry Price:  $0.70 (5/13/11)

Exit Target: $1.40

Return:  -7%

Stop Target:  None

Action:  The 52-week high is $16.95 which will also be the next area of resistance if $15.75 holds.  Support is strong at $14.50. 


Other 2011 Portfolio OPEN positions (6):  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 2011) 

Global Payments August 55 calls (from July 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.

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9:45am (EST) 

NEW TRADE!!!

 


 


 





Mead Johnson Nutrition (MJN, $68.67, down $0.29)

Buy to OPEN November 80 calls (MJN111119C00070000, $0.55, down $0.10)

Action:  Use limit orders up to 60-65 cents to establish positions but do not pay more than 70-75 cents to establish positions.


CURRENT TRADES 

Broadcom (BRCM, $38.52, up $3.61)

August 38 calls (BRCM110820C00038000, $1.65, up $1.15)

Entry Price:  $0.55 (7/20/11)

Exit Target: $1.50 (closed half at $1.65 on 7/26/2011) 

Return:  200%

Stop Target:  $1.25 (other half) 

Action:  The options have hit our limit price of $1.65 at the open.  Close HALF of the trade and set a HARD STOP of $1.25 on the other half.   

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9:00am (EST)

Rambus (RMBS, $15.17, down $0.44)

September 17 calls (RMBS110917C00017000, $0.55, down $0.10) 

Entry Price:  $0.65 (7/22/11)

Exit Target: $1.30+  

Return:  -15%

Stop Target:  None


August 17 calls (RMBS110820C00017000, $0.20, down $0.10)

Entry Price:  $0.60 (6/20/11)

Exit Target: $1.20+  

Return:  -67%

Stop Target:  None

Action:  Rambus traded to a low of $15.10 yesterday and held the $15 level which was resistance and should act as short-term support.  We are expecting a run up to $19 over the next few weeks and the August options have 24 days before they expire.  The September calls have 52 days before they expire.

We have been following this company for years and this could finally be the case that wins Rambus a windfall.  The current litigation isn’t expected to end until August but we are hearing things could wrap up sooner than that.  In other words, there could be a settlement or a verdict soon.


Broadcom (BRCM, $34.91, down $0.56)

August 38 calls (BRCM110820C00038000, $0.50, down $0.20)

Entry Price:  $0.55 (7/20/11)

Exit Target: $1.10, raise to $1.50 

Return:  -9%

Stop Target:  None 

Action:  Set limit prices to close HALF of the position at $1.65 or better into the open.  If we don’t get filled, we will send out a TRADE ALERT with adjustments shortly after the open.

The options should at least double today and we will try to close HALF into strength.  We would like to see shares open above $38 and possibly make a run to $40.  If shares reach $40, these options will be worth at least $2.00 which would equal a return of over 250%. 


Qualcomm (QCOM, $56.81, down $0.65)

October 65 calls (QCOM111022C00065000, $0.50, down $0.05)

Entry Price:  $0.85 (7/11/11)

Exit Target: $1.70

Return:  -41%

Stop Target:  None 

Action:  Qualcomm should get a lift this morning on the Broadcom news and shares were up slightly in after-hours last night.  These options have 3 months before they expire and we are looking for a run past resistance at $60.  If cleared, we believe Qualcomm can make a run to $70.


TiVo (TIVO, $10.01, down $0.28)

August 11 calls (TIVO110820C00011000, $0.20, down $0.05)

Entry Price:  $0.55 (7/1/11)

Exit Target: $1.10

Return:  -64%

Stop Target:  None 

Action:  TiVo fell to the bottom of its trading range and is holding support at $10.  If shares can break above resistance at $11 they have a little room to run.  We are looking for a surge to $18 on short covering, buyout news, or a partnership.  Our breakeven point is $11.55 and we have until mid-August to wait for a move.  


iShares Russell 2000 (IWM, $83.06, down $0.99)

August 86 calls (IWM110820C00086000, $0.75, down $0.25)

Entry Price:  $1.10 (7/1/11)

Exit Target: $2.20

Return:  -32%

Stop Target:  $0.55 

Action:  The 52-week high is $86.81 and we would like to see a move above $85.50 this week which is short-term resistance and prior support.


Freeport-McMoRan (FCX, $55.46, down $0.21)

August 57 calls (FCX110820C00057000, $1.30, down $0.15)

Entry Price:  $1.18 (7/1/11)

Exit Target: $2.40

Return:  10%

Stop Target:  $1.40 

Action:  Shares face resistance at $57-$58 which should lead to a pop to $60 is taken out.  Support has been strong at $55 which was prior resistance.     


Symantec (SYMC, $19.09, up $0.03)

October 20 calls (SYMC111022C00020000, $0.75, flat) 

Entry Price:  $0.93 (6/21/11)

Exit Target: $2.00  

Return:  -19%

Stop Target:  None

Action:  Symantec will announce earnings on Wednesday.  The $19.50 area has been strong resistance over the past few months while support has been solid at $18.65.  Our price target is $22 for Symantec over the next 3-6 months.


Rediff.com India (REDF, $11.18, down $0.15)

October 15 calls (REDF111022C00015000, $0.70, down $0.05)

Entry Price:  $1.25 (6/01/11)

Exit Target: $2.50

Return:  -44%

Stop Target:  $1.00

Action:  The company reported earnings today.             


MGM Resorts International (MGM, $15.83, up $0.03)

September 17 calls (MGM110917C00017000, $0.65, flat) 

Entry Price:  $0.70 (5/13/11)

Exit Target: $1.40

Return:  -7%

Stop Target:  None

Action:  MGM made a run at $16 yesterday, trading to a high of $15.97.  The 52-week high is $16.95 which will also be the next area of resistance if $15.75 holds.  Support is strong at $14.50. 


Other 2011 Portfolio OPEN positions (6):  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 2011) 

Global Payments August 55 calls (from July 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.

Amgen (AMGN, $54.90, down $0.32)

August 55 calls (AMGN110820C00055000, $1.20, down $0.15)

Thoughts:  The company reports earnings on Friday and there is a chance for a run to $57 if Wall Street likes what it hears.  If not, a drop to $54 or under is in order.  We like these calls at current levels and they could be used for a short-term play up until Thursday to try and make 10%-20% without the risk of an earnings announcement.


Mead Johnson Nutrition (MJN, $69.96, down $0.12)

November 80 calls (MJN111119C00070000, $0.65, flat)

Thoughts:  The company reports earnings on Thursday and we may pull the trigger on a trade today.  If we go with the November calls, the blow from an earnings miss would be less severe than if we went with August calls.  Although the August calls will provide more bang for the buck, we feel shares could hit $100 by year-end, providing the company hits their numbers and offers a rosy outlook.


Quality Systems (QSII, $89.63, down $1.16)

September 100 calls (QSII110917C00100000, $0.90, down $0.20)

Thoughts:  The company will announce earnings on Thursday.


RealD (RLD, $17.35, down $0.73)   

August 17.50 puts (RLD110820P00017500, $1.95, up $0.35)

Thoughts:  We knew when RealD was having trouble holding $20 last Monday, the stock was in trouble.  We said a break below this level could lead to a test to the mid-teens and we were hoping to get another shot at these options if shares traded back to $20 this week.  That probably ain’t happening…

The 52-week low for the stock is $15.63 and all signs are pointing towards a break below this level as shares kissed $16.65 yesterday.  

   

Polycom (PLCM, $30.41, down $0.28) 

August 32.50 calls (PLCM110716C00032500, $0.60, down $0.10)

Thoughts:  Shares made a nice reversal on Friday off support which was at $28 and prior support.  Shares could be headed to new highs if $30 holds which would be above $34.


Williams-Sonoma (WSM, $38.46, down $0.18)

August 39 calls (WSM110716C00039000, $1.35, down $0.15) 

Thoughts:  Resistance is at $39 and a break above $40 would be bullish.  The 52-week high is $45.48 so we will be watching for a move above this level as confirmation for a breakout.