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.

1:10pm (EST)

NEW TRADES!!!

Spider S&P 500 (SPY, $131.48, down $1.85)

Buy to OPEN August 135 calls (SPY110820C00135000, $0.95, down $0.55)

Action:  Use limit prices of 95 cents to establish positions but do not pay over $1.00-$1.05.


Spider Dow Jones Industrial Average (DIA, $123.67, down $1.16)

Buy to OPEN August 126 calls (DIA110820C00126000, $1.05, down $0.35)

Action:  Use limit prices of $1.00-$1.10 to establish positions but do not pay more than $1.15.


CURRENT TRADES

Mead Johnson Nutrition (MJN, $67.18, down $1.66)

November 80 calls (MJN111119C00080000, $0.60, down $0.10)

Entry Price:  $0.55 (7/26/11)

Exit Target: $1.10+  

Return:  9%

Stop Target:  None

Action:  These options have 114 days before they expire and the company announces earnings on Thursday.  We are expecting MJN to report sweet numbers.  Shares jumped 5% in April after they beat expectations by 4 cents and these options should double if we get a move above $70-$71 in the stock.


Rambus (RMBS, $14.57, down $0.55)

September 17 calls (RMBS110917C00017000, $0.40, down $0.10) 

Entry Price:  $0.65 (7/22/11)

Exit Target: $1.30+  

Return:  -38%

Stop Target:  None


August 17 calls (RMBS110820C00017000, $0.10, down $0.05)

Entry Price:  $0.60 (6/20/11)

Exit Target: $1.20+  

Return:  -83%

Stop Target:  None

Action:  The technical picture:  Rambus continues to hold $15 after breaking through this level last Friday.  This area was major 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 over 3 weeks before they expire.  The September calls have 51 days.

The legal battle:  The current litigation isn’t expected to end until August but we are hearing things could wrap up this week or next.  In other words, there could be a settlement or a verdict very soon.

 

Broadcom (BRCM, $36.97, down $1.23)

August 38 calls (BRCM110820C00038000, $0.85, down $0.50)

Entry Price:  $0.55 (7/20/11)

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

Return:  127%

Stop Target:  $1.15

Action:   These options opened at $1.18 and we knew they would take a hit today but we like Broadcom a lot.  We have plenty of room to protect profits but we believe shares will easily trade $40+ once the market rallies.


Qualcomm (QCOM, $55.10, down $1.44)

October 65 calls (QCOM111022C00065000, $0.35, down $0.10)

Entry Price:  $0.85 (7/11/11)

Exit Target: $1.70

Return:  -59%

Stop Target:  None 

Action:  These options have 3 months before they expire and we are looking for a run past resistance at $60 and support is strong at $55.    


TiVo (TIVO, $9.75, down $0.08)

August 11 calls (TIVO110820C00011000, $0.15, flat)

Entry Price:  $0.55 (7/1/11)

Exit Target: $1.10

Return:  -73%

Stop Target:  None 

Action:  TiVo closed below $10 and now faces risk of falling back to $8.50-$9.  If shares can break above resistance at $11 they have a little room to run but we need to get above $10.50, first.  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, $80.63, down $1.80)

August 86 calls (IWM110820C00086000, $0.30, down $0.25)

Entry Price:  $1.10 (7/1/11)

Exit Target: $2.20

Return:  -73%

Stop Target:  $0.55 

Action:  Continue to hold.


Freeport-McMoRan (FCX, $55.07, down $1.01)

August 57 calls (FCX110820C00057000, $1.25, down $0.35)

Entry Price:  $1.18 (7/1/11)

Exit Target: $2.40

Return:  6%

Stop Target:  $1.40 

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

   

Symantec (SYMC, $18.56, down $0.51)

October 20 calls (SYMC111022C00020000, $0.65, down $0.10) 

Entry Price:  $0.93 (6/21/11)

Exit Target: $2.00  

Return:  -30%

Stop Target:  None

Action:  Symantec will announce earnings today.  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.


MGM Resorts International (MGM, $15.57, down $0.30)

September 17 calls (MGM110917C00017000, $0.60, down $0.05) 

Entry Price:  $0.70 (5/13/11)

Exit Target: $1.40

Return:  -14%

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)

Rediff.com India October 15 calls (from June 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.