August 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)

Spider S&P 500 (SPY, $127.93, down $1.40)

August 135 calls (SPY110820C00135000, $0.30, down $0.40)

Entry Price:  $0.95 (7/27/11)
Exit Target: $1.40-$1.90
Return:  -68%
Stop Target:  None

Action:  We went over the chart for the S&P 500 earlier and we have 3 weeks before these options expire.  The calls opened at 73 cents and our breakeven point is $135.95 for the Spiders.  We still believe these option s have enough time to recover but they may go down to the wire before we can turn a profit.  Continue to hold.

Spider Dow Jones Industrial Average (DIA, $120.06, down $1.07)

August 126 calls (DIA110820C00126000, $0.30, down $0.25)

Entry Price:  $1.05 (7/27/11)
Exit Target: $1.60-$2.20
Return:  -71%
Stop Target:  None

Action:  We went over the Dow’s chart and we will need a run back to $126.  

Mead Johnson Nutrition (MJN, $70.26, down $1.11)

November 80 calls (MJN111119C00080000, $0.75, down $0.20)

Entry Price:  $0.55 (7/26/11)
Exit Target: $1.10+ (closed half at $1.25 on 7/28/2011)
Return:  82%
Stop Target:  75 cents

Action:  Shares briefly dipped below $70 but are back above this level.  Let’s go ahead and wait another day before rushing out of the other half of this trade.  Continue to hold.

Rambus (RMBS, $13.64, down $0.24)

September 17 calls (RMBS110917C00017000, $0.25, down $0.05)

Entry Price:  $0.65 (7/22/11)
Exit Target: $1.30+
Return:  -62%
Stop Target:  None

August 17 calls (RMBS110820C00017000, $0.10, flat)

Entry Price:  $0.60 (6/20/11)
Exit Target: $1.20+
Return:  -83%
Stop Target:  None


August 12.50 (RMBS110820P00012500, $0.25, up $0.05)

Entry Price:  $0.15 (7/29/11)
Exit Target: $1.20+
Return:  67%
Stop Target:  None

Action:  Rambus could go to $10 or $20 over the next few weeks.  If they can get a legal victory in their ongoing litigation then shares should trade up to $20 which was prior support. 

There was a setback on Friday though, and shares run the risk of kissing $10 and possibly, single-digits.  However, Rambus is also turning its books around so we are hoping short-term support at $13.50 holds if there is further weakness.  If not, the puts could make enough to offset the calls.

      
Broadcom (BRCM, $36.57, down $0.50)

August 38 calls (BRCM110820C00038000, $0.75, down $0.20)

Entry Price:  $0.55 (7/20/11)
Exit Target: $1.50 (closed half at $1.65 on 7/26/2011)
Return:  118%
Stop Target:  70 cents

Action:  Broadcom got an upgrade this morning to “Outperform” with a $46 price target from one brokerage firm that has followed our lead.  We are looking for shares to clear $40 this week and if so, the other half of this trade will still give us some solid profits.  Shares have been holding strong support just above $36 and we are looking for a run up to $42 which has been strong resistance but will be enough to get these calls above $2.

Qualcomm (QCOM, $53.90, down $0.88)

October 65 calls (QCOM111022C00065000, $0.25, down $0.10)

Entry Price:  $0.85 (7/11/11)
Exit Target: $1.70
Return:  -71%
Stop Target:  None

Action:  Qualcomm has strong support down to $54 but we should see a quick pop back to $57 once the market turns around.  From there a run past $60 to new highs as these options have 81 days before they expire.

iShares Russell 2000 (IWM, $78.73, down $1.01)

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

Entry Price:  $1.10 (7/1/11)
Exit Target: $2.20
Return:  -91%
Stop Target:  $0.55

Action:  The Russell held its 200-day MA and we will need a run back to $86 to breakeven or take profits and we have 18 days to so.

Freeport-McMoRan (FCX, $52.77, down $0.19)

August 57 calls (FCX110820C00057000, $0.55, down $0.10)

Entry Price:  $1.18 (7/1/11)
Exit Target: $2.40
Return:  -53%
Stop Target:  $0.60

Action:  Freeport is holding support and we believe shares can still trade up to $60 over the next 3 weeks.

 
Symantec (SYMC, $18.85, down $0.21)

October 20 calls (SYMC111022C00020000, $0.60, down $0.10)

Entry Price:  $0.93 (6/21/11)
Exit Target: $2.00
Return:  -35%
Stop Target:  None

Action:  Symantec is switching out CEO’s put the transition should be smooth.  Continue to hold.

MGM Resorts International (MGM, $15.16, up$0.05)

September 17 calls (MGM110917C00017000, $0.45, down $0.05)

Entry Price:  $0.70 (5/13/11)
Exit Target: $1.40
Return:  -36%
Stop Target:  None

Action:  Shares have traded up to $15.74 today which is resistance.  Support is strong down at $14.50 and the 52-week high is $16.94.  The company announces earnings on August 8.

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.

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)
TiVo August 11 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.