October 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.

1:45pm (EST)

VWMare (VMW, $89.40, up $0.02)

Buy to OPEN November 105 calls (VMW111119C00105000, $0.85, up $0.05)

Action:  Use limit orders up to 95 cents but do not pay more than $1.00-$1.05 to establish positions.

SanDisk (SNDK, $46.02, up $1.57)

Buy to OPEN November 50 calls (SNDK111119C00050000, $1.30, up $0.35)

Action:  Use limit orders up to $1.35 but do not pay more than $1.40-$1.45 to establish positions.


Rockwell Automation (ROK, $62.92, down $1.23)

Buy to OPEN November 70 calls (ROK111119C00070000, $1.10, down $0.40)

Action:  Use limit orders up to $1.20 but do not pay more than $1.30-$1.35 to establish positions.

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12:55pm (EST)

Intuit (INTU, $52.03, up $0.03)

November 55 calls (INTU111119C00055000, $1.05, flat)

Entry Price:  $0.95 (10/12/11)
Exit Target: $1.20

Return:  11%
Stop Target: None

Action:  We have a near-term price target of $55 for Intuit but there is a chance shares could push $60.  The 52-week high is $56.46 and if taken out would also represent an all-time high.  Usually this leads to a nice run afterwards as there is no overhead resistance.    


O’Reilly Automotive (ORLY, $68.63, up $0.26)

November 75 calls (ORLY111119C00075000, $0.45, flat)

Entry Price:  $0.55 (10/10/11)
Exit Target: $1.10
Return:  -18% 
Stop Target:  None

Action:  Shares have traded up to $69.08 today and we are looking for a close above $70 this week.  The 52-week high is $72 and we could see a breakout once $70 is cleared.


Potash (POT, $48.88, down $0.31)

November 52.50 calls (POT111119C00052500, $1.40, down $0.15)

Entry Price:  $1.00 (10/6/11)
Exit Target: $2.00
Return:   40% 
Stop Target:  $1.05 (HARD STOP)

Action:  We are looking for a close above $50 this week.  Once cleared, we could see a quick run to $55 which would get these options to $2.50 or more depending on how fast we get there.  We have set a stop in place to protect profits and will likely raise it as shares move up. We may also adjust the stop if shares start to fade.


Seattle Genetics (SGEN, $20.49, down $0.33)

November 17.50 puts (SGEN111119P00017500, $0.85, up $0.10)

Entry Price:  $0.60 (10/5/11)
Exit Target: $1.20

Return:  42%
Stop Target: None

Action:  Shares have traded to a low of $20.05 today and we are looking for a close below $20.    


Pepsico (PEP, $62.14, down $0.56)

November 65 calls (PEP111119C00065000, $0.55, down $0.10)

Entry Price:  $0.50 (10/5/11)
Exit Target: $1.00 (closed half at 85 cents on 10/12/11)

Return:  40%
Stop Target: None

Action:  Close the other half of this trade at current levels.  We want to put this money towards a more aggressive play and we may get a chance to play Pepsi again if shares trade back down to $60.  

 
Microsoft (MSFT, $27.01, up $0.05)

November 26 calls (MSFT111119C00026000, $1.55, flat)

Entry Price:  $0.90 (10/5/11)
Exit Target: $1.80-$2.00 (closed at $1.40 on 10/13/11)
Return:  56%
Stop Target:  $1.40 (HARD STOP)

Action:  We were stopped out of this trade this morning when the options opened at $1.32.  We are a little disappointed because our stop of $1.30 would have kept us in but we can revisit this story as well.


Rambus (RMBS, $16.62, up $0.93)

November 16 calls (RMBS111119C00016000, $3.85, up $0.90)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+
Return:  60% 
Stop Target:  $2.00

Action:  Rambus has cleared $16 and could push $20 next.


Spreadtrum Communications (SPRD, $20.75, down $0.64)

January 25 calls (SPRD120121C00025000, $1.70, down $0.20)

Entry Price:  $1.50 (9/9/11)
Exit Target: $2.80
Return:  13%
Stop Target:  75 cents

Action:  Our near-term target for the stock is $22 and on a breakout, shares could reach $25-$30.


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.

Symantec October 20 calls (from June 2011)
Rediff.com India October 15 calls (from June 2011)
Qualcomm October 65 calls (from July 2011)
Clean Energy October 15 calls (from August 2011)
JDSU Uniphase January 20 calls (from August 2011)
                     January 16 calls (from August 2011)
Lufkin Industries December 80 calls (from September 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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9:15am (EST)

Intuit (INTU, $52.00, up $0.82)

November 55 calls (INTU111119C00055000, $1.05, up $0.20)

Entry Price:  $0.95 (10/12/11)
Exit Target: $1.20

Return:  11%
Stop Target: None

Action:  We have a near-term price target of $55 for Intuit but there is a chance shares could push $60.  The 52-week high id $56.46 and if taken out would also represent an all-time high.  Usually this leads to a nice run afterwards as there is no overhead resistance.    


Infosys Technologies (INFY, $56.34, up $3.68)  

November 60 calls (INFY111119C00060000, $0.95, up $0.35)   

Entry Price:  $0.60 (10/11/11)
Exit Target: $1.00 (closed half at $1.40, half at 90 cents on 10/12/11)

Return:  92%
Stop Target: $1.00, lower to 90 cents (HARD STOP)

Action:  We tried to give the other half of the trade some wiggle room by lowering the stop to 90 cents but this level was hit after our update yesterday so the trade is officially closed.  We were hoping to ride this one out for a few more days but we were stopped out.  Our average closing price was $1.15.  


O’Reilly Automotive (ORLY, $68.37, down $1.28)

November 75 calls (ORLY111119C00075000, $0.45, down $0.20)

Entry Price:  $0.55 (10/10/11)
Exit Target: $1.10
Return:  -18% 
Stop Target:  None

Action:  Shares opened at $69.94 yesterday which was just under resistance at $70 before pulling back and trading lower for the rest of the day.  The 52-week high is $72 and we could see a breakout once $70 is cleared.


Potash (POT, $49.26, up $1.22)

November 52.50 calls (POT111119C00052500, $1.55, up $0.30)

Entry Price:  $1.00 (10/6/11)
Exit Target: $2.00
Return:   55% 
Stop Target:  $1.05 (HARD STOP)

Action:  Potash popped to a high of $49.75 yesterday and we were looking for a close above $50.  Once cleared, we could see a quick run to $55 which would get these options to $2.50 or more depending on how fast we get there.  We have set a stop in place to protect profits and will likely raise it as shares move up. We may also adjust the stop if shares start to fade.


Seattle Genetics (SGEN, $20.82, down $0.50)

November 17.50 puts (SGEN111119P00017500, $0.75, flat)

Entry Price:  $0.60 (10/5/11)
Exit Target: $1.20

Return:  25%
Stop Target: None

Action:  We are looking for a close below $20 which should this trade going.


Pepsico (PEP, $62.70, up $1.75)

November 65 calls (PEP111119C00065000, $0.65, up $0.30)

Entry Price:  $0.50 (10/5/11)
Exit Target: $1.00 (closed half at 85 cents on 10/12/11)

Return:  50%
Stop Target: None

Action:  We closed half of this trade into strength as Pepsi traded to a high of $63.62 which is right at resistance.  We would like to see a run to $65 as we still have the other half of the trade open.  

 
Microsoft (MSFT, $26.96, down $0.04)

November 26 calls (MSFT111119C00026000, $1.55, down $0.05)

Entry Price:  $0.90 (10/5/11)
Exit Target: $1.80-$2.00
Return:  72%
Stop Target:  $1.30, raise to $1.40 (HARD STOP)

Action:  After trading to a peak of $27.25, Microsoft ended slightly lower on Wednesday.  The options reached a peak of $1.75 which was a nickel below our exit target on where we plan to close at least half of the trade.  We have raised the stop to $1.40 in case shares stumble as resistance comes into play.
 

Rambus (RMBS, $15.68, up $0.27)

November 16 calls (RMBS111119C00016000, $2.90, up $0.20)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+
Return:  21% 
Stop Target:  $2.00

Action:  Rambus traded up to $15.89 yesterday and we are looking for a close above $16 this week.


Spreadtrum Communications (SPRD, $21.39, up $1.52)

January 25 calls (SPRD120121C00025000, $1.90, up $0.30)

Entry Price:  $1.50 (9/9/11)
Exit Target: $2.80
Return:  27%
Stop Target:  75 cents

Action:  Spreadtrum surged 8% on Wednesday and traded to a high of $21.49.  Our near-term target for the stock is $22 and on a breakout, shares could reach $25-$30.
 

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.

Symantec October 20 calls (from June 2011)
Rediff.com India October 15 calls (from June 2011)
Qualcomm October 65 calls (from July 2011)
Clean Energy October 15 calls (from August 2011)
JDSU Uniphase January 20 calls (from August 2011)
                     January 16 calls (from August 2011)
Lufkin Industries December 80 calls (from September 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.

Baidu (BIDU, $130.83, up $1.36)

October 135 (WEEKLY) calls (BIDU111014C00135000, $1.10, up $0.15)

November 160 calls (BIDU111119C00160000, $2.20, up $0.45)

Thoughts:  Baidu has jumped 30 points since kissing a low of $102 last Tuesday.  We think shares can run to $150 on a great earnings report as the company announces on Monday – before the bell.  We like the October calls which expire NEXT Friday but the November options buy more time.  However, if they miss estimates then shares will not likely recover anyway so we are leaning towards picking up the October calls.  We would like to get them for under $1 so let’s see how it plays out.


First Solar (FSLR, $57.08, up $1.17)

November 70 calls (FSLR111119C00060000, $1.90, up $0.15)

November 40 puts (FSLR111119P00040000, $1.25, down $0.35)

Thoughts:  First Solar got an upgrade yesterday and we mentioned shares could bounce off of their fresh 52-week low which was set on Tuesday.


SanDisk (SNDK, $44.45, down $0.01)

November 50 calls (SNDK111119C00050000, $0.95, down $0.05)

Thoughts:  If Tech stays strong, we may add these November call options.   


Blue Nile (NILE, $42.48, up $0.75)

October 40 calls (NILE111022C00040000, $2.90, up $0.30)

November 45 calls (NILE111119C00045000, $2.35, up $0.25)

Thoughts:  If you are in this trade, start locking up profits.


Rockwell Automation (ROK, $64.15, up $2.28)

October 65 calls (ROK111022C00065000, $1.30, up $0.65)

November 70 calls (ROK111022C00070000, $1.50, up $0.40)

Thoughts:  We said Rockwell could make a run to $65 and shares traded to a high of $65.38 yesterday.  We are looking for a breakout to $70 if this level is cleared.   


iRobot (IRBT, $29.18, up $0.81)

November 30 calls (IRBT111119C00030000, $1.80, up $0.40)

Thoughts:  We have been following this stock off-and-on and the break above $27 was good to see.  Shares could be setting up for a run past $30.


Tiffany (TIF, $71.34, up $1.48)

October 70 calls (TIF111022C00070000, $3.10, up $0.80)     

November 75 calls (TIF111119C00075000, $3.00, up $0.45) 

Thoughts:  Tiffany touched a high of $73.51 on Wednesday and these options continue to do well.  The October 70’s traded to $4.45 while the November 75’s kissed $3.70.  If you are in this trade start taking profits.  


Vivus (VVUS, $8.37, up $0.06)     

March 10 calls (VVUS120317C00010000, $1.80, up $0.05)

December 10 calls (VVUS111217C00010000, $0.45, flat)

Thoughts:  There was some buying in the December 10’s yesterday as over 300 contracts traded hands.  We may take a position in them this week so stay on the lookout for a possible trade.