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.

2:25pm (EST)

Intuit (INTU, $52.14, up $0.96)

November 55 calls (INTU111119C00055000, $1.10, up $0.25)

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

Return:  16%
Stop Target: None

Action:  We like this trade but we may have to move out to the 55’s.  


Infosys Technologies (INFY, $56.73, up $4.07) 

November 60 calls (INFY111119C00060000, $1.10, up $0.50)   

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

Return:  108%
Stop Target: $1.00, lower to 90 cents (HARD STOP)

Action:  We are going to give the Hard Stop a little wiggle room and we are going to lower the stop to 90 cents. 


O’Reilly Automotive (ORLY, $68.57, down $1.08)

November 75 calls (ORLY111119C00075000, $0.55, down $0.10)

Entry Price:  $0.55 (10/10/11)
Exit Target: $1.10
Return:  0% 
Stop Target:  None

Action:  Shares made a run at $70 again before pullin back.  We are expecting a surge to $75-$80 for the stock and the November options have 37 days before they expire which gives us plenty of time to wait for the move.


Potash (POT, $49.48, up $1.44)

November 52.50 calls (POT111119C00052500, $1.60, up $0.35)

Entry Price:  $1.00 (10/6/11)
Exit Target: $2.00
Return:   60% 
Stop Target:  None

Action:  Shares are near their highs for the day and we are expecting a run to $50 this week.             


Seattle Genetics (SGEN, $20.97, down $0.35)

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:  Continue to hold.


Pepsico (PEP, $63.25, up $2.30)

November 65 calls (PEP111119C00065000, $0.85, up $0.50)

Entry Price:  $0.50 (10/5/11)
Exit Target: $1.00

Return:  70%
Stop Target: None

Action:  Close HALF of the trade at current levels.  There is a chance Pepsi can trade up to $65 by mid-November but let’s be safe just in case shares fall back to $60.  

 
Microsoft (MSFT, $27.25, up $0.25)

November 26 calls (MSFT111119C00026000, $1.75, up $0.15)

Entry Price:  $0.90 (10/5/11)
Exit Target: $1.80-$2.00
Return:  94%
Stop Target:  $1.25, raise to $1.30 (HARD STOP)

Action:  Continue to hold.


Rambus (RMBS, $15.85, up $0.44)

November 16 calls (RMBS111119C00016000, $3.00, up $0.30)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+
Return:  25% 
Stop Target:  $2.00

Action:  All signs are pointing to a close above $16 this week.


Spreadtrum Communications (SPRD, $21.36, up $1.49)

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:  These options have 100 days before they expire and our near-term target for the stock is $22.  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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10:40am (EST)

Intuit (INTU, $51.91, up $0.73)

Buy to OPEN November 55 calls (INTU111119C00055000, $0.95, up $0.10)

Action:  Use limit prices up to $1.00-$1.05 but do not pay more than $1.10 to establish positions.  We are expecting shares to hit new 52-week highs and blue-sky territory over the next few weeks.   

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10:05am (EST)

Infosys Technologies (INFY, $57.18, up $4.52)   

November 60 calls (INFY111119C00060000, $1.40, up $0.75)   

Entry Price:  $0.60 (10/11/11)
Exit Target: $1.00

Return:  133%
Stop Target: $1.00 (HARD STOP)

Action:  Close HALF of the trade at current levels.  Infosys reported a sweet quarter and shares are up 8%.  Let’s ring the register on HALF of the trade and we will keep the other half open with a tight stop.  

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9:00am (EST)

Infosys Technologies (INFY, $52.66, down $1.17)

November 60 calls (INFY111119C00060000, $0.65, down $0.15)

Entry Price:  $0.60 (10/11/11)
Exit Target: $1.00

Return:  8%
Stop Target: None

Action:  We have an aggressive target of $65 for Infosys which would make these options worth at least $5 if shares are there by mid-November.  Our breakeven point is $60.60 if we have to wait this trade out for a month.  


O’Reilly Automotive (ORLY, $69.65, up $0.08)

November 75 calls (ORLY111119C00075000, $0.65, down $0.10)

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

Action:  Shares made a run at $70 late in the day as they traded to a high of $69.82.  We are expecting a surge to $75-$80 for the stock and the November options have 37 days before they expire which gives us plenty of time to wait for the move.


Potash (POT, $48.04, up $1.28)

November 52.50 calls (POT111119C00052500, $1.25, up $0.30)

Entry Price:  $1.00 (10/6/11)
Exit Target: $2.00
Return:   25% 
Stop Target:  None

Action:  We are expecting a run to $50 this week.             


Seattle Genetics (SGEN, $21.32, up $0.02)

November 17.50 puts (SGEN111119P00017500, $0.75, down $0.10)

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

Return:  25%
Stop Target: None

Action:  Continue to hold.


Pepsico (PEP, $60.95, down $0.92)

November 65 calls (PEP111119C00065000, $0.45, down $0.20)

Entry Price:  $0.50 (10/5/11)
Exit Target: $1.00

Return:  -10%
Stop Target: None

Action:  Pepsi beat by a penny and shares are above $62 in pre-market action. 

 
 

Microsoft (MSFT, $27.00, up $0.06)

November 26 calls (MSFT111119C00026000, $1.60, up $0.05)

Entry Price:  $0.90 (10/5/11)
Exit Target: $1.80-$2.00
Return:  78%
Stop Target:  $1.25, raise to $1.30 (HARD STOP)

Action:  Microsoft hit $27 yesterday which was what we wanted to see.  We are getting close to a double but if shares pull back we will close the trade.  We have raised the Hard Stop to $1.30.


Rambus (RMBS, $15.41, down $0.05)

November 16 calls (RMBS111119C00016000, $2.70, down $0.15)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+
Return:  13% 
Stop Target:  $2.00

Action:  Shares showed strength early in Tuesday session as they traded to a high of $15.60 before finishing the day slightly lower.  All signs are pointing to a close above $16 this week.


Spreadtrum Communications (SPRD, $19.87, up $0.61)

January 25 calls (SPRD120121C00025000, $1.60, up $0.20)

Entry Price:  $1.50 (9/9/11)
Exit Target: $2.80
Return:  7%
Stop Target:  75 cents

Action:  Spreadtrum traded to a high of $20.63 before finishing just below the $20 level.  These options have 100 days before they expire and our near-term target for the stock is $22.  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.

First Solar (FSLR, $55.91, down $3.87)

November 70 calls (FSLR111119C00060000, $1.90, down $0.85)

November 40 puts (FSLR111119P00040000, $1.40, up $0.35)

Thoughts:  We tried going short on First Solar back in August when shares were at $90 and we got too cute by playing the August 80 WEEKLY put options.  We should have played the October chain because we saw a big breakdown coming but we got greedy and lost 79%.  As you can see, that is  35 points ago.  These options could be used for a strangle option trade but the stock could get a bounce after hitting a 52-week low of $54.92 yesterday.  However, the trend is still lower which could make both sides of this trade profitable.


SanDisk (SNDK, $44.46, down $0.46)

October 45 (WEEKLY) calls (SNDK111014C00045000, $0.60, down $0.20)

November 50 calls (SNDK111119C00050000, $1.00, down $0.15)

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


Blue Nile (NILE, $41.73, up $2.86)

October 40 calls (NILE111022C00040000, $2.60, up $1.50

November 45 calls (NILE111119C00045000, $2.10, up $0.85)

Thoughts:  We said Blue Nile was poised to break $40 and yesterday’s 7% jump got shares there in a hurry.  We were trying to get into the November 45’s for under $1 but shares didn’t fall enough at the open to allow us to get in.


Rockwell Automation (ROK, $61.87, up $0.28)

October 65 calls (ROK111022C00065000, $0.65, flat)

November 70 calls (ROK111022C00070000, $1.10, flat)

Thoughts:  Rockwell could make a run to $65 and we are looking for a breakout to $70 if this level is cleared.   


iRobot (IRBT, $28.37, up $0.32)

November 30 calls (IRBT111119C00030000, $1.40, up $0.10)

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, $69.76, down $0.17)

October 70 calls (TIF111022C00070000, $2.30, down $0.10)    

November 75 calls (TIF111119C00075000, $2.55, down $0.30)

Thoughts:  These options gapped higher on Monday and held up well on Tuesday.    


Vivus (VVUS, $8.31, up $0.05)     

March 10 calls (VVUS120317C00010000, $1.75, flat)

December 10 calls (VVUS111217C00010000, $0.45, flat)

Thoughts:  We like the December calls and may start a small position if $8 holds for the next day or two.


Intuit (INTU, $51.18, up $0.91)

November 52.50 calls (INTU111119C00052500, $1.75, up $0.30)

Thoughts:  We like this trade but we may have to move out to the 55’s.