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)

Qualcomm (QCOM, $53.85, up $0.21)

November 57.50 calls (QCOM111119C00057500, $1.10, up $0.10)

Entry Price:  $0.95 (10/18/11)
Exit Target: $1.50-1.90
Return:  11%
Stop Target:  None

Action:  The November options have 31 days before they expire and we are expecting a run to $60 once $55 is cleared.


Potash (POT, $48.75, down $0.24)

November 52.50 calls (POT111119C00052500, $1.15, down, $0.10)  

Entry Price:  $1.20 (10/18/11)
Exit Target: $1.80-$2.40
Return:  -4%
Stop Target:  None

Action:  We would like to see a close above $50 today but if not we want $47.50 to hold.


SanDisk (SNDK, $46.40, up $0.43)

November 50 calls (SNDK111119C00050000, $1.45, up $0.05)

Entry Price:  $1.30 (10/13/11)
Exit Target: $2.60

Return:  12%
Stop Target: 65 cents

Action:  We plan to stay in this trade as long as $44 holds.  There is short-term resistance at $48 and the 52-week high for SanDisk is $53.61.  The company announces earnings on Thursday.  We are looking for a beat-and-raise on their conference call which could lead to a breakout and blue-sky territory.


O’Reilly Automotive (ORLY, $69.30, up $0.30)

November 75 calls (ORLY111119C00075000, $0.45, flat)

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

Action:  We are looking for a close above $70 today.


Seattle Genetics (SGEN, $20.52, up $0.19)

November 17.50 puts (SGEN111119P00017500, $0.75, down $0.05)

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

Return:  25%
Stop Target: None

Action:  Shares have traded to a low of $20.09 again today and we are looking for a break below $20 to really get this trade moving.   
 

Rambus (RMBS, $16.54, up $0.38)

November 16 calls (RMBS111119C00016000, $3.70, up $0.30)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+
Return:  54% 
Stop Target:  $2.45

Action:  We raised the stop on Rambus but it is not a hard stop.  We still feel shares are going to $20 but we want to protect profits if shares slip below $15.  The company reports earnings on Thursday so we will have to see where we are at by then and decide if we need to close half or all of the trade.  There is still a looming legal settlement in play which is why we want to keep this trade open.   


Spreadtrum Communications (SPRD, $21.38, up $0.23)

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:  We would like to see shares close above $22 which represents a possible breakout and blue-sky territory.
 

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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11:00am (EST)

Qualcomm (QCOM, $53.40, down $0.24)

Buy to OPEN November 57.50 calls (QCOM111119C00057500, $0.95, down $0.05)

Action:  Use limit order up to $1.05 but do not pay more than $1.10 to establish positions.


Potash (POT, $49.02, up $0.03)

Buy to OPEN November 52.50 calls (POT111119C00052500, $1.20, down, $0.05)

Action:  Use limit prices up to $1.30 but do not pay over $1.35 to establish positions.

**********************************

9:15am (EST)

Special Note:  The S&P could dip to 1,175 and Tech 2,550-2,525 so we need to see if these levels hold before establishing new call positions.  If support fails, we can start looking at put options.  We don’t need to rush things and we still have a few open positions that will keep us in the action.  If support breaks, we will list some put options for the indexes for some quick profits, as well as some sticks that could fold like a cheap lawn chair.

CURRENT TRADES 

SanDisk (SNDK, $45.97, down $0.82)

November 50 calls (SNDK111119C00050000, $1.40, down $0.10)

Entry Price:  $1.30 (10/13/11)
Exit Target: $2.60

Return:  8%
Stop Target: 65 cents

Action:  We plan to stay in this trade as long as $44 holds.  There is short-term resistance at $48 and the 52-week high for SanDisk is $53.61.  The company announces earnings on Thursday.  We are looking for a beat-and-raise on their conference call which could lead to a breakout and blue-sky territory.


O’Reilly Automotive (ORLY, $69.00, down $0.82)

November 75 calls (ORLY111119C00075000, $0.45, down $0.10)

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

Action:  Shares traded above $70 and we decided to keep this position open because the options are a cheap “out-of-the-money” play that has the potential to double.  The company reports earnings next Wednesday.


Seattle Genetics (SGEN, $20.33, down $0.54)

November 17.50 puts (SGEN111119P00017500, $0.80, up $0.10)

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

Return:  33%
Stop Target: None

Action:  Shares traded to a low of $20.09 yesterday and we are looking for a break below $20 to really get this trade moving.  For new subscribers, wait for a break under $20 for a quick trade but we would not pay more than $1 to establish positions.


Rambus (RMBS, $16.16, down $0.45)

November 16 calls (RMBS111119C00016000, $3.40, down $0.40)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+
Return:  42% 
Stop Target:  $2.00, raise to $2.45

Action:  We raised the stop on Rambus but it is not a hard stop.  We still feel shares are going to $20 but we want to protect profits if shares slip below $15.  The company reports earnings on Thursday so we will have to see where we are at by then and decide if we need to close half or all of the trade.  There is still a looming legal settlement in play which is why we want to keep this trade open.   


Spreadtrum Communications (SPRD, $21.15, down $0.46)

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:  These options have 3 months before they expire and we plan to ride the storm out – good, bad, or ugly. 


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.


Qualcomm (QCOM, $53.64, down $1.34)

November 57.50 calls (QCOM111119C00057500, $1.00, down $0.45)

Thoughts:  If shares can hold up today, we may take a shot on the calls for a quick trade.  Wait for a break above $55.


Potash (POT, $48.99, down $1.71)

November 52.50 calls (POT111119C00052500, $1.25, down, $0.60)

Thoughts:  We didn’t want to exit this trade yesterday but we needed to protect profits after having been in the trade for 11 days.  If we can get these calls for $1.00 today and shares hold $47.50, we might swing the bat again.  If there is no pullback and Potash breaks $50, we may add these call options again.


First Solar (FSLR, $52.96, down $3.27)

November 70 calls (FSLR111119C00060000, $1.00, down $0.50)

November 40 puts (FSLR111119P00040000, $1.55, up $0.40)

Thoughts:  We profiled this trade as a straddle trade because while we think a bounce could come, shares continue to freefall.  First Solar hit a new 52-week low of $52.32 on Monday and we said we didn’t trust this stock.  If shares move above $60, the November 70’s could be used on a bounce but it ain’t looking good.


Intuit (INTU, $52.28, down $0.73)

November 55 calls (INTU111119C00055000, $1.15, down $0.10)

Thoughts:  We were only in this trade for 5 days and we locked in profits on yesterday’s dip.  However, we still think shares can hit new 52-week highs if the market can hold support.  Watch for now.


Blue Nile (NILE, $40.91, down $0.33)

November 45 calls (NILE111119C00045000, $1.60, down $0.20)

Thoughts:  Blue Nile held up well on a down day.  Support is at $37 should shares slip below $40 and if they do, we will list some put options to play.


iRobot (IRBT, $28.31, down $1.29)      

November 30 calls (IRBT111119C00030000, $1.40, down $0.30)

Thoughts:  Shares made a nice break out of the trading range when $28 was cleared and this level held into yesterday’s close.  We still believe if the $30 level is busted shares could run to $34.          


Vivus (VVUS, $8.58, flat)     

March 10 calls (VVUS120317C00010000, $1.90, flat)

December 10 calls (VVUS111217C00010000, $0.40, flat)

Thoughts:  Resistance is at $9 and we would play either option on a breakout.