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.

2:15pm (EST)

PowerShares QQQ (QQQ, $57.33, down $0.66)

November 58 calls (111119C00058000, $1.55, down $0.15)

Entry Price:  $1.60 (10/19/11)
Exit Target: $2.40
Return:  -3%
Stop Target:  80 cents 

Action:  The 52-week high for the QQQ’s is $59.83 and we are looking for a test up to $60 and a possible breakout.


Qualcomm (QCOM, $53.06, down $1.50)

November 57.50 calls (QCOM111119C00057500, $0.90, down $0.40)

Entry Price:  $0.95 (10/18/11)
Exit Target: $1.50-1.90
Return:  -5%
Stop Target:  None

Action:  Yesterday’s low was $53.08 so if there is no rebound today for Qualcomm we would like to see at least $52.50 hold.  The November option chains have 30 days before they expire and w are expecting a run to $60 once $55 is cleared again.


Potash (POT, $48.47, down $1.19)

November 52.50 calls (POT111119C00052500, $1.00, down $0.40) 

Entry Price:  $1.20 (10/18/11)
Exit Target: $1.80-$2.40
Return:  -17%
Stop Target:  None

Action:  We are looking for a close above $50 and once cleared Potash should run to $55.


SanDisk (SNDK, $45.51, down $1.40)

November 50 calls (SNDK111119C00050000, $1.20, down $0.35)

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

Return:  -8%
Stop Target: $1.05

Action:  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, $70.27, up $0.53)

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

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

Action:  We were looking for a close above $70 today.  The 52-week high is $72 and we are getting close to a breakout.


Seattle Genetics (SGEN, $20.84, up $0.30)

November 17.50 puts (SGEN111119P00017500, $0.55, down $0.10)

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

Return:  -8%
Stop Target: None

Action:  Shares have traded to a low of $20.09 again yesterday and we are looking for a break below $20.  However, if shares trade past $22 we will probably exit the trade.   
 

Rambus (RMBS, $16.67, down $0.15)

November 16 calls (RMBS111119C00016000, $3.90, flat)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+
Return:  63% 
Stop Target:  $2.45

Action:  We are goping to hold this position open through h earnings.  Rambus has traded above $17 today and we think $20 is a possibility on a good earnings report.   


Spreadtrum Communications (SPRD, $22.12, up $0.52)

January 25 calls (SPRD120121C00025000, $2.10, up $0.20)

Entry Price:  $1.50 (9/9/11)
Exit Target: $2.80
Return:  40%
Stop Target:  75 cents, raise to $1.05

Action:  Shares have traded to $22.90 today yesterday and we are looking for a close above $22 today.   
 

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.

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

9:50am (EST) 

NEW TRADE!!!

PowerShares QQQ (QQQ, $57.58, down $0.41)

November 58 calls (111119C00058000, $1.60, down $0.10)

Action:  Use limit order up to $1.65-$1.70 but do not pay over $1.75 to establish positions.  We didn’t get the drop we were hoping for but we don’t mind establishing positions at these levels as we feel the QQQ’s could trade past $60.

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9:00am (EST)

Qualcomm (QCOM, $54.56, up $0.92)

November 57.50 calls (QCOM111119C00057500, $1.30, up $0.30)

Entry Price:  $0.95 (10/18/11)
Exit Target: $1.50-1.90
Return:  37%
Stop Target:  None

Action:  Qualcomm rebounded from a low of $53.08 and nearly hit double nickels on the high.  The calls hit a peak of $1.40 and the November option chains have 30 days before they expire.  We are expecting a run to $60 once $55 is cleared.


Potash (POT, $49.66, up $0.67)

November 52.50 calls (POT111119C00052500, $1.40, up, $0.45)

Entry Price:  $1.20 (10/18/11)
Exit Target: $1.80-$2.40
Return:  17%
Stop Target:  None

Action:  Shares traded to a high of $49.92 and we were looking for a close above $50.  Once cleared, Potash should run to $55.


SanDisk (SNDK, $46.91, up $0.94)

November 50 calls (SNDK111119C00050000, $1.55, up $0.20)

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

Return:  19%
Stop Target: 65 cents, raise to $1.05

Action:  SanDisk traded up to $47.26 which was just under resistance at $48.  If cleared, shares could test new highs north of $50.  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, $69.74, up $0.74) 

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

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

Action:  We were looking for a close above $70 yesterday and shares traded to a high of $70.12 before closing just below this level.  The 52-week high is $72 and we are getting close to a breakout.


Seattle Genetics (SGEN, $20.54, up $0.21)

November 17.50 puts (SGEN111119P00017500, $0.65, down $0.15)

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

Return:  8%
Stop Target: None

Action:  Shares have traded to a low of $20.09 again yesterday and we are looking for a break below $20.  However, if shares trade past $22 we will probably exit the trade.   
 

Rambus (RMBS, $16.82, up $0.66)

November 16 calls (RMBS111119C00016000, $3.90, up $0.50)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+
Return:  63% 
Stop Target:  $2.45

Action:  Rambus kissed a high of $16.87 on Tuesday and was above $17 in after-hours trading last night.  The company reports earnings on Thursday so we would like to close half or all of the trade if the options reach $4.80 today.  There is still a looming legal settlement in play which is why we want to keep this trade open.   


Spreadtrum Communications (SPRD, $21.60, up $0.45)

January 25 calls (SPRD120121C00025000, $1.90, up $0.10)

Entry Price:  $1.50 (9/9/11)
Exit Target: $2.80
Return:  27%
Stop Target:  75 cents, raise to $1.05

Action:  Shares traded to a high of $21.74 yesterday and we are looking for a move past $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.

PowerShares QQQ (QQQ, $57.99, up $0.71)

November 58 calls (111119C00058000, $1.70, up $0.35)

Thoughts:  We may buy theses calls on the dip but we want to see where they open at.  If they open at $1.25, we will try to get them a little cheaper but this will be our target price to buy these calls on the dip.  This is our favorite trade for today and it’s possible we send out a Trade Alert shortly after the open.

***For those of you who have our option trading course and watched last week’s video, we covered this trade to prepare for a possible breakout and some of you have done well getting in early.


Green Mountain Coffee Roasters (GMCR, $82.11, down $0.39)

November 100 calls (GMCR111119C00100000, $2.15, down $0.20)

November 60 puts (GMCR111119P00060000, $2.85, up $0.10)

Thoughts:  Shares have been getting hammered and the selling could be over done or just beginning.  The chart is saying a trip to $75 is in the future, possibly $65, if $80 doesn’t hold.  A bounce back to $88 is possible if current levels hold.

First Solar (FSLR, $55.91, up $2.95)

November 70 calls (FSLR111119C00060000, $1.60, up $0.60)

November 40 puts (FSLR111119P00040000, $1.20, down $0.35)

Thoughts:  On a break above $50 we would use the calls and we would wait for a break below $50.50 before going short.


Intuit (INTU, $52.50, up $0.22)

November 55 calls (INTU111119C00055000, $1.10, down $0.05)

Thoughts:  We still think shares can hit new 52-week highs if the market can hold up.  Watch for now.


Blue Nile (NILE, $43.48, up $2.57)

November 45 calls (NILE111119C00045000, $2.40, up $0.80)

Thoughts:  Blue Nile surged 6% yesterday and these options got a nice pop.


iRobot (IRBT, $29.16, up $0.85)      

November 30 calls (IRBT111119C00030000, $1.65, up $0.25)

Thoughts:  We still like these calls on a break above $30 but we may also look at the November 35’s which are at 45 cents. 


Vivus (VVUS, $8.65, up $0.07)     

March 10 calls (VVUS120317C00010000, $1.90, flat)

December 10 calls (VVUS111217C00010000, $0.45, up $0.05)

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