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.

12:40pm (EST)

Molex (MOLX, $25.80, up $1.31)

November 25 calls (MOLX111119C00025000, $1.50, up $0.40)

Entry Price:  $0.80 (10/26/11)
Exit Target: $1.60
Return:  88%
Stop Target:  $1.00

Action:  Molex is getting a nice pop today so we will ride this trade for another day and see where we are at tomorrow.  We have set a stop TARGET of $1.00 in case shares retreat but please realize we use HARD STOPS if we want you to take action.


Taiwan Semiconductor Manufacturing (TSM, $12.91, up $0.66)

December 12.50 calls (TSM111217C00012500, $0.75, up $0.25)

Entry Price:  $0.50 (10/26/11)
Exit Target: $1.00
Return:  70%
Stop Target:  None 

Action:  The 52-week high is $14 which we expect shares to challenge.  We went with the December options to allow more time for the trade to play out but it has gotten off to an incredible start.


Pepsico (PEP, $62.70, up $0.69)

January 65 calls (PEP120121C00065000, $0.80, up $0.05)

Entry Price:  $0.70 (10/24/11)
Exit Target: $2.40
Return:  14%
Stop Target:  None 

Action:  We would like to see a close above $63 today.           


Qualcomm (QCOM, $53.43, up $1.83)

November 57.50 calls (QCOM111119C00057500, $0.55, up $0.20)

Entry Price:  $0.95 (10/18/11)
Exit Target: $1.50-1.90
Return:  -42%
Stop Target:  None

Action:  We would like to see a close above $63.50 today.  The company will report earnings on November 2 which could be the catalyst to get us to $60 on a blowout quarter.


Potash (POT, $50.53, up $1.00)

November 52.50 calls (POT111119C00052500, $1.05, up $0.10)

Entry Price:  $1.20 (10/18/11)
Exit Target: $1.80-$2.40
Return:  -13%
Stop Target:  None

Action:  Continue to hold.      


Seattle Genetics (SGEN, $21.96, up $0.88)

November 17.50 puts (SGEN111119P00017500, $0.25, down $0.10)

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

Return:  -58%
Stop Target: None

Action:  Earnings are next week so we will wait and see if that will be the catalyst to take shares below $20 and into the mid-teens.   


Rambus (RMBS, $17.85, up $0.64)

November 16 calls (RMBS111119C00016000, $3.35, up $0.30)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+ (closed half at $3.05 on 10/20/11)
Return:  33% 
Stop Target:  $2.45

Action:  We are keeping this trade open as we continue to wait for the company’s current litigation issues to play out.  A favorable ruling this week or next could easily push the stock past $20 which means the options will trade at $4 or $5.         


Spreadtrum Communications (SPRD, $24.21, down $1.11)      

January 25 calls (SPRD120121C00025000, $2.50, down $0.60)

Entry Price:  $1.50 (9/9/11)
Exit Target: $2.80 (closed half at $2.90 on 10/27/11)
Return:  80%
Stop Target:  $1.55, raise to $2

Action:  We closed half of the trade to lock-in some profits but we didn’t like the selloff after shares hit another 52-week high.  However, prior resistance at $22 should act as support but we would like to see $24 hold today.


Other 2011 Portfolio OPEN positions (2):  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.

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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10:50am (EST)

PowerShares QQQ (QQQ, $58.35, up $1.08)

November 58 calls (111119C00058000, $1.65, up $0.50)

Entry Price:  $1.60 (10/19/11)
Exit Target: $2.40
Return:  3%
Stop Target:  $1.00 

Action:  Let’s take a small profit and look to get back in some December calls or puts once today’s dust settles.  Close the trade at current levels.   


Spreadtrum Communications (SPRD, $24.53, down $0.79)      

January 25 calls (SPRD120121C00025000, $2.90, down $0.25)

Entry Price:  $1.50 (9/9/11)
Exit Target: $2.80
Return:  93%
Stop Target:  $2 (HARD STOP)

Action:  Close HALF of the trade at current levels.

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9:45am (EST)

Cabot Oil & Gas (COG, $74.06, up $7.22)

November 80 calls (COG111119C00080000, $2.00, up $1.25)

Entry Price:  $1.25 (10/24/11)
Exit Target: $2.50
Return:  60%
Stop Target:  60 cents

Action:  Let’s close this trade at current prices as we got a little lucky considering the company missed estimates by a penny.


O’Reilly Automotive (ORLY, $75.44, up $5.24)

November 75 calls (ORLY111119C00075000, $1.60, up $1.20)

Entry Price:  $0.55 (10/10/11)
Exit Target: $1.10
Return:  191% 
Stop Target:  None

Action:  Let’s lock in profits on this huge move as well. 

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9:00am (EST)

Molex (MOLX, $24.49, up $1.19)

November 25 calls (MOLX111119C00025000, $0.90, up $0.30)

Entry Price:  $0.80 (10/26/11)
Exit Target: $1.60
Return:  13%
Stop Target:  None 

Action:  The 52-week high is $28.51 and we are expecting a run up to new highs over the next 3 weeks.  However, since these are November options, we want to close HALF of the trade into strength if shares get a nice pop this morning.  If we get to $1.20-$1.30, we may send out a Trade Alert.


Taiwan Semiconductor Manufacturing (TSM, $12.25, up $0.06)

December 12.50 calls (TSM111217C00012500, $0.50, flat)

Entry Price:  $0.50 (10/26/11)
Exit Target: $1.00
Return:  0%
Stop Target:  None 

Action:  The 52-week high is $14 which we expect shares to challenge.  We went with the December options to allow more time for the trade to play out.


Pepsico (PEP, $62.01, up $0.19)

January 65 calls (PEP120121C00065000, $0.75, flat)

Entry Price:  $0.70 (10/24/11)
Exit Target: $2.40
Return:  7%
Stop Target:  None 

Action:  Pepsi doesn’t always trade in tandem with the market but we are looking for a move past $63 this morning.         


Cabot Oil & Gas (COG, $66.84, up $0.72)

November 80 calls (COG111119C00080000, $0.75, up $0.05)

Entry Price:  $1.25 (10/24/11)
Exit Target: $2.50
Return:  -40%
Stop Target:  60 cents

Action:  Cabot missed earnings expectations by a penny so we will be at the mercy of the market with this one.        


Spreadtrum Communications (SPRD, $25.32, up $1.82)

January 25 calls (SPRD120121C00025000, $3.10, up $0.60)

Entry Price:  $1.50 (9/9/11)
Exit Target: $2.80
Return:  107%
Stop Target:  $1.55, raise to $2

Action:  Shares are at new 52-week highs and we continue to love this position.


PowerShares QQQ (QQQ, $57.27, down $0.07)

November 58 calls (111119C00058000, $1.15, down $0.05)

Entry Price:  $1.60 (10/19/11)
Exit Target: $2.40
Return:  -28%
Stop Target:  $1.00 

Action:  We may trade out of this one to take some risk off the table if we can get back to even or even squeeze a small profit out of the position.   We can continue to play the QQQ’s up (and down) but we may move out to the December chain.


Qualcomm (QCOM, $51.60, down $0.72)

November 57.50 calls (QCOM111119C00057500, $0.35, down $0.05)

Entry Price:  $0.95 (10/18/11)
Exit Target: $1.50-1.90
Return:  -63%
Stop Target:  None

Action:  Support is at $50 and we are still holding out for a run to $60.  The company will report earnings on November 2 which could be the catalyst to get us there on a blowout quarter.


Potash (POT, $49.53, up $1.04)

November 52.50 calls (POT111119C00052500, $0.95, up $0.20)

Entry Price:  $1.20 (10/18/11)
Exit Target: $1.80-$2.40
Return:  -21%
Stop Target:  None

Action:  Potash made a nice rebound off the lows and traded to a high of $49.77 yesterday.  We would like to see a close above $50 today and shares got an upgrade yesterday.   


O’Reilly Automotive (ORLY, $70.20, down $0.71)

November 75 calls (ORLY111119C00075000, $0.45, down $0.15)

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

Action:  Bingo.  O’Reilly beat estimates and shares were up $3, to $73, in after-hours trading last night.  If the gains hold, shares will be at a new 52-week high when we open and these options should double.  We would like to close HALF of the trade into strength so set limit prices at $1.00-$1.10 as an exit this morning.


Seattle Genetics (SGEN, $21.08, up $0.43)

November 17.50 puts (SGEN111119P00017500, $0.35, down $0.05)

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

Return:  -42%
Stop Target: None

Action:  Earnings are next week so we will wait and see if that will be the catalyst to take shares below $20 and into the mid-teens.   


Rambus (RMBS, $17.21, up $0.34)

November 16 calls (RMBS111119C00016000, $3.05, up $0.20)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+ (closed half at $3.05 on 10/20/11)
Return:  27% 
Stop Target:  $2.45

Action:  We are keeping this trade open as we continue to wait for the company’s current litigation issues to play out.  A favorable ruling this week or next could easily push the stock past $20 which means the options will trade at $4 or $5.         


Other 2011 Portfolio OPEN positions (2):  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.

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.


U.S. Bancorp (USB, $25.49, up $0.65)

December 26 calls (USB111217C00026000, $1.10, up $0.20)

Thoughts:  The 52-week high is $29 and we believe a run past $30 could be in the mix if the Financial stocks can stay strong.


Las Vegas Sands (LVS, $43.47, up $1.42)

October 40 puts (LVS111028P00040000, $0.40, down $0.32)

November 45 calls (LVS111119C00045000, $1.85, up $0.55)

Thoughts:  Watch for now.   


SkullCandy (SKUL, $16.46, up $0.67)

December 17.50 calls (SKUL111217C00017500, $0.80, up $0.10)

Thoughts:  Possible short-squeeze coming.


NetApp (NTAP, $38.58, up $0.41)

November 35 puts (NTAP111119P00035000, $0.65, down $0.10)

Thoughts:  Continue to watch.  


Apollo Group (APOL, $47.59, up $0.13)

November 45 puts (APOL111119P00045000, $1.00, flat)

Thoughts:  Continue to watch.        


SanDisk (SNDK, $50.31, up $0.47)

November 52.50 calls (SNDK111119C00052500, $1.25, up $0.20)

Action:  We almost added this trade with yesterday’s 2 new ones but decided to wait as Tech was lagging.  We may still add these options but the portfolio is getting pretty full.   


Tempur Pedic International (TPX, $67.94, up $0.54)

November 75 calls (TPX111119C00075000, $0.55, down $0.13)

December 80 calls (TPX111217C00080000, $0.80, down $0.20)

Thoughts:  We have a $80 price target for the stock but these options are thinly traded.


iRobot (IRBT, $33.24, up $4.94)

November 30 calls (IRBT111119C00030000, $4.00, up $2.70)

Thoughts:  We were hoping iRobot reported after the bell on Wednesday but as you can see, they announced yesterday morning and Wall Street loved their numbers.  The calls easily doubled as shares jumped over 17%.  We will keep an eye on the stock and maybe look at some other options should iRobot continue higher but we missed a good one.


Vivus (VVUS, $8.90, up $0.35)     

March 10 calls (VVUS120317C00010000, $2.05, up $0.15)

December 10 calls (VVUS111217C00010000, $0.340, up $0.05)

Thoughts:  We have this feeling shares are going to be at double-digits by Christmas, if not sooner.