November 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 “Profit 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.

2:05pm (EST)

PowerShares QQQ (QQQ, $56.76, down $1.19)

November 58 calls (QQQ111119C00058000, $0.90, down $0.35) 

Entry Price:  $0.90 (11/1/11)
Exit Target: $1.35-$1.80
Return:  0%
Stop Target:  None

Action:  We normally target triple-digit returns for all of our trades but our expectations for this one is are a quick 50% hit-and-run return.  Set limit orders to sell HALF of the calls at $1.35 now which will automatically start to lock in profits for us.


S&P 500 Spiders (SPY, $123.04, down $2.46)

December 128 calls (SPY111217C00128000, $2.15, down $0.80)

Entry Price:  $2.15 (11/1/11)
Exit Target: $3.25
Return:  0%
Stop Target:  None

Action:  We suggested smaller positions with these options due to the higher premiums and we are looking to make this a quick trade as well.


Las Vegas Sands (LVS, $47.49, up $0.54)

December 52.50 calls (LVS111217C00052500, $1.35, up $0.10)

Entry Price:  $1.25 (11/1/11)
Exit Target: $2.50
Return:  8%
Stop Target:  None

Action:  Shares are on the verge of a huge breakout if they can get past $50.  


Skyworks Solutions (SWKS, $19.22, down $0.59)

January 25 calls 2012 (SWKS120121C00025000, $0.80, down $0.10)

Entry Price:  $0.80 (10/31/11)
Exit Target: $1.60
Return:  0%
Stop Target:  None

Action:  Skyworks announces earnings this Thursday and we think they could surprise to the upside.  Estimates are for 53 cents a share on $400 million in sales.  The high estimate by the 17 analysts who follow the stock is 54 cents so there is a lot of room for shares to be “upgraded” if the company can come in with a number north of 55 cents.   

We went with the January options to allow some momentum to build on a better-than-expected earnings beat but there is risk to the mid-teens if Skyworks comes up short.


Alcoa (AA, $10.52, down $0.24)

November 12 calls (AA111119C00012000, $0.10, down $0.04)

Entry Price:  $0.18 (10/28/11)
Exit Target: $0.36 (closed half at $0.32 on 10/28/11)
Return:  17%
Stop Target:  None


December 13 calls (AA111217C00013000, $0.11, down $0.02)

Entry Price:  $0.15 (10/28/11)
Exit Target: $0.36
Return:  -27%
Stop Target:  None

Action:  We plan on holding the November calls until Friday in hopes of a rebound but may exit the trade before then just to protect profits.  We plan on keeping the December calls open through Thanksgiving.


Vivus (VVUS, $9.44, up $0.02)     

December 10 calls (VVUS111217C00010000, $0.65, flat)

Entry Price:  $0.50 (10/28/11)
Exit Target: $1.00
Return:  30%
Stop Target:  None

March 12 calls 2012 (VVUS120317C00012000, $1.70, flat)

Entry Price:  $1.55 (10/28/11)
Exit Target: $3.10
Return:  10%
Stop Target:  75 cents

Action:  Vivus continued its march towards double-digits yesterday and continues to gather momentum.  If shares break $10, expect the talking heads and Wall Street to take notice.


Taiwan Semiconductor Manufacturing (TSM, $12.43, down $0.19)

December 12.50 calls (TSM111217C00012500, $0.60, down $0.05)

Entry Price:  $0.50 (10/26/11)
Exit Target: $1.00
Return:  20%
Stop Target:  50 cents

Action:  Continue to hold.


Pepsico (PEP, $62.54, down $0.41)

January 65 calls 2012 (PEP120121C00065000, $0.90, down $0.05)

Entry Price:  $0.70 (10/24/11)
Exit Target: $1.40
Return:  29%
Stop Target:  None 

Action:  Continue to hold. 


Qualcomm (QCOM, $50.44, down $1.16)

November 57.50 calls (QCOM111119C00057500, $0.20, down $0.10)

Entry Price:  $0.95 (10/18/11)
Exit Target: $1.50-1.90
Return:  -79%
Stop Target:  None

Action:  We will keep coverage of this trade through Wednesday which is when we should know if these calls are going to bounce back.  The company will announce earnings before the bell and we are looking for a break above $55 on better-than-expected results.


Rambus (RMBS, $17.28, down $0.42)

November 16 calls (RMBS111119C00016000, $2.65, down $0.30)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+ (closed half at $3.05 on 10/20/11)
Return:  19% 
Stop Target:  $2.45

Action:  These options expire in a little over 2 weeks so we will need Rambus to make a move this week or we will likely “roll over” the position into some December or January calls.           


Spreadtrum Communications (SPRD, $26.73, up $0.16)     

January 25 calls 2012 (SPRD120121C00025000, $3.80, flat)

Entry Price:  $1.50 (9/9/11)
Exit Target: $2.80 (closed half at $2.90 on 10/27/11)
Return:  123%
Stop Target:  $2.50, raise to $2.95 (HARD STOP)

Action:  Shares traded to another all-time high of $26.74 yesterday.  Earnings are due out on November 9.  


Other 2011 Portfolio OPEN positions (4):  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)

Seattle Genetics November 17.50 puts (from October 2011)

Potash November 52.50 calls (from October 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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10:30pm (EST)

NEW TRADES!!!

PowerShares QQQ (QQQ, $56.71, down $1.24)

Buy to OPEN November 58 calls (QQQ111119C00058000, $0.90, down $0.35)

Action:  Use limit prices up to $1.00 but do not pay over $1.05-$1.10 to establish positions.  We are looking for  a bounce and this could be a quick trade.


S&P 500 Spiders (SPY, $122.90, down $2.60)

Buy to OPEN December 128 calls (SPY111217C00128000, $2.15, down $0.80)

Action:  We are going to try and buy this dip with a small position in the S&P Spiders as well.  We are going to have a tight stop and we may be out of this trade quickly if we get a pop the rest of the week.


Las Vegas Sands (LVS, $46.95, flat)

Buy to OPEN December 52.50 calls (LVS111217C00052500, $1.25, flat)

Action:  Use limit orders up to $1.30-$1.35 but do not pay over $1.40 to establish positions.   

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9:10am (EST)

Skyworks Solutions (SWKS, $19.81, down $0.48)

January 25 calls 2012 (SWKS120121C00025000, $0.90, down $0.05)

Entry Price:  $0.80 (10/31/11)
Exit Target: $1.60
Return:  13%
Stop Target:  None

Action:  Skyworks announces earnings this Thursday and we think they could surprise to the upside.  Estimates are for 53 cents a share on $400 million in sales.  The high estimate by the 17 analysts who follow the stock is 54 cents so there is a lot of room for shares to be “upgraded” if the company can come in with a number north of 55 cents.   

We went with the January options to allow some momentum to build on a better-than-expected earnings beat but there is risk to the mid-teens if Skyworks comes up short.


Alcoa (AA, $10.76, down $0.81)

November 12 calls (AA111119C00012000, $0.14, down $0.16)

Entry Price:  $0.18 (10/28/11)
Exit Target: $0.36 (closed half at $0.32 on 10/28/11)
Return:  28%
Stop Target:  None

December 13 calls (AA111217C00013000, $0.13, down $0.10)

Entry Price:  $0.15 (10/28/11)
Exit Target: $0.36
Return:  -13%
Stop Target:  None

Action:  We were hoping for some follow-through with Alcoa so we could have closed the November calls yesterday for a quick 100% return to finance the December calls as a “free” trade but shares slipped back below $11.  We plan on holding the November calls until Friday in hopes of a rebound but may exit the trade before then just to protect profits.  We plan on keeping the December call open through Thanksgiving.


Vivus (VVUS, $9.42, up $0.22)     

December 10 calls (VVUS111217C00010000, $0.65, up $0.10)

Entry Price:  $0.50 (10/28/11)
Exit Target: $1.00
Return:  30%
Stop Target:  None

March 12 calls 2012 (VVUS120317C00012000, $1.70, up $0.05)

Entry Price:  $1.55 (10/28/11)
Exit Target: $3.10
Return:  10%
Stop Target:  75 cents

Action:  Vivus continued its march towards double-digits yesterday and continues to gather momentum.  If shares break $10, expect the talking heads and Wall Street to take notice.


Taiwan Semiconductor Manufacturing (TSM, $12.62, down $0.12)

December 12.50 calls (TSM111217C00012500, $0.65, down $0.10)

Entry Price:  $0.50 (10/26/11)
Exit Target: $1.00
Return:  30%
Stop Target:  50 cents

Action:  We wanted to see a close above $12.50 and that we got.  We also plan on holding this trade open for several weeks so don’t let the volatility get to you.


Pepsico (PEP, $62.95, down $0.25)

January 65 calls 2012 (PEP120121C00065000, $0.95, flat)

Entry Price:  $0.70 (10/24/11)
Exit Target: $1.40
Return:  36%
Stop Target:  None 

Action:  Shares made a run up to resistance at $63.50 and kissed a high of $63.58 before fading.  The calls traded up to $1.08 which represents a 50% profit so we need to keep this in mind if they get there today and maybe consider closing half if shares struggle at resistance again. 


Qualcomm (QCOM, $51.60, down $1.63)

November 57.50 calls (QCOM111119C00057500, $0.30, down $0.20)

Entry Price:  $0.95 (10/18/11)
Exit Target: $1.50-1.90
Return:  -68%
Stop Target:  None

Action:  We will keep coverage of this trade through Wednesday which is when we should know if these calls are going to bounce back.  The company will announce earnings before the bell and we are looking for a break above $55 on better-than-expected results.


Rambus (RMBS, $17.70, down $0.16)

November 16 calls (RMBS111119C00016000, $2.95, down $0.20)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+ (closed half at $3.05 on 10/20/11)
Return:  25% 
Stop Target:  $2.45

Action:  These options expire in a little over 2 weeks so we will need Rambus to make a move this week or we will likely “roll over” the position into some December or January calls.           


Spreadtrum Communications (SPRD, $26.57, up $0.69)     

January 25 calls 2012 (SPRD120121C00025000, $3.80, up $0.40)

Entry Price:  $1.50 (9/9/11)
Exit Target: $2.80 (closed half at $2.90 on 10/27/11)
Return:  123%
Stop Target:  $2.50, raise to $2.95 (HARD STOP)

Action:  Shares traded to another all-time high of $26.74 yesterday.  Earnings are due out on November 9.  


Other 2011 Portfolio OPEN positions (4):  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)

Seattle Genetics November 17.50 puts (from October 2011)

Potash November 52.50 calls (from October 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.

MGM Resorts (MGM, $11.52, down $0.50)

December 12 calls (MGM111217C00012000, $0.85, down $0.25)

Thoughts:  We are now following the December 12’s and we like these calls a lot.   


Newpark Resources (NR, $8.93, down $0.30)

December 10 call (NR111217C00010000, $0.40, down $0.05)

March 10 calls (NR120317C00010000, $0.80, down $0.25)

Thoughts:  A run to $15 is possible over the next 3-6 months.  


U.S. Bancorp (USB, $25.59, down $0.44)

December 26 calls (USB111217C00026000, $0.95, down $0.15)

Thoughts:  Support at $25.50 held yesterday and we are looking for a run to $27+.


Las Vegas Sands (LVS, $46.95, down $1.18)

December 55 calls (LVS111217C00055000, $0.65, down $0.10)

January 55 calls (LVS120121C00055000, $1.35, down $0.15)

Thoughts:  Shares appear ready to challenge $50 and there is a chance they could soar to $60 on a breakout.   


SkullCandy (SKUL, $15.75, down $1.71)

December 17.50 calls (SKUL111217C00017500, $0.70, down $0.60)

Thoughts:  Possible short-squeeze coming if shares can clear $18.


SanDisk (SNDK, $50.67, down $2.71)

December 60 calls (SNDK111119C00052500, $0.45, down $0.50)

January 60 calls 2012 (SNDK120121C00060000, $1.00, down $0.60)

Thoughts:  Shares were downgraded yesterday which didn’t make sense but may have given us a good entry point.