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.

1:45pm (EST)

Special Note:  We wanted to make sure that everyone got into the December 20 calls today.  We listed the wrong option symbol in our midday update and had the 18’s.

Rambus (RMBS, $17.51, up $0.34)

December 20 calls (RMBS111217C00020000, $1.80, up $0.10)

Entry Price:  $1.70 (11/2/11)
Exit Target: $3.40
Return:  6% 
Stop Target:  $2.45

Action:  We feel Rambus is going to make a pop over $20 and could run to $30 on a favorable ruling in their ongoing litigation case.  

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12:55pm (EST)

PowerShares QQQ (QQQ, $56.44, down $1.51)

November 58 calls (QQQ111119C00058000, $0.95, down $0.10)

Entry Price:  $0.90 (11/1/11)
Exit Target: $1.35-$1.80
Return:  6%
Stop Target:  None

Action:  We would like to see the Q’s close above $57.50 today.  We normally target triple-digit returns for all of our trades but our expectations for this trade 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, $123.83, up $1.83)

December 128 calls (SPY111217C00128000, $2.55, up $0.30)

Entry Price:  $2.15 (11/1/11)
Exit Target: $3.25
Return:  19%
Stop Target:  $1.00

Action:  Continue to hold.


Las Vegas Sands (LVS, $48.35, up $1.20)

December 52.50 calls (LVS111217C00052500, $1.60, up $0.20)

Entry Price:  $1.25 (11/1/11)
Exit Target: $2.50
Return:  28%
Stop Target:  None

Action:  Shares are on the verge of a huge breakout if they can get past $50 and LVS performed well in yesterday’s carnage.     


Skyworks Solutions (SWKS, $19.07, down $0.04)

January 25 calls 2012 (SWKS120121C00025000, $0.80, flat)

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

Action:  Skyworks announces earnings on 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, $10.67, up $0.30)

November 12 calls (AA111119C00012000, $0.08, flat)

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

December 13 calls (AA111217C00013000, $0.11, flat)

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

Action:  CLOSE the other half of the November calls at current prices.  Leave the December calls open.


Vivus (VVUS, $9.46, up $0.01)     

December 10 calls (VVUS111217C00010000, $0.75, flat)

Entry Price:  $0.50 (10/28/11)
Exit Target: $1.00
Return:  50%
Stop Target:  None

March 12 calls 2012 (VVUS120317C00012000, $1.85, flat)

Entry Price:  $1.55 (10/28/11)
Exit Target: $3.10
Return:  19%
Stop Target:  75 cents

Action:  Continue to hold.


Taiwan Semiconductor Manufacturing (TSM, $12.65, up $0.20)

December 12.50 calls (TSM111217C00012500, $0.70, up $0.05)

Entry Price:  $0.50 (10/26/11)
Exit Target: $1.00
Return:  40%
Stop Target:  50 cents

Action:  Continue to hold.


Pepsico (PEP, $62.31, up $0.08)

January 65 calls 2012 (PEP120121C00065000, $0.85, flat)

Entry Price:  $0.70 (10/24/11)
Exit Target: $1.40
Return:  21%
Stop Target:  None 

Action:  Continue to hold.


Qualcomm (QCOM, $51.51, up $1.37)

November 57.50 calls (QCOM111119C00057500, $0.30, up $0.05)

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

Action:  The company reports after the bell today.


Rambus (RMBS, $17.48, up $0.31)

November 16 calls (RMBS111119C00016000, $2.75, flat)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+ (closed half at $3.05 on 10/20/11)
Return:  21% 
Stop Target:  $2.45

Action:  CLOSE the other half of the trade at current levels and Buy to OPEN the December 20 calls (RMBS111217C00018000, $1.70, flat) at current prices.  Use limit orders up to $1.90-$2.00 to establish positions.


Spreadtrum Communications (SPRD, $28.68, up $1.43)     

January 25 calls 2012 (SPRD120121C00025000, $5.40, up $1.00)

Entry Price:  $1.50 (9/9/11)
Exit Target: $2.80 (closed half at $2.90 on 10/27/11)
Return:  177%
Stop Target:  $3.25, raise to $4.00 (HARD STOP)

Action:  Spreadtrum is on a roll.  We have raised the Hard Stop, again, to $4.00.     


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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8:50am (EST)

PowerShares QQQ (QQQ, $56.44, down $1.51)

November 58 calls (QQQ111119C00058000, $0.85, down $0.40)

Entry Price:  $0.90 (11/1/11)
Exit Target: $1.35-$1.80
Return:  -6%
Stop Target:  None

Action:  We would like to see the Q’s close above $57.50 today.  We normally target triple-digit returns for all of our trades but our expectations for this trade 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, $123.00, down $2.50)

December 128 calls (SPY111217C00128000, $2.25, down $0.70)

Entry Price:  $2.15 (11/1/11)
Exit Target: $3.25
Return:  5%
Stop Target:  $1.00

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.  There is risk down to $120 if the S&P trades 1,200 and further pressure down to 1,175.  This position may be volatile which is why we went with the December call options.


Las Vegas Sands (LVS, $47.15, up $0.20)

December 52.50 calls (LVS111217C00052500, $1.40, up $0.15)

Entry Price:  $1.25 (11/1/11)
Exit Target: $2.50
Return:  12%
Stop Target:  None

Action:  Shares are on the verge of a huge breakout if they can get past $50 and LVS performed well in yesterday’s carnage.     


Skyworks Solutions (SWKS, $19.11, down $0.70)

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, $10.40, down $0.36)

November 12 calls (AA111119C00012000, $0.08, down $0.06)

Entry Price:  $0.18 (10/28/11)
Exit Target: $0.36 (closed half at $0.32 on 10/28/11)
Return:  11%
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, $9.45, up $0.03)     

December 10 calls (VVUS111217C00010000, $0.75, up $0.10)

Entry Price:  $0.50 (10/28/11)
Exit Target: $1.00
Return:  50%
Stop Target:  None

March 12 calls 2012 (VVUS120317C00012000, $1.85, up $0.15)

Entry Price:  $1.55 (10/28/11)
Exit Target: $3.10
Return:  19%
Stop Target:  75 cents

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


Taiwan Semiconductor Manufacturing (TSM, $12.45, down $0.17)

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:  These are “cheap” December options and we have given up some gains over the last 2 days but we still think they are a double from current levels.


Pepsico (PEP, $62.23, down $0.72)

January 65 calls 2012 (PEP120121C00065000, $0.85, down $0.10)

Entry Price:  $0.70 (10/24/11)
Exit Target: $1.40
Return:  21%
Stop Target:  None 

Action:  We may have to closet his trade if $61.50 doesn’t hold as a test down to $60 would likely follow.  We would probably make a small profit or break even if shares do decline but we are hoping to stick with this trade through the end of the year.


Qualcomm (QCOM, $50.14, down $1.46)

November 57.50 calls (QCOM111119C00057500, $0.25, down $0.10)

Entry Price:  $0.95 (10/18/11)
Exit Target: $1.50-1.90
Return:  -74%
Stop Target:  None

Action:  The company reports after the bell today.


Rambus (RMBS, $17.17, down $0.53)

November 16 calls (RMBS111119C00016000, $2.75, down $0.20)

Entry Price:  $2.40 (9/26/11)
Exit Target: $5+ (closed half at $3.05 on 10/20/11)
Return:  21% 
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.  We are looking at the December 20’s which are at $1.80 if we do add to or close this position which could come as soon as today.         


Spreadtrum Communications (SPRD, $27.25, up $0.68)     

January 25 calls 2012 (SPRD120121C00025000, $4.40, up $0.60)

Entry Price:  $1.50 (9/9/11)
Exit Target: $2.80 (closed half at $2.90 on 10/27/11)
Return:  143%
Stop Target:  $2.95, raise to $3.25 (HARD STOP)

Action:  Another session, another 52-week high as shares kissed a peak of $27.40.  We have raised the Hard Stop, again, to $3.25.       


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, $11.17, down $0.35)

December 12 calls (MGM111217C00012000, $0.75, down $0.10)

Thoughts:  We like these calls a lot but we entered the LVS trade yesterday so we will probably drop coverage of this trade.  However, if we see an opportunity to add these calls, we may take a shot on a rebound back to $15.   


Newpark Resources (NR, $8.52, down $0.41)

December 10 call (NR111217C00010000, $0.35, down $0.05)

March 10 calls (NR120317C00010000, $0.80, flat)

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


U.S. Bancorp (USB, $24.53, down $1.06)

December 26 calls (USB111217C00026000, $0.70, down $0.25)

Thoughts:  Support at $25.50 failed yesterday and any Financial trade will be have to be monitored carefully as the group remains one of the most volatile sectors right now.


SkullCandy (SKUL, $14.85, down $0.90)

December 17.50 calls (SKUL111217C00017500, $1.10, down $1.25)

Thoughts:  We are going to follow the 15’s given yesterday’s 6% drop in SkullCandy.  There is a possible short-squeeze coming if shares can clear $18 and earnings are Thursday.


SanDisk (SNDK, $49.02, down $1.65)

December 55 calls (SNDK111217C00055000, $1.05, down $0.35)

January 60 calls 2012 (SNDK120121C00060000, $0.85, down $0.20)

Thoughts:  Continue to watch.