April 2012 | Members

MEMBERS AREA

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 a “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.

12:15pm (EST)

Caterpillar (CAT, $101.11, down $2.46) 

May 90 puts (CAT120519P00090000, $1.25, up $0.35)

Entry Price:  $0.90 (4/9/12)
Exit Target: $1.80
Return:  39%
Stop Target:  None

Action:  We would love to see a close below $100 today.  Our near-term target is $95 which should be enough to get a double out of the put options.

 

Tiffany & Company (TIF, $66.27, down $0.93)

May 62.50 puts (TIF0519P00062500, $1.10, up $0.20)

Entry Price:  $1.05 (4/9/12)
Exit Target: $2.10
Return:  5%
Stop Target:  None

Action:  Tiffany’s traded down to $65.77 at the open while the options traded up to $1.15.  We believe shares could test $60 over the next month or so which gets the put options to at least $2.50. 

 

Acuity Brands (AYI, $53.24, down $1.09)

May 50 puts (AYI120519P00050000, $1.30, up $0.35)

Entry Price:  $0.55 (4/5/12)
Exit Target: $1.10
Return:  136%
Stop Target:  60 cents (HARD STOP)

Action:  Close ONE-THIRD (1/3) of the trade at current levels.

 

Lululemon Athletica (LULU, $72.87, down $3.10)

May 67.50 puts (LULU120519P00067500, $1.50, up $0.60)

Entry Price:  $1.05 (4/4/12)
Exit Target: $2.10
Return:  43%
Stop Target:  50 cents

Action:  Shares are at their lows for the day and a close below $72.50 would be beautiful.

 

C.H. Robinson Worldwide (CHRW, $63.21, down $0.79)

May 60 puts (CHRW120519P00060000, $1.05, up $0.15)

Entry Price:  $0.65 (4/4/12)
Exit Target: $1.30
Return:  62%
Stop Target:  None 

Action:  Shares traded down to $63.50 yesterday and the 52-week low is $62.30.  Our near-term target calls for a test down to $60, possibly $55, which would make these put options worth at least $5.

 

BroadSoft (BSFT, $38.47, down $0.27)

May 35 puts (BSFT120519P00035000, $1.90, up $0.10)

Entry Price:  $1.35 (4/2/12)
Exit Target: $2.25
Return:  41%
Stop Target:  $1.35

Action:  Our near-term target is $35 or worse.  A break below the 200-day at $34 would really put pressure on the stock.

 

Apache (APA, $93.43, down $1.15

April 92.50 puts (APA120421P00092500, $1.70, up $0.50)

Entry Price:  $0.90 (3/29/12)
Exit Target: $1.80 (closed half at $1.40 on 4/9/12)
Return:  72%
Stop Target:  90 cents (HARD STOP)

Action:  Continue to hold the other half.

 

Potash (POT, $42.59, down, $1.37)

April 42.50 puts (POT120421P00042500, $0.95, up $0.45)

Entry Price:  $0.55 (3/29/12)
Exit Target: $1.10
Return:  73%
Stop Target:  None

Action:  Close HALF of the trade at current levels.  Our near-term target is $43 but shares could test $40 if the market continues to pullback.

 

First Solar (FSLR, $20.14, down $0.05)

May 19 puts (FSLR120519P00019000, $1.85, flat)  

Entry Price:  $0.75 (3/28/12)
Exit Target: $1.50
Return:  147%
Stop Target:  $1.30 (HARD STOP)

Action:  The May options will continue to surge on a drop below $20.

       

Arena Pharmaceuticals (ARNA, $3.06, down $0.05)

May 3.50 calls (ARNA120519C00003500, $1.00, flat)  

Entry Price:  $0.85 (3/26/12)
Exit Target: $1.70 (closed half at $1.10 on 3/14/12) 
Return:  24%
Stop Target:  70 cents (Hard Stop) 

Action:  The company will meet with the Endocrinologic and Metabolic Drugs Advisory Committee in early May to discuss the safety and efficacy of its obesity drug, Lorcaserin.  We expect a good outcome from the committee which will make a recommendation to the FDA for a meeting scheduled in June.  Support has been solid at $3 and there is further help at $2.40.  A break above $3.50 would be bullish for another leg higher.

 

Other 2012 Portfolio OPEN positions (8):  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 2012 Portfolio link in the Members Area to view ALL open/ closed trades.

 

magicJack VocalTec April 30 calls (from March 2012) – shares soared 11% yesterday but we are still in the woods with these calls 

E*Trade Financial July 12 calls (from March 2012) – we still like this position and will bring back coverage once shares reclaim the $11 level. 

Bank of America January 12.50 calls 2013, July 12 calls (from March 2012) – same deal with BAC as we will bring back coverage when shares crack $10. 

Acme Packet April 40 calls (from February 2012) – will not recover in time.  

Dendreon May 22 calls (from January 2012) – still hope for a buyout offer.    

Silver Wheaton April 42 calls (from March 2012) – silver looks cheap but is not helping us with this trade.

U.S. Oil Fund April 45 calls (from February 2012) – the close below $40 was the nail in the coffin.  

Sony April 22 calls (from February 2012) – having trouble holding $20.  

 

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.