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.

2:30pm (EST)

We normally don’t like to open new trades on a Friday but there is one stock on our Watch List that continues to look like a great short and shares have just fallen below $35.  Our 6-12 month target for this overvalued, overrated stock is $20.  This means we are buying put options.

NEW TRADE!!!

Apollo Group (APOL, $34.99, down $0.24)

May 33 puts (APOL120519P00033000, $0.62, down $0.03)

Action:  The current bid/ ask is 62-64 cents for the May puts so use limit orders up to 65-70 cents.  Do not pay more than 75 cents to establish positions.

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1:00pm (EST)

S&P 500 Spiders (SPY, $138.75, up $1.03)     

May 134 puts (SPY120519P00134000, $1.00, down $0.30)

Entry Price:  $1.15 (4/17/12)
Exit Target: $2.30
Return:  -13%
Stop Target:  60 cents

Action:  We have a near-term target of 1,350 for the S&P which would get the Spiders down to $135.  We would like to see a close below $137.50 today.

 

Potash (POT, $43.98, up $0.57)     

May 40 puts (POT120519P00040000, $0.35, down $0.15)

Entry Price:  $0.40 (4/17/12)
Exit Target: $0.80
Return:  -13%
Stop Target:  None

Action:  We would like to see a close below $44 today as we look for shares to make lower highs and lower lows in the coming weeks.

 

Green Mountain Coffee Roasters (GMCR, $44.15, up $0.73)

May 35 puts (GMCR120519P00035000, $0.90, down $0.20)

Entry Price:  $0.85 (4/17/12)
Exit Target: $1.70
Return:  6%
Stop Target:  None

Action:  Shares should stay under $45 which would have us looking good going into next week.   

 

Lululemon Athletica (LULU, $73.96, up $1.00)

May 67.50 puts (LULU120519P00067500, $0.85, down $0.25)

Entry Price:  $0.90 (4/12/12)
Exit Target: $1.80
Return:  -6%
Stop Target:  None

Action:  Shares are off their highs and we should see a break below $70 next week.

 

Acuity Brands (AYI, $55.11, up $0.11)

May 50 puts (AYI120519P00050000, $0.60, down $0.10)

Entry Price:  $0.60 (4/12/12)
Exit Target: $1.20
Return:  0%
Stop Target:  None

Action:  We would like to see a move down to $54-$53 today. 

 

LinkedIn (LNKD, $105.90, up $1.32)

May 82.50 puts (LNKD120519P00082500, $1.20, down $0.20)

Entry Price:  $0.90 (4/12/12)
Exit Target: $1.80 (closed half at $1.10 on 4/17/12)
Return:  28%
Stop Target:  $1.10

Action:  We are still looking for a drop below $100 so we are pushing this trade a little.  The put options were active up and down the line yesterday which is showing us further weakness.

 

Caterpillar (CAT, $108.30, up $0.94) 

May 92.50 puts (CAT120519P00092500, $0.45, down $0.10)

Entry Price:  $0.85 (4/12/12)
Exit Target: $1.70
Return:  -47%
Stop Target:  None

Action:  Continue to hold.

 

PowerShares QQQ (QQQ, $66.23, up $0.37)

May 65 puts (QQQ120519P00065000, $0.90, down $0.20)

Entry Price:  $1.00 (4/11/12)
Exit Target: $2.00
Return:  -10%
Stop Target:  None

Action:  We are looking for a move back below $65 next week.

 

Deckers Outdoor (DECK, $68.50, up $1.37)

May 50 puts (DECK120519P00050000, $0.25, down $0.05)

Entry Price:  $0.50 (4/11/12)
Exit Target: $1.00
Return:  -50%
Stop Target:  None

Action:  The premiums have held up well as DECK has soared off its lows.  Shares are up $7+ since Monday’s bottom of $61.  The stock took the stair higher this week but we are hoping for an elevator ride lower by mid-May.

 

First Solar (FSLR, $21.00, down $0.40)         

May 18 puts (FSLR120519P00018000, $0.95, up $0.10) 

Entry Price:  $0.90 (4/11/12)
Exit Target: $1.80
Return:  6%
Stop Target:  None

Action:  Once the $20 level falls, this trade will really pick up steam.

 

Tiffany & Company (TIF, $67.46, up $1.31)

May 62.50 puts (TIF0519P00062500, $0.60, down $0.25)

Entry Price:  $1.05 (4/9/12)
Exit Target: $2.10
Return:  -43%
Stop Target:  80 cents

Action:  Continue to hold.

 

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.

 

April Options Expire TODAY.

magicJack VocalTec April 30 calls (from March 2012) – we will be back to play this one down the road.  This was one of our rollover trades that lost momentum but shares should surge in the back half of the year.

Acme Packet April 40 calls (from February 2012) – we totally got fooled on this one.  Shares are at 52-week lows and there was no rebound.

Silver Wheaton April 42 calls (from March 2012) – we got silver wrong but have been buying (American Eagles) at these low levels for our personal account.

Sony April 22 calls (from February 2012) – their new CEO failed to impress when the company announced earnings.

U.S. Oil Fund April 45 calls (from February 2012) – The drop below $40 crushed this trade.

 

E*Trade Financial July 12 calls (from March 2012)

Bank of America January 12.50 calls 2013, July 12 calls (from March 2012)

Dendreon May 22 calls (from January 2012)

 

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 be back on Monday with some new candidates.

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9:00am (EST)

S&P 500 Spiders (SPY, $137.72, down $0.89)

May 134 puts (SPY120519P00134000, $1.40, up $0.05)

Entry Price:  $1.15 (4/17/12)
Exit Target: $2.30
Return:  22%
Stop Target:  60 cents

Action:  We thought about closing this trade at 3:30pm yesterday but we decided to hold on because we wanted to be short going into next week.  We could have made 30% yesterday but we are hoping to make 100% by next Friday.  We have a near-term target of 1,350 for the S&P which would get the Spiders down to $135.  We would like to see a close below $137 today

 

Potash (POT, $43.41, up $0.15)     

May 40 puts (POT120519P00040000, $0.50, down $0.05)

Entry Price:  $0.40 (4/17/12)
Exit Target: $0.80
Return:  25%
Stop Target:  None

Action:  We were looking for a close below $43.50 yesterday and we got it.  Our near-term target is for a test down to $40, possibly $38.

 

Green Mountain Coffee Roasters (GMCR, $43.42, flat)

May 35 puts (GMCR120519P00035000, $1.10, flat)

Entry Price:  $0.85 (4/17/12)
Exit Target: $1.70
Return:  29%
Stop Target:  None

Action:  We thought shares would crack after testing a low of $43.06 yesterday.  We are looking for a close under $43.15 again today.  

 

Lululemon Athletica (LULU, $72.96, down $1.82)

May 67.50 puts (LULU120519P00067500, $1.10, up $0.20)

Entry Price:  $0.90 (4/12/12)
Exit Target: $1.80
Return:  22%
Stop Target:  None

Action:  Shares traded down to $72.62 on Thursday and we would love to see a close below $70 today.

 

Acuity Brands (AYI, $55.00, down $1.62)

May 50 puts (AYI120519P00050000, $0.70, up $0.20)

Entry Price:  $0.60 (4/12/12)
Exit Target: $1.20
Return:  17%
Stop Target:  None

Action:  Shares dipped to a low of $54.83 and we nearly got our close below double-nickels.  We would like to see a move down to $54-$53 today. 

 

LinkedIn (LNKD, $104.58, down $0.42)

May 82.50 puts (LNKD120519P00082500, $1.40, up $0.40)

Entry Price:  $0.90 (4/12/12)
Exit Target: $1.80 (closed half at $1.10 on 4/17/12)
Return:  39%
Stop Target:  $1.10

Action:  Shares traded own to $102.55 while the options reached a high of $2.30 which easily gave us a triple-digit gain.  As much as we should’ve closed the trade, we are still looking for a drop below $100 so we are pushing it a little.  The put options were active up and down the line yesterday which is showing us further weakness.

 

Caterpillar (CAT, $107.36, down $1.39) 

May 92.50 puts (CAT120519P00092500, $0.55, up $0.10)

Entry Price:  $0.85 (4/12/12)
Exit Target: $1.70
Return:  -35%
Stop Target:  None

Action:  Shares reached $109.77 yesterday and failed $110 again while the low came in $106.37.  A move below $105 would be beautiful today.

 

PowerShares QQQ (QQQ, $65.86, down $0.75)

May 65 puts (QQQ120519P00065000, $1.10, up $0.20)

Entry Price:  $1.00 (4/11/12)
Exit Target: $2.00
Return:  10%
Stop Target:  None

Action:  We are looking for a move back below $65 as shares traded down to $65.62 yesterday.

 

Deckers Outdoor (DECK, $67.13, up $0.59)

May 50 puts (DECK120519P00050000, $0.30, down $0.05)

Entry Price:  $0.50 (4/11/12)
Exit Target: $1.00
Return:  -40%
Stop Target:  None

Action:  After starting the week off within spitting distance of hitting fresh 52-week lows, an analyst upgraded the stock.  The move doesn’t make much sense to us and hopefully after taking the stairs up, the elevator down resumes next week.  These are “cheap” out-of-the-money” puts so we aren’t too worried about the percentage moves right now.       

 

First Solar (FSLR, $21.40, up $0.05)         

May 18 puts (FSLR120519P00018000, $0.90, down $0.10) 

Entry Price:  $0.90 (4/11/12)
Exit Target: $1.80
Return:  0%
Stop Target:  None

Action:  Once the $20 level falls, this trade will really pick up steam.

 

Tiffany & Company (TIF, $66.15, down $0.28)

May 62.50 puts (TIF0519P00062500, $0.85, up $0.10)

Entry Price:  $1.05 (4/9/12)
Exit Target: $2.10
Return:  -19%
Stop Target:  80 cents

Action:  We would like to see a close below $65 today.  

 

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.

 

April Options Expire TODAY.

magicJack VocalTec April 30 calls (from March 2012) – we will be back to play this one down the road.  This was one of our rollover trades that lost momentum but shares should surge in the back half of the year.

Acme Packet April 40 calls (from February 2012) – we totally got fooled on this one.  Shares are at 52-week lows and there was no rebound.

Silver Wheaton April 42 calls (from March 2012) – we got silver wrong but have been buying (American Eagles) at these low levels for our personal account.

Sony April 22 calls (from February 2012) – their new CEO failed to impress when the company announced earnings.

U.S. Oil Fund April 45 calls (from February 2012) – The drop below $40 crushed this trade.

 

E*Trade Financial July 12 calls (from March 2012)

Bank of America January 12.50 calls 2013, July 12 calls (from March 2012)

Dendreon May 22 calls (from January 2012)

 

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.

 

Fossil (FOSL, $129.92, down $2.73)

May 105 puts (FSLR120519P00105000, $1.10, up $0.20)

Thoughts:  These are expensive puts for options this far out-of-the-money but we may be getting a nice setup for a quick trade.

 

Netflix (NFLX, $107.09, up $0.13)      

May 80 puts (NFLX120519P00080000, $1.05, down $0.10)

Thoughts:  Watch for now.

 

Sears Holdings (SHLD, $55.66, down $0.35)

May 45 puts (SHLD120519P00045000, $1.00, down $0.10)

Thoughts:  Watch for now.  

 

Apollo Group (APOL, $35.23, down $0.69)

May 33 puts (APOL120519P00033000, $0.65, up $0.25)

Action:  We don’t know why we haven’t pulled the trigger yet on this trade.  In fact, we almost sent it out as an official recommendation because we dropped coverage of the August 20 puts.  However, we wanted to watch the action from the sidelines without taking on more positions until we get a little more confirmation a breakdown is coming in the market.