May 2012 | 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 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.

1:30pm (EST)

NEW TRADE!!!

PowerShares QQQ (QQQ, $64.91, down $1.44)

Buy to OPEN June 62 puts (QQQ120616P00062000, $0.80, up $0.30)

Action:  Use limit orders up to 90 cents but do not pay over $0.95-$1.00 to establish positions.

 

CURRENT TRADES

Arena Pharmaceuticals (ARNA, $2.64, down $0.13)

July 3 calls (ARNA120723C00003000, $1.10, down $0.10)

Entry Price:  $1.00 (4/30/12)
Exit Target: $2+
Return:  10%
Stop Target:  None

Action:  We should hear news next Thursday on the company’s obesity drug, Lorcaserin, and we expect the stock to be halted for the day while the FDA panel reviews the results.  We are looking for a breakout past $3.50 on good news.

 

KLA-Tencor(KLAC, $49.94, down $0.88)

June 48 puts (KLAC120616P00048000, $1.20, up $0.20)

Entry Price:  $0.45 (4/26/12)
Exit Target: $1.00
Return:  167%
Stop Target:  80 cents (HARD STOP)

Action:  It looks like we might get our close below $50 and we have added a Hard Stop.  Continue to hold.

 

First Solar (FSLR, $17.22, down $0.85)         

June 15 puts (FSLR120616P00015000, $1.05, down $0.10) 

Entry Price:  $1.15 (4/25/12)
Exit Target: $2.30
Return:  -6%
Stop Target:  50 cents

Action:  Shares are at new all-time lows.  Continue to hold.

 

iShares Russell 2000 (IWM, $79.17, down $1.45)           

June 75 puts (IWM120616P00075000, $1.25, up $0.25)

Entry Price:  $1.15 (4/25/12)
Exit Target: $2.30
Return:  12%
Stop Target:  50 cents

Action:  Continue to hold.

 

Joy Global (JOY, $66.83, down $1.76)

June 60 puts (JOY120616P00060000, $1.60, up $0.35)

Entry Price:  $1.15 (4/25/12)
Exit Target: $2.30
Return:  43%
Stop Target:  50 cents, raise to $1.00

Action:  Continue to hold the June puts.

 

Apollo Group (APOL, $33.72, down $0.69)

May 33 puts (APOL120519P00033000, $0.65, up $0.15) 

Entry Price:  $0.62 (4/20/12)
Exit Target: $1.25
Return:  5%
Stop Target:  None

Action:  Continue to hold.

 

Potash (POT, $42.04, down $1.15)   

May 40 puts (POT120519P00040000, $0.40, up $0.15)

Entry Price:  $0.40 (4/17/12)
Exit Target: $0.80
Return:  0%
Stop Target:  None

 

Action:  We would like to see Potash close under $42.50 today.

 

Lululemon Athletica (LULU, $77.87, down $2.43)

May 67.50 puts (LULU120519P00067500, $0.25, up $0.05)

Entry Price:  $0.90 (4/12/12)
Exit Target: $1.80 (closed half at $1.20 on 4/23/12)
Return:  -19%
Stop Target:  $1.00 

Action:  Continue to hold.

 

Acuity Brands (AYI, $54.35, down $0.89)           

May 50 puts (AYI120519P00050000, $0.40, up $0.10)

Entry Price:  $0.60 (4/12/12)
Exit Target: $1.20
Return:  -33%
Stop Target:  None

Action:  Continue to hold.       

         

PowerShares QQQ (QQQ, $64.91, down $1.44)

May 65 puts (QQQ120519P00065000, $1.00, up $0.45)

Entry Price:  $1.00 (4/11/12)
Exit Target: $2.00 (closed half at $1.60 on 4/23/12)
Return:  30%
Stop Target:  None

Action:  Close the trade at current levels as we have rolled over profits into the June puts.

 

Other 2012 Portfolio OPEN positions (5):  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.

 

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)

Tiffany & Company May 62.50 puts (from April 2012)

Caterpillar May 92.50 puts (from April 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 update this section on Monday with some fresh ideas.

*************************

11:10am (EST)

Joy Global (JOY, $67.19, down $1.40)

May 65 puts (JOY120519P00065000, $1.20, up $0.30)

Entry Price:  $0.85 (4/25/12)
Exit Target: $1.70
Return:  41%
Stop Target:  None

Action:  We still have the June options to play a continued downside move but we wanted to close the May puts as we position ourselves for some June and July put options.

*********************

9:00am (EST)

Arena Pharmaceuticals (ARNA, $2.77, up $0.17)

July 3 calls (ARNA120723C00003000, $1.20, up $0.10)

Entry Price:  $1.00 (4/30/12)
Exit Target: $2+
Return:  20%
Stop Target:  None

Action:  We should hear news next Thursday on the company’s obesity drug, Lorcaserin, and we expect the stock to be halted for the day while the FDA panel reviews the results.  We are looking for a breakout past $3.50 on good news.

 

KLA-Tencor(KLAC, $50.82, down $1.04)

June 48 puts (KLAC120616P00048000, $1.00, up $0.30)

Entry Price:  $0.45 (4/26/12)
Exit Target: $1.00
Return:  122%
Stop Target:  None

Action:  Shares touched a low of $50.59 yesterday and we would love to see a close below $50 today.  We may close half of the trade in our afternoon update but we want to see how shares trade until then.  If we are below $50, we may leave the entire trade open but wait for a Profit Alert either way before taking action.  These are June options and we have 43 days before they expire.

 

First Solar (FSLR, $18.07, down $0.14)         

June 15 puts (FSLR120616P00015000, $1.15, up $0.10) 

Entry Price:  $1.15 (4/25/12)
Exit Target: $2.30
Return:  0%
Stop Target:  50 cents

Action:  First Solar reported a terrible quarter after the closing bell and shares took a while to open in extended trading last night.  There was a brief pop higher when they did open but shares were below $17.50 shortly afterwards which was yesterday’s new all-time low.  Shares closed below $18 but let’s see where we are at on the open.  We have plenty of time for this trade to play out as we went with June options instead of the May puts.

 

iShares Russell 2000 (IWM, $80.62, down $1.15)           

June 75 puts (IWM120616P00075000, $1.00, up $0.15)

Entry Price:  $1.15 (4/25/12)
Exit Target: $2.30
Return:  -10%
Stop Target:  50 cents

Action:  Continue to hold.

 

Joy Global (JOY, $68.59, down $2.01)

May 65 puts (JOY120519P00065000, $0.85, up $0.30)

Entry Price:  $0.85 (4/25/12)
Exit Target: $1.70
Return:  0%
Stop Target:  None

June 60 puts (JOY120616P00060000, $1.25, up $0.25)

Entry Price:  $1.15 (4/25/12)
Exit Target: $2.30
Return:  8%
Stop Target:  50 cents

Action:  Joy Global kissed a low of $68.16 on Thursday and we finally got our close below $70.

 

Apollo Group (APOL, $34.41, down $0.41)

May 33 puts (APOL120519P00033000, $0.50, up $0.15) 

Entry Price:  $0.62 (4/20/12)
Exit Target: $1.25
Return:  -19%
Stop Target:  None

Action:  Shares kissed a low of $33.94 while the options reached a high of 56 cents.  We would like to see a close below this level ahead of the weekend.     

 

Potash (POT, $43.19, down $0.58)   

May 40 puts (POT120519P00040000, $0.25, up $0.05)

Entry Price:  $0.40 (4/17/12)
Exit Target: $0.80
Return:  -38%
Stop Target:  None

Action:  We would like to see Potash close under $42.50 today.

 

Lululemon Athletica (LULU, $80.30, up $0.87)

May 67.50 puts (LULU120519P00067500, $0.20, flat)

Entry Price:  $0.90 (4/12/12)
Exit Target: $1.80 (closed half at $1.20 on 4/23/12)
Return:  -22%
Stop Target:  $1.00 

Action:  Continue to hold.

 

Acuity Brands (AYI, $55.24, down $1.43)           

May 50 puts (AYI120519P00050000, $0.30, up $0.10)

Entry Price:  $0.60 (4/12/12)
Exit Target: $1.20
Return:  -50%
Stop Target:  None

Action:  Continue to hold.       

         

PowerShares QQQ (QQQ, $66.35, down $0.71)

May 65 puts (QQQ120519P00065000, $0.55, up $0.20)

Entry Price:  $1.00 (4/11/12)
Exit Target: $2.00 (closed half at $1.60 on 4/23/12)
Return:  8%
Stop Target:  None

Action:  Continue to hold.

 

Other 2012 Portfolio OPEN positions (5):  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.

 

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)

Tiffany & Company May 62.50 puts (from April 2012)

Caterpillar May 92.50 puts (from April 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.

 

TiVo (TIVO, $10.91, down $0.04)

August 12 calls (TIVO120818C00012000, $0.70, flat)

August 13 calls (TIVO120818C00013000, $0.45, flat)

Thoughts:  We are hearing takeover chatter, again, in TiVo and it has been a favorite trade of ours for the Weekly Wrap.  Open Interest (OI) stands at 10,000 contracts for the 12’s and for the August 13’s, OI is over 16,000 contracts.

 

Ross Stores (ROST, $63.71, down $0.14)

June 65 calls (ROST120616C00065000, $1.60, down $0.15)

Thoughts:  Shares are in a STRONG uptrend as you can see. 

 

PetSmart (PETM, $58.86, down $0.25)

May 60 calls (PETM120519C00060000, $0.80, down $0.10)

Thoughts:  Watch for now.

 

MGM Resorts (MGM, $12.92, down $0.63)

June 14 calls (MGM120616C00014000, $0.25, down $0.30)

June 13 puts (MGM120616P00013000, $0.70, down $0.20)

Thoughts:  Watch for now.