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.

1:20pm (EST)

Green Mountain Coffee Roasters (GMCR, $26.27, down $23.25)   

May 35 puts (GMCR120519P00035000, $8.90, up $8.55)

Entry Price:  $0.85 (4/17/12)
Exit Target: $1.70 (closed half at $6 on 5/3/12, closed half at $5.50 on 5/3/12)
Return:  576%
Stop Target:  None

Action:  We almost listed a stop of $30.50 to close the other half of the trade but we really felt shares would stay under $30.  We are already fielding emails asking how low shares can go and we have mentioned $25.  The trade is closed on our end but for those of you still in, set stops at $29 on the stock or $6 on the options and keep raising the stop if shares continue lower.  We are dropping coverage of the trade so good luck to those of you who are trying to squeeze a little more out of the trade.

 

Arena Pharmaceuticals (ARNA, $2.74, up $0.14)

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, $51.07, down $0.79)

June 48 puts (KLAC120616P00048000, $0.75, up $0.05)

Entry Price:  $0.45 (4/26/12)
Exit Target: $1.00
Return:  67%
Stop Target:  None

Action:  Shares are at session lows we are looking for a close below $50.  

 

First Solar (FSLR, $17.89, down $0.32)         

June 15 puts (FSLR120616P00015000, $1.10, up $0.05) 

Entry Price:  $1.15 (4/25/12)
Exit Target: $2.30
Return:  -1%
Stop Target:  50 cents

Action:  Shares have hit another all-time low of $17.60 today and earnings are after the close.  

 

iShares Russell 2000 (IWM, $80.70, down $1.07)           

June 75 puts (IWM120616P00075000, $0.95, up $0.10)

Entry Price:  $1.15 (4/25/12)
Exit Target: $2.30
Return:  -15%
Stop Target:  50 cents

Action:  Continue to hold.

 

Joy Global (JOY, $68.69, down $1.91)

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, $1.20, up $0.20)

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

Action:  Continue to hold.

 

Apollo Group (APOL, $34.09, down $0.73)

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:  Our near-term target is $30.

 

Potash (POT, $43.16, down $0.61)   

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:  Continue to hold.

 

Lululemon Athletica (LULU, $80.38, up $0.95)

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, $55.57, down $1.10)           

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, $66.48, down $0.58)

May 65 puts (QQQ120519P00065000, $0.45, up $0.10)

Entry Price:  $1.00 (4/11/12)
Exit Target: $2.00 (closed half at $1.60 on 4/23/12)
Return:  3%
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.

We will be back in the morning with fresh updates and some possible new play

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10:00am (EST)

Green Mountain Coffee Roasters (GMCR, $29.80, down $19.72)   

May 35 puts (GMCR120519P00035000, $5.70, up $5.30)

Entry Price:  $0.85 (4/17/12)
Exit Target: $1.70
Return:  576%
Stop Target:  None

Action:  The puts opened at $5.45 and have traded to a high of $6.20 today.  We were able to close half of the trade at $6 but shares traded above $30 and we were triggered on the other half of the trade.  We closed the other half at $5.50.  The average closing price was $5.75 so out total return on the trade was 576%.

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

9:00am (EST)

Green Mountain Coffee Roasters (GMCR, $49.52, down $0.22)   

May 35 puts (GMCR120519P00035000, $0.40, up $0.10)

Entry Price:  $0.85 (4/17/12)
Exit Target: $1.70
Return:  -53%
Stop Target:  None

Action:  We listed this trade first because we want to give specific instructions on how to close this trade.  We are closing HALF of the trade into weakness this morning so everyone will get different fills but try to close HALF of the trade for $5 or better.

Shares should open below $30 as they are at $29.40 as we head to press.  If the stock rebounds above $30 after opening, we will close the entire trade.

To review, close half the trade and leave the other half open unless shares trade above $30 afterwards.  We will be sending out a Profit Alert once we close half to provide an update and the chart shows a possible dip to $25. 

 

Arena Pharmaceuticals (ARNA, $2.60, up $0.26)

July 3 calls (ARNA120723C00003000, $1.10, up $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, $51.86, down $0.37)

June 48 puts (KLAC120616P00048000, $0.70, up $0.05)

Entry Price:  $0.45 (4/26/12)
Exit Target: $1.00
Return:  56%
Stop Target:  None

Action:  Shares reached a low of $51.33 as our puts traded to a high of 80 cents.  We should get a double on this trade if shares fall to $50.50 and our exit target of $1 should be reached on a break below $50.  We may close half of the trade if reached, or we may move the exit target up.

 

First Solar (FSLR, $18.21, down $0.31)         

June 15 puts (FSLR120616P00015000, $1.05, up $0.05) 

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

Action:  Shares hit another all-time low of $17.65 yesterday but finished above the $18 level.  We have a near-term target of $15 on the stock but shares could hit single-digits by the end of the year depending on what they say in their earnings report after the close today.

 

iShares Russell 2000 (IWM, $81.77, up $0.22)           

June 75 puts (IWM120616P00075000, $0.85, down $0.05)

Entry Price:  $1.15 (4/25/12)
Exit Target: $2.30
Return:  -24%
Stop Target:  50 cents

Action:  The iShares fell to $80.57 and we were hoping a drop below $80 would stick.  The puts reached a high of $1.01.

 

Joy Global (JOY, $70.60, down $0.05)

May 65 puts (JOY120519P00065000, $0.55, down $0.05)

Entry Price:  $0.85 (4/25/12)
Exit Target: $1.70
Return:  -35%
Stop Target:  None

June 60 puts (JOY120616P00060000, $0.95, up $0.05)

Entry Price:  $1.15 (4/25/12)
Exit Target: $2.30
Return:  -15%
Stop Target:  50 cents

Action:  We got our break below $70 as Joy Global traded down to $68.75 yesterday.  The May 65’s reached a high of 82 cents while the June 60’s hit $1.16.  We would like to be out of the May puts by Friday with a profit but we may have to hold them into next week.  However, we need to be careful as the time premium will start to erode as these options only have 2 weeks before they expire.    

 

Apollo Group (APOL, $34.82, down $0.29)

May 33 puts (APOL120519P00033000, $0.35, flat) 

Entry Price:  $0.62 (4/20/12)
Exit Target: $1.25
Return:  -44%
Stop Target:  None

Action:  Apollo Group touched a low of $34.38 yesterday and the 52-week low is $33.71 which was set last week.  The puts reached 47 cents.  Our near-term target is $30 but these options are also May puts so we need a test to $32.50 to breakeven in 2 weeks.  Anything under $32 and we should double our money.

 

Potash (POT, $43.77, down $0.04)   

May 40 puts (POT120519P00040000, $0.20, flat)

Entry Price:  $0.40 (4/17/12)
Exit Target: $0.80
Return:  -50%
Stop Target:  None

Action:  Potash fell to $43.21 before ending the day near even.  Continue to hold.

 

Lululemon Athletica (LULU, $79.43, up $3.38)

May 67.50 puts (LULU120519P00067500, $0.20, down $0.10)

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:  We were able to close half of this trade for a profit when shares were near $70 but Lulu has gone coo-coo since.  The stock hit another 52-week high yesterday and is pushing $80.  We are still hoping to close the other half of the trade at higher levels so we don’t take a loss but we are running out of time.        

 

Acuity Brands (AYI, $56.67, down $0.06)           

May 50 puts (AYI120519P00050000, $0.20, flat)

Entry Price:  $0.60 (4/12/12)
Exit Target: $1.20
Return:  -67%
Stop Target:  None

Action:  Continue to hold.       

         

PowerShares QQQ (QQQ, $67.06, up $0.19)

May 65 puts (QQQ120519P00065000, $0.35, down $0.10)

Entry Price:  $1.00 (4/11/12)
Exit Target: $2.00 (closed half at $1.60 on 4/23/12)
Return:  -1%
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, $10.95, flat)

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, $63.85, up $1.39)

June 65 calls (ROST120616C00065000, $1.75, up $0.70)

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

 

PetSmart (PETM, $59.11, up $0.69)

May 60 calls (PETM120519C00060000, $0.90, up $0.20)

Thoughts:  Watch for now.

 

MGM Resorts (MGM, $13.55, up $0.26)

June 14 calls (MGM120616C00014000, $0.55, up $0.10)

June 13 puts (MGM120616P00013000, $0.50, down $0.10)

Thoughts:  MGM announces earning on Thursday.