June 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.

12:45pm (EST)

Illinois Tool Works (ITW, $53.83, down $0.58)  

July 50 puts (ITW120721P00050000, $1.25, up $0.10)

Entry Price:  $1.05 (6/4/12)
Exit Target: $2.10
Return:  19%
Stop Target:  None

Action:  Today’s low has been $53.49 and we are looking for a close below $53.50.  Shares could fall below $50 on further weakness by mid-July which should get these options to $2+.  

 

RealD (RLD, $11.40, up $0.20)

June 10 puts (RLD120616P00010000, $0.20, flat)

Entry Price:  $0.35 (5/31/12)
Exit Target: $0.70
Return:  -43%
Stop Target:  None

Action:  We are looking for a break below $10.50 this week which should get us to single-digits by next week.

 

Coinstar (CSTR, $58.65, up $0.49)   

July 52.50 puts (CSTR120721P00052500, $1.50, down $0.30)

Entry Price:  $1.05 (5/30/12)
Exit Target: $2.10
Return:  43%
Stop Target:  $1.20 (Hard Stop)

Action:  The options have traded down to $1.32 so our Hard Stop hasn’t been triggered.  Our near-term target is $55 and our longer-term target is for a drop below $50.  

 

KLA-Tencor (KLAC, $44.60, down $0.05)

July 42 puts (KLAC120721P00042000, $1.20, down $0.05)

Entry Price:  $0.85 (5/30/12)
Exit Target: $1.70 (closed half on 6/1/12 at $1.30)
Return:  47%
Stop Target:  90 cents (Hard Stop)

Action:  The puts have traded down to 99 cents so our Hard Stop has held.  We are expecting a test down to $40, possibly $38, on further weakness but we will likely be out of the trade if shares close above $45.  

 

Constant Contact (CTCT, $19.99, down $0.02)

July 17.50 puts (CTCT120721P00017500, $0.75, flat)

Entry Price:  $0.55 (5/24/12)
Exit Target: $1.10
Return:  36%
Stop Target:  None

 

Action:  We will stick with the trade as long as $22 holds.  We have a near-term target of $18 and a mid-July target of $15.

  

First Solar (FSLR, $12.81, up $0.53)         

July 10 puts (FSLR120721P00010000, $0.65, down $0.15) 

Entry Price:  $0.62 (5/23/12)
Exit Target: $1.20
Return:  5%
Stop Target:  65 cents

Action:  Continue to hold for now.  

 

Best Buy (BBY, $18.95, up $0.73)

July 16 puts (BBY120721P00016000, $0.35, down $0.15)

Entry Price:  $0.85 (5/21/12)
Exit Target: $1.70
Return:  -59%
Stop Target:  None

Action:  Resistance at $20 should hold if there is further strength this week.  Our near-term price target is for a test down to $15 and our breakeven point is $15.15.  Longer-term we have a price target of $12.50 for shares of Best Buy.   

 

Apollo Group (APOL, $32.65, up $0.23)

August 27 puts (APOL120818P00027000, $0.90, down $0.10)

Entry Price:  $0.90 (5/10/12)
Exit Target: $1.80
Return:  0%
Stop Target:  45 cents

Action:  Shares are testing resistance at $32.50 which was prior support.  The 52-week low for Apollo is $30.93 and we are expecting shares to test $30 over the next week or two.  Our longer-term price targets of $25 and $20.  If shares can trade to the teens by mid-August, we will make over 600% with these put options.

The $1 trillion in student-debt loans is starting to make more and more headlines and we have been telling you the Apollo story for years.  Do yourself a favor a research our website by typing in APOL in the search box and read our past articles.  This is the next bubble to burst or is starting to burst. 

 

Arena Pharmaceuticals (ARNA, $6.20, down $0.23)  

July 3 calls (ARNA120723C00003000, $3.40, down $0.20)

Entry Price:  $1.00 (4/30/12)
Exit Target: $2+ (closed half on 6/5/12 at $3.40)
Return:  240%
Stop Target:  $3.40, lower to $3 (Hard Stop on other HALF)

Action:  Our Hard Stop of $3.40 has been triggered on HALF of the trade so take profits.  We will lower the HS to $3 on the other half to give the trade a little wiggle room.

We have a price target of $10+ if there is no delay with their obesity drug, Lorcaserin, which could go to market by the end of the year if all goes well.

 

Other 2012 Portfolio OPEN positions (2):  These are trades that are still open in the portfolio but are down over 50%.  They have longer expiration dates and 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 if 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)

 

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 but these are the trades we are watching as new candidates.

We will update this section in the morning.