9:00am (EST)

Illinois Tool Works (ITW, $54.41, down $0.44)  

July 50 puts (ITW120721P00050000, $1.20, up $0.25)

Entry Price:  $1.05 (6/4/12)
Exit Target: $2.10
Return:  14%
Stop Target:  None

Action:  Shares traded to a low of $53.95 and we were looking for a close below $54 yesterday.  The options reached a high of $1.30.  The stock could fall below $50 on further weakness by mid-July which should get these options to 2+.  The chart we showed you yesterday was for 6-months.  Below is a 2-year chart which is showing a test to the $40’s.

RealD (RLD, $11.20, down $0.05)

June 10 puts (RLD120616P00010000, $0.20, up $0.05)

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

Action:  RealD kissed a low of $10.97 before finishing above $11.  The options caught a bid as the “ask” is now up to 25 cents.  We are looking for a break below $10.50 this week which should get us to single-digits by next week.  

 

Coinstar (CSTR, $58.06, down $0.59)   

July 52.50 puts (CSTR120721P00052500, $1.85, up $0.15)

Entry Price:  $1.05 (5/30/12)
Exit Target: $2.10
Return:  76%
Stop Target:  50 cents, raise to $1.20 (Hard Stop)

Action:  Our near-term target is $55 and our longer-term target is for a drop below $50.  Shares touched a low of $57.42 on Monday but we have raised the Stop Target from 50 cents to $1.20 and we have made it a Hard Stop.        

 

KLA-Tencor (KLAC, $44.65, up $0.09)

July 42 puts (KLAC120721P00042000, $1.25, down $0.05)

Entry Price:  $0.85 (5/30/12)
Exit Target: $1.70 (closed half on 6/1/12 at $1.30)
Return:  50%
Stop Target:  90 cents (Hard Stop)

Action:  Shares traded to a low of $44.06 while the puts hit $1.40.  We are expecting a test down to $40, possibly $38, on further weakness but we will likely be out of the trade if shares move above $45.   

 

Constant Contact (CTCT, $20.01, up $0.98)

July 17.50 puts (CTCT120721P00017500, $0.75, down $0.15)

Entry Price:  $0.55 (5/24/12)
Exit Target: $1.10
Return:  35%
Stop Target:  None

Action:  We were surprised to see the rebound in Constant Contact as shares closed above $20 after trading down to $19.03.  This level was prior support and 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, $12.28, up $0.51)         

July 10 puts (FSLR120721P00010000, $0.80, down $0.10) 

Entry Price:  $0.62 (5/23/12)
Exit Target: $1.20
Return:  29%
Stop Target:  60 cents, raise to 65 cents

Action:  Shares traded to $11.43 before rebounding to close above $12.  It was another new 52-week and all-time low for the stock and we are looking for a close below $11.50 this week.  We have moved the Stop Target up a nickel but it is not a Hard Stop as we expect shares to hit single-digits by mid-July.   

 

Best Buy (BBY, $18.22, down $0.08)

July 16 puts (BBY120721P00016000, $0.50, flat)

Entry Price:  $0.85 (5/21/12)
Exit Target: $1.70
Return:  -41%
Stop Target:  None

Action:  Shares fell below $18 to $17.92 yesterday.  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, $32.42, down $0.82)

August 27 puts (APOL120818P00027000, $0.95, down $0.15)

Entry Price:  $0.90 (5/10/12)
Exit Target: $1.80
Return:  6%
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 and read our past articles.  The is the next bubble to burst or is starting to burst. 

 

Arena Pharmaceuticals (ARNA, $6.43, up $0.03)  

July 3 calls (ARNA120723C00003000, $3.60, flat)

Entry Price:  $1.00 (4/30/12)
Exit Target: $2+
Return:  260%
Stop Target:  $3.40 (Hard Stop on HALF)

Action:  The options traded down to $3.45 yesterday so our Hard Stop on half hasn’t been triggered.  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.

 

Men’s Wearhouse (MW, $35.13, up $0.57)

June 31 puts (MW120616P00031000, $0.55, up $0.10)

June 37 calls (MW120616C00037000, $0.70, down $0.20)

Thoughts:  We wouldn’t expect Men’s Wearhouse to be hitting the ball out of the park but they have beaten estimates for 4-straight quarters.  This makes the options a risky trade betting on direction.  You can see the sharp selloffs and rallies on earning in the past from the chart below.

 

Facebook (FB, $26.90, down $0.82)

August 38 calls (FB120818C00038000, $0.40, down $0.10)

August 20 puts (FB120818P00020000, $0.80, up $0.15)

August 28 calls (FB120818C00028000, $2.65, down $0.45)

August 28 puts (FB120818P00028000, $3.90, up $0.40)

Thoughts:  Price targets range from $9 to $49 and we will be trading Facebook down the road.  For now we are just waiting and being patient. 

 

Newmont Mining (NEM, $51.55, up $1.25)

June 52.50 calls (NEM120616C00052500, $0.90, up $0.25)

July 55 calls (NEM120721C00055000, $1.40, up $0.30)

September 60 calls (NEM120922C00060000, $1.35, up $0.25)

Thoughts:  The break above the 50-day MA was clearly bullish for Newmont Mining and the 200-day MA is north of $58.  We believe shares can make a run back to $60, possibly $65 by mid-September.

 

Spider Gold Shares (GLD, $157.32, down $0.18)

December 185 calls (GLD121231C00185000, $4.20, down $0.20)

June 165 calls (GLD120629C00165000, $1.30, down $0.30)

Thoughts:  Watch for now.

 

Apache (APA, $79.56, up $0.19)

July 72.50 puts (APA120721P00072500, $2.05, down $0.25)  

Thoughts:  Our near-term target is for a test down to $75 and longer-term a move below $70 could be in mix.    

 

Schlumberger (SLB, $62.21, up $0.14)

July 57.50 (SLB120721P00057500, $1.95, down $0.15)

August 55 puts (SLB120818P00055000, $2.10, flat)

Thoughts:  Shares easily look like they are headed below $60 over the near-term. 

 

PowerShares QQQ (QQQ, $60.87, up $0.46)

June 62 puts (QQQ120616P00062000, $1.90, down $0.30)

July 58 puts (QQQ120721P00058000, $1.35, down $0.25)

Thoughts:  Watch for now.

 

iShares Russell 2000 (IWM, $73.65, down $0.17)              

June 75 puts (IWM120616P00075000, $2.45, flat)    

July 67 puts (IWM120721P00067000, $1.30, down $0.10)

Thoughts:  Watch for now.

 

Potash (POT, $37.44, down $0.09)       

July 35 puts (POT120721P00035000, $1.25, flat)

July 33 puts (POT120721P00033000, $0.75, flat)

Thoughts:  Near-term there could be a test to $35, longer-term, $30.