August 2012 | Members

Do not risk more than 5% of your trading account on any one trade but do try to take ALL of the trades.  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.

12:15pm (EST)

NEW TRADE!!!

Pepsi (PEP, $72.62, up $0.38)

Buy to OPEN September 75 calls (PEP120922C0007500, $0.15, up $0.05)

Buy to OPEN October 75 calls (PEP121020C00075000, $0.50, up $0.10)

Action:  We like both of these options and Pepsi is pushing new highs.

 

CURRENT TRADES

Riverbed Technology (RVBD, $20.68, up $0.81)

September 21 calls (RVBD120922C00021000, $1.15, up $0.40)

Entry Price:  $0.90 (8/16/12)
Exit Target:  $1.35-$1.80
Return:  28%
Stop Target:  None

Action:  We got a nice entry price this morning for the calls and we have a near-term target of $22.50 for Riverbed.  A move above this level would get $25 in play.

 

SanDisk (SNDK, $42.74, up $1.18)

September 43 calls (SNDK120922C00043000, $1.65, up $0.55)

Entry Price:  $0.89 (8/14/12)
Exit Target:  $1.35-$1.80 (closed half at $1.45 on 9/16/12)
Return:  74%
Stop Target:  $1.15 (HARD STOP)

Action:  Shares made a run at $42.50 and faded before building up steam to blow through resistance.  We wanted to close half to lock-in gains and we can still enjoy further gains if the calls continue higher.  The calls opened at $1.16 so we will set a HARD STOP of $1.15 on the other half.

 

Wynn Resorts (WYNN, $102.73, up $2.52)

September 80 puts (WYNN120922P00080000, $0.25, down $0.05)  

Entry Price:  $0.85 (8/2/12)
Exit Target:  $1.70
Return:  -71%
Stop Target:  None

Action:  We are going to move Wynn to the “Hold” section for now.  We mentioned there would be some short-term pain and there is no need in selling the options at these levels just to get out of the trade.  We still believe Wynn will tank by mid-September.

We have seen options lose 80% of their value and come back to hand us a profit.  Our last APOL trade we closed at the beginning of the month was down 70% at one point and we ended up banking 67%.  Remember we don’t carry stops on options under $1 and the options are still holding up well despite today’s pop in the stock. 

If the market does we think it will do, we are going to need some downside protection in September.  We will cover the charts on Monday but you will see why we are still hesitating going “all-in” on a sustained rally.   

 

Veeco Instruments (VECO, $36.01, up $0.41)

September 30 puts (VECO120922P00030000, $0.35, down $0.10)

Entry Price:  $0.90 (8/2/12)
Exit Target:  $1.80
Return:  -61%
Stop Target:  None

Action:  Veeco rebounded slightly after trading up to $36.19 but shares closed below $36 which was what we wanted to see.

 

Apollo Group (APOL, $28.61, up $0.46) 

September 24 puts (APOL120922P00024000, $0.35, down $0.05)

Entry Price:  $1.10 (7/31/12)
Exit Target:  $2.20
Return:  -68%
Stop Target:  None

Action:  We will stick with the trade as long as $30 holds as we believe shares will test $20 over the near-term. 

 

Other 2012 Portfolio OPEN positions (8):  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.

 

AUGUST options expire this Friday!!!

 

iShares Dow Jones US Real Estate August 57 puts (from June 2012)  

AOL August 24 puts (from June 2012)  

Consumer Discret Select Spiders August 41 puts (from June 2012)

Freeport McMoRan Copper & Gold August 29 puts (from June 2012)

PowerShares QQQ August 59 puts (from June 2012)

 

Dow Jones Industrial Average Spiders September 119 puts (from July 2012)

S&P 500 Spiders September 123 puts (from July 2012)

 

Bank of America January 12.50 calls 2013 (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.

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

10:20am (EST)

NEW TRADE!!!

Riverbed Technology(RVBD, $20.25, up $0.38)

Buy to OPEN September 21 calls (RVBD120922C00021000, $0.90, up $0.15)

Action:  Use limit orders up to $1.00.

 

CURRENT TRADE

SanDisk (SNDK, $42.27, up $0.71)

September 43 calls (SNDK120922C00043000, $1.45, up $0.35)

Entry Price:  $0.89 (8/14/12)
Exit Target:  $1.35-$1.80
Return:  63%
Stop Target:  None

Action:  Close HALF of the trade at current levels.

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

9:00am (EST)

The company reported an operating profit of $2.5 billion, or 47 cents a share, on revenue of $11.7 billion.  The suit-and-ties were looking for 45 cents a share on sales of $11.6 billion.  Even better, Cisco raised its quarterly dividend 75% to 14 cents a share, up from 8 cents a share.

The current yield on Cisco’s stock is just under 2% but with the dividend increase the yield is now north of 3% based on yesterday’s closing price.  This will attract more buyers after a solid quarter.

Shares were up 5% in extended-trading last night to over $18 and it appears those gains will hold.  The stock is up $1.25 to $18.60 in pre-market action this morning.

As far as futures, they are up as we head to press.  Dow futures are up 25 points to 13,160 while the S&P 500 futures are higher by 2 points to 1,405.  The Nasdaq 100 futures are advancing 6 points to 2,744.

 

Do not risk more than 5% of your trading account on any one trade but do try to take ALL of the trades.  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.

 

SanDisk (SNDK, $41.56, up $1.03)

September 43 calls (SNDK120922C00043000, $1.10, up $0.40)

Entry Price:  $0.89 (8/14/12)
Exit Target:  $1.35-$1.80
Return:  40%
Stop Target:  None

Action:  Shares traded to a high of $42.25 yesterday while the options reached $1.30.  We were trying to close half of the trade at $1.35 or better but our limit orders didn’t trigger.  We should be able to get out of this trade this morning with a higher pop if the Cisco news carries over.  We may send out a Trade Alert shortly after the open so stay locked-and-loaded in case we atke action.  If not, we will update the trade at 1pm.

 

Wynn Resorts (WYNN, $100.21, up $0.67)

September 80 puts (WYNN120922P00080000, $0.30, flat)  

Entry Price:  $0.85 (8/2/12)
Exit Target:  $1.70
Return:  -65%
Stop Target:  None

Action:  Wynn closed back over $100 after reaching a peak of $100.50.  We still have over a month to go on the puts and once $95 is cracked, the downside slide to $80 will come.  We have seen options lose 80% of their value and come back to hand us a profit and remember we don’t carry stops on options under $1.  If the market does we think it will do, we are going to need some downside protection in September and we still believe in this trade.      

 

Veeco Instruments (VECO, $35.60, up $0.43)

September 30 puts (VECO120922P00030000, $0.45, down $0.20)

Entry Price:  $0.90 (8/2/12)
Exit Target:  $1.80
Return:  -50%
Stop Target:  None

Action:  Veeco rebounded slightly after trading up to $36.19 but shares closed below $36 which was what we wanted to see.

 

Apollo Group (APOL, $28.15, up $0.10) 

September 24 puts (APOL120922P00024000, $0.40, down $0.05)

Entry Price:  $1.10 (7/31/12)
Exit Target:  $2.20
Return:  -59%
Stop Target:  None

Action:  Shares traded to a low of $27.30 yesterday but closed just above $28.  We will stick with the trade as long as $30 holds as we believe shares will test $20 over the near-term. 

 

Other 2012 Portfolio OPEN positions (8):  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.

 

AUGUST options expire this Friday!!!

iShares Dow Jones US Real Estate August 57 puts (from June 2012)  

AOL August 24 puts (from June 2012)  

Consumer Discret Select Spiders August 41 puts (from June 2012)

Freeport McMoRan Copper & Gold August 29 puts (from June 2012)

PowerShares QQQ August 59 puts (from June 2012)

 

Dow Jones Industrial Average Spiders September 119 puts (from July 2012)

S&P 500 Spiders September 123 puts (from July 2012)

 

Bank of America January 12.50 calls 2013 (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. 

 

Riverbed Technology (RVBD, $19.87, up $0.62)

September 21 calls (RVBD120922C00021000, $0.75, up $0.15)

Thoughts:  This is an old favorite name we use to play a lot.  Shares could be headed to $25 if Tech continues to roll.

 

Harris Group (HRS, $45.87, up $0.29)

September 45 calls (HRS120922C00045000, $1.35, down $0.05)

September 50 calls (HRS120922C00050000, $0.10, flat)

Thoughts:  Harris Group hit a 52-week high of $45.99 yesterday.  Shares could make a run at $50 but resistance at $46 has been hard to crack twice this year.

 

Pepsi (PEP, $72.62, up $0.38)

September 72.50 calls (PEP120922C00072500, $0.80, up $0.15)

January (2013) 75 calls (PEP130119C00075000, $1.10, up $0.10)

Thoughts:  Pepsi is still pushing 52-week highs as shares reached $72.68 yesterday.  A run to $80 could be in the cards if support at $70, which was prior resistance, holds.  If you buy any of the aforementioned calls, use $67.50 as a stop.  We like the January 75 calls the most and if we make an official recommendation this week we will send out a Trade Alert.

 

Taiwan Semiconductor Manufacturing (TSM, $14.42, up $0.02)

January 15 calls (TSM130119C00015000, $0.5, up $0.05)

Thoughts:  We said we would wait for a move above $14.50 but let’s make it $14.75 to be safe if we do decide to add these call options.

 

Buffalo Wild Wings (BWLD, $73.48, up $1.07)

September 80 calls (BWLD120922C00075000, $0.60, up $0.15)

September 65 puts (BWLD120922P00065000, $0.60, down $0.20)

Thoughts:  In late July, the stock fell from $78.90 to $70.43 the day after the company reported earnings and traded down to $68.71 intraday.  The recovery high was $75.01 which is near-term resistance.  This is the level we will need to watch for a bullish breakout and buy calls. A move below $70 would suggest we use put options for a possible test down to $65-$60.  If shares can clear their 50-day MA there is a chance for a quick run to $80. 

 

Dillard’s (DDS, $74.19, up $0.28)

September 65 puts (DDS120922P00065000, $0.60, down $0.10)

Thoughts:  Continue to watch.

 

Broadcom (BRCM, $34.71, up $0.30)

September 36 calls (BRCM120922C00036000, $0.65, up $0.10)

September 32 puts (BRCM120922P00032000, $0.40, down $0.10)

Thoughts:  The 52-week high is $39.66.  We would wait until shares clear $36 before going long and on a break below $34 we might look to go short.

 

Ingersoll-Rand (IR, $45.31, up $0.60)

September 42 puts (IR120922P00042000, $0.55, down $0.10)

September 46 calls (IR120922C00046000, $1.10, up $0.25)

Thoughts:  IR hits a 52-week high on Wednesday of $45.68 which we said was coming.  Shares could continue higher and make a run at $50 over the near-term but a drop below $41-$40 would be bearish.   

 

Akamai Technologies (AKAM, $36.80, up $1.36)

September 34 puts (AKAM120922P00034000, $0.50, down $0.30)

September 38 calls (AKAM120922C00038000, $0.95, up $0.45)

November 45 calls (AKAM121117C00045000, $0.70, up $0.25)

January 45 calls (AKAM130119C00045000, $1.20, up $0.30)

Action:  We said a close above $37 could lead to a test of the 52-week high of $39.14.  Yesterday’s high was $37.38.  If shares make a move past $40 it would represent blue-sky territory and a possible push to $45-$50.  A drop below $34 would be bearish and could lead to a test of $30.  We have also listed the January and November 45 calls on a possible run to $50 and would give us an additional 2-4 months to play a breakout.

 

KLA-Tencor (KLAC, $52.55, up $0.26)

September 55 calls (KLAC120922C00055000, $0.60, up $0.10)

September 50 puts (KLAC120922P00050000, $0.75, down $0.10)

Thoughts:  We said early last week it might be time to get bullish if $50 continues to hold.  Shares look headed to double-nickels ($55) and a blue-sky breakout could be in the mix.  A move below $51-$50 would reverse the recent uptrend.