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.

12:10pm (EST)

NEW TRADES!!!

Knight Capital Group (KCG, $2.85, up $0.01)

Buy to OPEN January (2013) 2.50 call (KCG130119C00002500, $0.55, flat)

Action:  Use limit orders up to 60 cents but do not pay more than 65-70 cents to open positions.

The company recently lost $440 million in a trading software snafu which required some of the big boys to take a stake in the company so that it could be saved.  We are hearing trading levels at Knight are back to normal as the firm is first or second in its sector.  This is a possible “lottery” play on shares trading back to $4 or $5 and overall volume picking back up in the market once the suit-and-ties come back from their August vacations.

 

WellPoint (WLP, $57.80, up $0.42)

Buy to OPEN September 60 calls (WLP120922C00060000, $0.70, up $0.05)

Action:  Use limit orders up to 75 cents but do not pay more than 80-85 cents to establish positions.  Shares appear to have bottomed since the beginning of the month and could be headed back to $60.  From there a test to $62-$63 could be in play.

 

CURRENT TRADES

Amgen (AMGN, $83.67, up $0.43)

September 85 calls (AMGN120922C00085000, $1.10, up $0.15)

Entry Price:  $0.80 (8/20/12)
Exit Target:  $1.50
Return:  38%
Stop Target:  85 cents

Action:  Amgen can push $90 on a break above $85.  We will exit the trade if shares dip below $80.  We have set a stop of 85 cents on the trade but it is not a hard stop.

 

Netflix (NFLX, $65.42, up $1.18)

September 70 calls (NFLX120922C00070000, $1.70, up $0.20)

Entry Price:  $1.15 (8/20/12)
Exit Target:  $2.00-$2.30 (closed half at $2.10 on 8/21/12)
Return:  65%
Stop Target:  $1.50 (Hard Stop on other half)

Action:  We closed half of the trade to lock-in profits and because Netflix is a volatile stock.  The calls opened at $1.62 and traded down to $1.56 before surging to a high of $2.15.  We have set a Hard Stop of $1.50 on the other half of the trade but we are still looking for shares to push $70.  If not, and shares slip, our Hard Stop will automatically take us out of the trade.

 

Fusion-io (FIO, $29.49, up $0.55)

September 30 calls (FIO120922C00030000, $1.40, up $0.05)

Entry Price:  $1.00 (8/17/12)
Exit Target:  $1.50-$2.00 (closed half at $1.60 on 8/21/12)
Return:  50%
Stop Target:  $1.10 (Hard Stop on other half)

Action:  Same deal here.  The calls opened at $1.20 and traded up to $1.65.  We have a Hard Stop of $1.10 on the other half of the trade.  We believe shares can still push $30 but just in case they don’t, we are protected with our Hard Stop. 

 

MGM Resorts (MGM, $10.56, down $0.04)

September 10 calls (MGM120922C00010000, $0.75, down $0.05)

Entry Price:  $0.70 (8/17/12)
Exit Target:  $1.05-$1.40
Return:  7%
Stop Target:  None

Action:  Close the trade at current levels. 

We are going to close this trade today because we wanted to look for faster moving trades.  We already own MGM shares for our Weekly Wrap and we can enjoy further gains should shares continue higher but let’s take our small profit which we are rolling into other new trades.

 

Pepsico (PEP, $73.23, down $0.10)

September 75 calls (PEP120922C0007500, $0.20, flat)

Entry Price:  $0.15 (8/16/12)
Exit Target:  $0.30
Return:  33%
Stop Target:  None

October 75 calls (PEP121020C00075000, $0.55, down $0.05)

Entry Price:  $0.50 (8/16/12)
Exit Target:  $1.00
Return:  10%
Stop Target:  None

Action:  Close the September calls at current levels.

        

Veeco Instruments (VECO, $34.95, up $1.11)

September 30 puts (VECO120922P00030000, $0.45, down $0.15)

Entry Price:  $0.90 (8/2/12)
Exit Target:  $1.35-$1.80
Return:  -50%
Stop Target:  None

Action:  Continue to hold.

 

Other 2012 Portfolio OPEN positions (5):  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.

 

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

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

Wynn Resorts September 80 puts (from August 2012)  

Apollo Group September 24 puts (from August 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.

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10:55am (EST)

Netflix (NFLX, $66.58, up $2.34)

September 70 calls (NFLX120922C00070000, $2.10, up $0.60)

Entry Price:  $1.15 (8/20/12)
Exit Target:  $2.00-$2.30
Return:  83%
Stop Target:  60 cents

Action:  Close HALF trade at current levels.

 

Fusion-io (FIO, $29.57, up $0.63)

September 30 calls (FIO120922C00030000, $1.60, up $0.25)

Entry Price:  $1.00 (8/17/12)
Exit Target:  $1.50-$2.00
Return:  60%
Stop Target:  None

Action:  Close HALF the trade at current levels.

 

Riverbed Technology (RVBD, $21.04, up $0.07)

September 21 calls (RVBD120922C00021000, $1.10, flat)

Entry Price:  $0.90 (8/16/12)
Exit Target:  $1.35-$1.80
Return:  22%
Stop Target:  90 cents

Action:  Close the trade at current levels.  We were expecting more of a pop from Riverbed given today’s surge to new highs on the S&P.      

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

9:00am (EST)

Amgen (AMGN, $83.24, down $0.14)

September 85 calls (AMGN120922C00085000, $0.95, down $0.15)

Entry Price:  $0.80 (8/20/12)
Exit Target:  $1.50
Return:  19%
Stop Target:  None

Action:  Amgen can push $90 on a break above $85.  We will exit the trade if shares dip below $80.

 

Netflix (NFLX, $64.24, up $0.55)

September 70 calls (NFLX120922C00070000, $1.50, up $0.15)

Entry Price:  $1.15 (8/20/12)
Exit Target:  $2.00-$2.30
Return:  30%
Stop Target:  60 cents

Action:  Netflix traded to a low of $62.16 which was right on its uptrend line so we decided to start positions.  A move past $65 would be bullish and could set the stage for a possible push to $70+.  Yesterday’s high was $65.35 as the options reached a high of $1.79.  If shares fall below $60 we will exit the trade.

 

Fusion-io (FIO, $28.94, up $0.56)

September 30 calls (FIO120922C00030000, $1.35, up $0.25)

Entry Price:  $1.00 (8/17/12)
Exit Target:  $1.50-$2.00
Return:  35%
Stop Target:  None

Action:  We have a near-term target of $30 for shares of Fusion-io and a break above this level could lead to a test to $33-$34.  Near-term support is at $26.  We have set a stop of $1.05 on the position to protect profits but it is not a Hard Stop.

 

MGM Resorts (MGM, $10.60, up $0.08)

September 10 calls (MGM120922C00010000, $0.80, up $0.05)

Entry Price:  $0.70 (8/17/12)
Exit Target:  $1.05-$1.40
Return:  14%
Stop Target:  None

Action:  Shares traded to a high of $10.77 yesterday.  The next wave of resistance will come at $11.50 and the 100-day MA.  MGM will soar once an online poker bill is passed.

 

Pepsico (PEP, $73.33, down $0.06)

September 75 calls (PEP120922C0007500, $0.20, down $0.05)

Entry Price:  $0.15 (8/16/12)
Exit Target:  $0.30
Return:  33%
Stop Target:  None

October 75 calls (PEP121020C00075000, $0.60, down $0.05)

Entry Price:  $0.50 (8/16/12)
Exit Target:  $1.00
Return:  20%
Stop Target:  None

Action:  Share tested support yesterday just under $73 which was the prior 52-week high.  We are looking for $73 to hold and we have a near-term price of $75 with a shot at $78-$80 if cleared.  We will exit the trade if shares fall below $72.

 

Riverbed Technology (RVBD, $20.97, down $0.12)

September 21 calls (RVBD120922C00021000, $1.10, down $0.15)

Entry Price:  $0.90 (8/16/12)
Exit Target:  $1.35-$1.80
Return:  22%
Stop Target:  90 cents

Action:  Shares traded to a low of $20.74 on Monday while the options touched a low of $1.03.  We have a near-term target of $23-$24 which is short-term resistance but momentum could carry shares to $30. 

 

Veeco Instruments (VECO, $33.84, down $2.31)

September 30 puts (VECO120922P00030000, $0.60, up $0.30)

Entry Price:  $0.90 (8/2/12)
Exit Target:  $1.35-$1.80
Return:  -33%
Stop Target:  None

Action:  This trade was made a nice comeback yesterday so we are bringing back coverage.  Shares fell over 6% on Monday as the options gained 50%.  We are still down on this trade but we think shares could fall below $30 by mid-September.

 

Other 2012 Portfolio OPEN positions (5):  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.

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

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

Wynn Resorts September 80 puts (from August 2012)  

Apollo Group September 24 puts (from August 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.

 

Knight Capital Group (KCG, $2.84, down $0.07)

January (2013) 2.50 call (KCG130119C00002500, $0.55. down $0.10)

January 4 calls (KCG130119C00004000, $0.15, flat)

Thoughts:  This is a possible “lottery” play on shares trading back to $4 or $5.

 

WellPoint (WLP, $57.38, up $0.12)

September 60 calls (WLP120922C00060000, $0.60, down $0.05)

Thoughts:  Shares appear to have bottomed since the beginning of the month and appear headed back to $60.  From there a test to $62-$63 could be in play.

 

Taiwan Semiconductor Manufacturing (TSM, $14.50, up $0.10)

January 15 calls (TSM130119C00015000, $0.75, up $0.05)

Thoughts:  We are waiting for a close above $14.75 before possibly going long.

 

Buffalo Wild Wings (BWLD, $74.65, up $0.43)

September 80 calls (BWLD120922C00075000, $0.55, up $0.05)

September 65 puts (BWLD120922P00065000, $0.40, down $0.10)

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. 

 

Broadcom (BRCM, $35.72, down $0.11)

September 36 calls (BRCM120922C00036000, $0.95, down $0.10)

September 32 puts (BRCM120922P00032000, $0.20, down $0.05)

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, $46.67, up $0.27)

September 42 puts (IR120922P00042000, $0.25, down $0.05)

September 46 calls (IR120922C00046000, $1.50, up $0.10)

Thoughts:  Shares continue to appear they are headed to $50.   

 

Akamai Technologies (AKAM, $37.05, down $0.50)

September 34 puts (AKAM120922P00034000, $0.30, up $0.05)

September 38 calls (AKAM120922C00038000, $0.85, down $0.30)

November 45 calls (AKAM121117C00045000, $0.65, down $0.15)

January 45 calls (AKAM130119C00045000, $1.20, down $0.20)

Action:  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-$55 and would give us an additional 2-4 months to play a breakout.

 

KLA-Tencor (KLAC, $53.30, down $0.04)

September 55 calls (KLAC120922C00055000, $0.80, down $0.05)

September 50 puts (KLAC120922P00050000, $0.50, down $0.05)

Thoughts:  Shares look headed to double-nickels ($55) and a blue-sky breakout could be in the mix.  A move below $52 would reverse the recent uptrend.