December 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 “New Trade” 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.  Closed Trades for 2012: 148-54, or 73% win rate, including the Weekly Wrap which is 26-0).

12:30pm (EST)

Southern Copper (SCCO, $38.16, up $0.39)

January 40 calls (SCCO130119C00040000, $0.50, up $0.10)

Entry Price:  $0.45 (12/14/12)
Exit Target:  $1.00
Return:  11%
Stop Target:  None 

Action:  We will have the chart on Monday but we have a price target of $41-$42 over the near-term.

 

Akamai Technologies (AKAM, $39.19, up $0.10)

January 42 calls (AKAM130119C00042000, $0.56, flat)

Entry Price:  $0.56 (12/14/12)
Exit Target:  $1.15
Return:  0%
Stop Target:  None

Action:  We are looking for the stock to make a push to the mid-$40’s by yearend.

 

MGM Resorts International (MGM, $11.49, up $0.06)

January 11 calls (MGM130119C00011000, $0.75, flat)

Entry Price:  $0.51 (12/11/12)
Exit Target:  $1.00
Return:  47%
Stop Target:  55 cents

Action:  We are looking for a close above $11.50 today.  Our near-term target is $12 which would get these calls to at least $1 for a double.

 

American Express (AXP, $56.88, down $0.84)

January 57.50 calls (AXP130119C00057500, $1.05, down $0.35)

Entry Price:  $1.00 (12/10/12)
Exit Target:  $2.00
Return:  20%
Stop Target:  $1.20 (Hard Stop) 

Action:  Our Hard Stop of $1.20 was hit shortly after the opening bell.  The options opened at $1.31 and are session lows.  We would love to see shares come back down to $55 and we will keep the stock on our Watch List for a rentry point.

 

TiVo (TIVO, $12.70, up $0.27)   

January 12.50 calls (TIVO130119C00012500, $0.85, up $0.15) 

Entry Price:  $0.60 (12/7/12)
Exit Target:  $1.20
Return:  42%
Stop Target:  60 cents

 

May 14 calls (TIVO130518C00014000, $1.00, up $0.10) 

Entry Price:  $0.68 (12/7/12)
Exit Target:  $1.30
Return:  47%
Stop Target:  70 cents

Action:  Goldman upgraded shares of TiVo with a $15 price target which was a buck behind ours.  A close above $12.75 would be bullish for a possible run to $16.  Support has been super strong at $10.  We recommended the January calls to play the near-term possible breakout and we went with the May calls for the possibility of a buyout. 

  

Taser International (TASR, $7.69, flat) 

January 10 calls (TASR130119C00010000, $0.05, flat)

Entry Price:  $0.15 (11/29/12)
Exit Target:  $0.45
Return:  -67%
Stop Target:  None

 

March 10 calls (TASR130316C00010000, $0.25, flat)

Entry Price:  $0.30 (11/29/12)
Exit Target:  $0.50
Return:  -17%
Stop Target:  None 

Action:  Shares traded down to $7.51 and support at $7.50 held.  We have mentioned Taser’s stock can be effected by lawsuits but they have a good history of defending them.  Yesterday’s winning verdict was another example but the headline risk knocked shares back 3%.  We would like to see back above $8 today.

 

Vivus (VVUS, $11.65, up $0.10) 

January 15 calls (VVUS130119C00015000, $0.35, down $0.05)

Entry Price:  $0.65 (11/21/12)
Exit Target:  $1.30
Return:  -46%
Stop Target:  None

Action:  We are looking for a close back above $12 over the near-term.  Support has been strong at $10.

  

Rosetta Stone (RST, $12.22, down $0.21)

January 15 calls (RST130119C00015000, $0.15, flat) 

Entry Price:  $0.20 (11/19/12)
Exit Target:  $1.00
Return:  -25%
Stop Target:  None 

Action:  We will stick with the trade as long as $11.50 holds.  We would like to see a close back above $12.50 today.

 

Knight Capital Group (KCG, $3.27, flat)

January 2.50 calls (KCG130119C00002500, $0.80, flat)

Entry Price:  $0.55 (8/21/12)
Exit Target:  $1.10
Return:  45%
Stop Target:  65 cents 

Action:  The current buyout offer is $3.50 but we expect a final price north of $4 by mid-January.  This would make these options worth at least $1.50 minimum for a juicy triple-digit return.  Shares will remain in a tight range until another offer surfaces.

 

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.

Bank of America January 12.50 calls (2013) (from March 2012) – continue to hold

Solazyme December 12.50 calls (from September 2012)– continue to hold

Lufkin Industries December 45 puts (from November 2012) – half position open

LifeLock December 10 calls (from November 2012)– continue to hold

Monster Beverage January 35 puts (from November 2012)– continue to hold

Apollo Group December 18 puts (from October 2012) – continue to hold

 

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 on Monday.

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10:45am (EST)

Southern Copper (SCCO, $37.97, up $0.20)

Buy to OPEN January 40 calls (SCCO130119C00040000, $0.45, up $0.05)

Action:  Use limit orders up to 50-55 cents but do not pay over 60 cents to establish positions.

 

Akamai Technologies (AKAM, $39.25, up $0.16) 

Buy to OPEN January 42 calls (AKAM130119C00042000, $0.56, flat)

Action:  Use limit orders up to 60-65 cents but do not pay over 70 cents to establish positions.

 

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9:00am (EST)

MGM Resorts International (MGM, $11.43, up $0.11)  

January 11 calls (MGM130119C00011000, $0.75, up $0.10) 

Entry Price:  $0.51 (12/11/12)
Exit Target:  $1.00
Return:  47%
Stop Target:  55 cents 

Action:  Shares reached a high of $11.49 yesterday and we were looking for a close above $11.50.  Our near-term target is $12 which would get these calls to at least $1 for a double.

  

American Express (AXP, $57.72, up $0.05) 

January 57.50 calls (AXP130119C00057500, $1.40, flat) 

Entry Price:  $1.00 (12/10/12)
Exit Target:  $2.00
Return:  40%
Stop Target:  $1.10, raise to $1.20 (Hard Stop) 

Action:  Shares reached a peak of $58 on Thursday and we have a near-term target of $60.  The options traded to a low of $1.33 yesterday and we have raised the Hard Stop to $1.20.  Support is at double-nickels ($55).

 

TiVo (TIVO, $12.43, down $0.05)   

January 12.50 calls (TIVO130119C00012500, $0.70, down $0.10) 

Entry Price:  $0.60 (12/7/12)
Exit Target:  $1.20
Return:  17%
Stop Target:  60 cents

  

May 14 calls (TIVO130518C00014000, $0.90, flat) 

Entry Price:  $0.68 (12/7/12)
Exit Target:  $1.30
Return:  32%
Stop Target:  70 cents 

Action:  TiVo traded to $12.66 before finishing slightly lower for the session.  A close above $12.75 would be bullish for a possible run to $16.  Support has been super strong at $10.  We recommended the January calls to play the near-term possible breakout and we went with the May calls for the possibility of a buyout. 

  

Dunkin’ Brands Group (DNKN, $32.03, down $0.19) 

January 32.50 calls (DNKN130119C00032500, $0.70, down $0.15)

Entry Price:  $0.45 (12/4/12)
Exit Target:  $1.00 (closed half at $0.90 on 12/12/12)
Return:  78%
Stop Target:  70 cents (Hard Stop) 

Action:  The Hard Stop of 70 cents on the other half of the trade was triggered after our midday update so we are out of the position.  We will keep the stock on our Watch List because there is still a chance $34 comes into play.

 

Taser International (TASR, $7.69, down $0.25) 

January 10 calls (TASR130119C00010000, $0.05, down $0.05) 

Entry Price:  $0.15 (11/29/12)
Exit Target:  $0.45
Return:  -67%
Stop Target:  None

 

March 10 calls (TASR130316C00010000, $0.25, down $0.05) 

Entry Price:  $0.30 (11/29/12)
Exit Target:  $0.50
Return:  -17%
Stop Target:  None 

Action:  Shares traded down to $7.51 and support at $7.50 held.  We have mentioned Taser’s stock can be effected by lawsuits but they have a good history of defending the.  Yesterday’s winning verdict was another example but the headline risk knocked shares back 3%.  We would like to see back above $8 today.

  

Vivus (VVUS, $11.55, down $0.20) 

January 15 calls (VVUS130119C00015000, $0.35, down $0.05) 

Entry Price:  $0.65 (11/21/12)
Exit Target:  $1.30
Return:  -46%
Stop Target:  None 

Action:  We are looking for a close back above $12 over the near-term.  Support has been strong at $10.

 

Rosetta Stone (RST, $12.43, up $0.04)

January 15 calls (RST130119C00015000, $0.15, flat)

Entry Price:  $0.20 (11/19/12)
Exit Target:  $1.00
Return:  -25%
Stop Target:  None 

Action:  We will stick with the trade as long as $11.50 holds.  We would like to see a close back above $12.50 today.

 

Knight Capital Group (KCG, $3.27, up $0.06) 

January 2.50 calls (KCG130119C00002500, $0.80, up $0.05) 

Entry Price:  $0.55 (8/21/12)
Exit Target:  $1.10
Return:  45%
Stop Target:  65 cents 

Action:  The current buyout offer is $3.50 but we expect a final price north of $4 by mid-January.  This would make these options worth at least $1.50 minimum for a juicy triple-digit return.  Shares will remain in a tight range until another offer surfaces.

 

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.

 

Bank of America January 12.50 calls (2013) (from March 2012) – continue to hold 

Solazyme December 12.50 calls (from September 2012)– continue to hold 

Lufkin Industries December 45 puts (from November 2012) – half position open 

LifeLock December 10 calls (from November 2012)– continue to hold 

Monster Beverage January 35 puts (from November 2012)– continue to hold 

Apollo Group December 18 puts (from October 2012) – continue to hold

  

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.

  

Freeport-McMoRan Copper & Gold (FCX, $32.48, down $0.04) 

January 34 calls (FCX130119C00034000, $0.67, down $0.06) 

Thoughts:  Shares could be headed to $36 over the near-term but could test $32.

  

Southern Copper (SCCO, $37.77, down $0.44)

January 39 calls (SCCO130119C00039000, $0.65, down $0.15) 

Thoughts:  We may start a half position in this trade next week but a double top could be forming if $36 doesn’t hold so we have to be careful. 

 

Akamai Technologies (AKAM, $39.09, down $0.88) 

January 42 calls (AKAM130119C00042000, $0.55, down $0.15) 

Thoughts:  We may be getting a great entry point and we may take action if there is another dip today. 

 

Dunkin’ Brands Group (DNKN, $32.03, down $0.19) 

January 32.50 calls (DNKN130119C00032500, $0.70, down $0.15) 

Thoughts:  Watch for now.

  

iShares Russell 2000 Index (IWM, $82.41, down $0.53) 

January 83 calls (IWM130119C00083000, $1.20, down $0.30) 

January 84 calls (IWM130119C00084000, $0.85, down $0.30) 

Thoughts:  We have talked about the small-caps leading the next leg higher and we like these calls to play the move.

 

Microsoft (MSFT, $27.11, down $0.13)

January 27 calls (MSFT130119C00027000, $0.75, down $0.05) 

January 28 calls (MSFT130119C00028000, $0.35, flat) 

Thoughts:  Shares could easily make a run back to $30 if Tech can breakout.

 

JPMorgan Chase (JPM, $42.78, up $0.01) 

January 44 calls (JPM130119C00044000, $0.70, flat) 

Thoughts:  The 52-week peak is at $46.49.  Support is at $40.

 

Nuance Communications (NUAN, $21.86, down $0.38) 

January 23 calls (NUAN130119C00023000, $0.40, down $0.25) 

Thoughts:  There is a good chance shares trade to $25 once $22.50 and the 50-day and 100-day MA’s are cleared.  Short-term support is at $21.50 followed by $20.

  

Cree (CREE, $33.51, down $0.70)   

January 35 calls (CREE130119C00035000, $1.15, down $0.30)

Thoughts:  Shares are near 52-week highs and there could be a push to $40 if momentum sticks.