9:00am (EST)

The Dow dipped 3 points, or 0.02%, to close at 13,245.  The blue-chips kissed a high of 13,329 and was just 21 points away from clearing our next bullish target of 13,350.  The index had been up for 5-straight sessions and will try to hold 13,200 if there is a pullback. 

The S&P 500 added a point, or 0.04%, to settle at 1,428.  The index held 1,425 after trading up to 1,438 but couldn’t hold 1,434 which is confirmation for a trip to 1,450.  If there is further slippage, watch 1,420 and then 1,410 to see if traders are buying the dips.  

The  Nasdaq fell 8 points, or 0.3%, to finish at 3,013. Tech reached a peak of 3,035 but didn’t have enough strength to clear 3,050.  Support at 3,000 held as the low came in at 3,008.

Considering the week’s strong move past resistance and the 50-day MA’s (moving averages), yesterday’s pullback can be viewed as “healthy”.  However, we realize the indexes are walking on egg shells as the zombies march us closer to the Cliff so we are watching any pullback carefully.

As we head to press, futures are mixed and look like this:  Dow (+8); S&P 500 (-1); Nasdaq 100 (-2).

We were able to lock-in profits yesterday on one of current trades and there are others that are showing nice gains.  We have initiated a few Hard Stops for some of them to protect profits so please all trade instructions carefully

 

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).

  

MGM Resorts International (MGM, $11.33, up $0.40) 

January 11 calls (MGM130119C00011000, $0.65, up $0.18) 

Entry Price:  $0.51 (12/11/12)
Exit Target:  $1.00
Return:  27%
Stop Target:  55 cents 

Action:  MGM traded up to $11.44 yesterday and we would like to see a close above $11.50 today.  We are looking for shares to make a near-term run to $12 which would get these calls to at least $1.

 

American Express (AXP, $57.67, up $0.61) 

January 57.50 calls (AXP130119C00057500, $1.40, up $0.20) 

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

Action:  Shares reached a peak of $58.35 yesterday and we have a near-term target of $60.  This will get these options to $2.50 if reached.  Support is at double-nickels ($55).

 

TiVo (TIVO, $12.48, up $0.08)  

January 12.50 calls (TIVO130119C00012500, $0.80, up $0.05) 

Entry Price:  $0.60 (12/7/12)
Exit Target:  $1.20
Return:  33%
Stop Target:  60 cents

  

May 14 calls (TIVO130518C00014000, $0.90, up $0.05) 

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

Action:  TiVo kissed $12.65 before fading.  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, $32.22, up $0.11) 

January 32.50 calls (DNKN130119C00032500, $0.85, up $0.05) 

Entry Price:  $0.45 (12/4/12)
Exit Target:  $1.00 (closed half at $0.90 on 12/12/12)
Return:  94%
Stop Target:  70 cents (Hard Stop) 

Action:  We closed half of the trade yesterday to lock-in profits.  We have set a Hard Stop of 70 cents on the other half of the position.  Shares traded to a high of $32.46 and our near-term target has been $32.50 which is why we also closed half.  There is still a chance $34 triggers if this level is cleared but if shares start to fade we will ring the register on the other half of the trade.

  

Taser International (TASR, $7.94, down $0.28) 

January 10 calls (TASR130119C00010000, $0.10, down $0.05) 

Entry Price:  $0.15 (11/29/12)
Exit Target:  $0.45
Return:  -33%
Stop Target:  None

  

March 10 calls (TASR130316C00010000, $0.30, down $0.05) 

Entry Price:  $0.30 (11/29/12)
Exit Target:  $0.50
Return:  0%
Stop Target:  None

Action:  A close over $8.50 could be bullish for a run to $10.  Support is at $8 followed by $7.50.

 

Vivus (VVUS, $11.90, up $0.45) 

January 15 calls (VVUS130119C00015000, $0.40, flat) 

Entry Price:  $0.65 (11/21/12)
Exit Target:  $1.30
Return:  -38%
Stop Target:  None

Action:  We are looking for a close back above $12 over the near-term and shares reached $12.09 on Wednesday.  Support has been strong at $10.

  

Rosetta Stone (RST, $12.39, down $0.01) 

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 this week.

 

HealthCare REIT (HCN, $59.53, down $0.30) 

December 60 calls (HCN121222C00060000, $0.40, down $0.15)

Entry Price:  $1.00 (11/19/12)

Exit Target:  $2.00

Return:  -60%
Stop Target:  None

Action:  We have said a close below $58.50 would force us out but support is holding.  Our breakeven target is technically $61 as these calls are out-of the money.  We have seen a few trade just like this in 2012 and sometimes a profit might not come until the last day before expiration.  If shares are over $60 during our midday update we will likely leave trade open.  If not, we may close it.

 

Knight Capital Group (KCG, $3.21, up $0.02) 

January 2.50 calls (KCG130119C00002500, $0.75, 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.

 

Freeport-McMoRan Copper & Gold (FCX, $32.52, up $0.53) 

January 34 calls (FCX130119C00034000, $0.73,up $0.13) 

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

  

Southern Copper (SCCO, $38.21, down $0.23) 

January 39 calls (SCCO130119C00039000, $0.80, down $0.10 

Thoughts:  We would like to get these options for under 70 cents but a double top could be forming if $36 doesn’t hold so we have to be careful. 

  

Akamai Technologies (AKAM, $39.97, up $0.37) 

January 41 calls (AKAM130119C00041000, $1.15, up $0.05) 

Thoughts:  Shares traded up to $40.61 before finishing below $40.  It was a 52-week high and we believe shares could trade to $60 in 2013.

 

LinkedIn (LNKD, $112.64, down $0.81)

January 120 calls (LNKD130119C00120000, $1.90, down $0.30) 

December 115 calls (LNKD121222C00115000, $1.35, down $0.50) 

Thoughts:  Shares pushed $115 before slipping. 

 

iShares Russell 2000 Index (IWM, $82.94, down $0.47)

January 83 calls (IWM130119C00083000, $1.50, down $0.30) 

January 84 calls (IWM130119C00084000, $1.15, down $0.15) 

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

 

Microsoft (MSFT, $27.24, down $0.08) 

January 27 calls (MSFT130119C00027000, $0.80, down $0.10) 

January 28 calls (MSFT130119C00028000, $0.35, down $0.05) 

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

   

Sarepta Therapeutics (SRPT, $25.44, down $0.48) 

January 30 calls (SRPT130119C00030000, $1.40, down $0.20)

January 20 puts (SRPT130119P00020000, $0.75, flat) 

Thoughts:  This is a very volatile stock but we believe a run past $30 is coming.  There is risk down to $21.  These options are expensive and the bid/ask is wide making this a hard trade to pin.  We likely won’t take action because of this but we will watch the stock for clues.

  

JPMorgan Chase (JPM, $42.77, up $0.13) 

January 44 calls (JPM130119C00044000, $0.65, flat) 

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

  

Nuance Communications (NUAN, $22.24, down $0.18) 

January 23 calls (NUAN130119C00023000, $0.60, down $0.10)

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. 

 

Intel (INTC, $20.67, up $0.02) 

January 20 calls (INTC130119C00020000, $1.10, flat) 

March 20 calls (INTC130316C00020000, $1.35, flat) 

Thoughts:  We are hearing good things about Intel’s new mobile chip which is being ramped up 2013 to compete with Qualcomm.  A run to $21 could be in the mix over the near-term if $19.50 holds.

 

Cree (CREE, $34.21, down $0.48)   

December 33 calls (CREE121222C00033000, 1.50, down $0.50) 

January 34 calls (CREE130119C00034000, $1.90, down $0.25) 

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