December 2012 |

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).

12:10pm (EST)

NEW TRADE!!!

MGM Resorts International (MGM, $11.05, dowup $0.14)

Buy to OPEN January 11 calls (MGM130119C00011000, $0.51, up $0.02)

Action:  Use limit orders up to 55 cents but do not pay over 60-65 cents to establish positions. 

 

CURRENT TRADES

American Express (AXP, $57.53, up $0.78)

January 57.50 calls (AXP130119C00057500, $1.35, up $0.30)

Entry Price:  $1.00 (12/10/12)
Exit Target:  $2.00
Return:  35%
Stop Target:  50 cents, raise to $1

Action:  We have a near-term target of $60 for the stock which will get these options to $2.50 if reached.  Support is at double-nickels ($55).  We have raised the stop target to $1 but it is not a Hard Stop.

 

TiVo (TIVO, $12.135, up $0.23)  

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

Entry Price:  $0.60 (12/7/12)
Exit Target:  $1.20
Return:  17%
Stop Target:  None

 

May 14 calls (TIVO130518C00014000, $0.80, up $0.05)

Entry Price:  $0.68 (12/7/12)
Exit Target:  $1.30
Return:  18%
Stop Target:  None

Action:  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, $31.75, up $0.32)

January 32.50 calls (DNKN130119C00032500, $0.65, up $0.05)

Entry Price:  $0.45 (12/4/12)
Exit Target:  $1.00+
Return:  44%
Stop Target:  None

Action:  We are expecting a run to $32.50 this week with a chance of $34 coming into play by yearend.  The stock has a decent short float and a continued move higher could force some of those traders out.  There is a chance shares test $38 on a close above these resistance levels.  

 

Taser International (TASR, $8.24, up $0.04)

January 10 calls (TASR130119C00010000, $0.15, flat)

Entry Price:  $0.15 (11/29/12)
Exit Target:  $0.45
Return:  0%
Stop Target:  None

 

March 10 calls (TASR130316C00010000, $0.35, flat)

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

Action:  A close over $9 would be bullish for a run to $10.  Support is at $8 followed by $7.50.

 

Vivus (VVUS, $11.53, up $0.59)

January 15 calls (VVUS130119C00015000, $0.40, up $0.10)

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.  Support has been strong at $10 but a close below $9.86 and the mid-November low will force us out of the trade.

 

Rosetta Stone (RST, $12.35, up $0.15)

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, $59.88, up $0.17)

December 60 calls (HCN121222C00060000, $0.60, flat)

Entry Price:  $1.00 (11/19/12)
Exit Target:  $2.00
Return:  -40%
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.   

 

Knight Capital Group (KCG, $3.22, down $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:  None

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 in the morning.