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: 150-55, or 73% win rate, including the Weekly Wrap which is 26-0).

12:30pm (EST)

JPMorgan Chase (JPM, $43.56, up $0.08)

January 45 calls (JPM130119C00045000, $0.60, up $0.05)

Entry Price:  $0.65 (12/18/12)
Exit Target:  $1.30
Return:  -8%
Stop Target:  None 

Action:  The 52-week high is at $46.49 and we are expecting a push to $48 by mid-January.

 

Nuance Communications (NUAN, $22.81, up $0.49)   

January 24 calls (NUAN130119C00024000, $0.40, up $0.15)

Entry Price:  $0.35 (12/18/12)
Exit Target:  $0.70
Return:  14%
Stop Target:  None

Action:  Use limit orders up to 40-45 cents but do not pay over 50 cents to establish positions.

 

Southern Copper (SCCO, $38.15, down $0.08)

January 40 calls (SCCO130119C00040000, $0.50, flat) 

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

Action:  The 52-week high is $39.44 set at the beginning of November and we would like to see a close above $40 this week.  We are going to have a tight stop for this trade and may close it if shares fail to hold $37.

 

Akamai Technologies (AKAM, $40.55, up $1.09)

January 42 calls (AKAM130119C00042000, $0.85, up $0.25)

Entry Price:  $0.56 (12/14/12)
Exit Target:  $1.15
Return:  52%
Stop Target:  None

Action:  The 52-week high is $40.61 and we would love to see a close above this level today.

  

MGM Resorts International (MGM, $11.57, up $0.15)

January 11 calls (MGM130119C00011000, $0.85, up $0.15)

Entry Price:  $0.51 (12/11/12)
Exit Target:  $1.00
Return:  67%
Stop Target:  60 cents (Hard Stop)

Action:  We would like to see a close above $11.75 this week.

 

TiVo (TIVO, $12.78, up $0.03)  

January 12.50 calls (TIVO130119C00012500, $0.85, flat)

Entry Price:  $0.60 (12/7/12)
Exit Target:  $1.20
Return:  42%
Stop Target:  60 cents, raise to 70 cents (Hard Stop)

 

May 14 calls (TIVO130518C00014000, $1.05, flat)

Entry Price:  $0.68 (12/7/12)
Exit Target:  $1.30
Return:  54%
Stop Target:  70 cents, raise to 85 cents (Hard Stop)

Action:  The chart is showing a breakout to $16 on a close above $12.75.  

  

Taser International (TASR, $7.77, up $0.12)

January 10 calls (TASR130119C00010000, $0.10, flat)

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

 

March 10 calls (TASR130316C00010000, $0.20, flat)

Entry Price:  $0.30 (11/29/12)
Exit Target:  $0.50
Return:  -33%
Stop Target:  None 

Action:  We would like to see a close above $8 this week.

 

Vivus (VVUS, $13.26, up $0.19)

January 15 calls (VVUS130119C00015000, $0.70, up $0.05)

Entry Price:  $0.65 (11/21/12)
Exit Target:  $1.30
Return:  8%
Stop Target:  None 

Action:  There is a gap to fill to $16 and we will need support to stick at $12 if there is a pullback.

 

Rosetta Stone (RST, $12.28, down $0.12) 

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 would like to see a close above $12.50 this week.  Support has been strong at $12 and we will stick with the trade as long as $11.50 holds.  

 

Knight Capital Group (KCG, $3.30, up $0.04)

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 board should decide on a buyout offer in days.  One bid is $3 the other bid is $3.50.  The $3.50 bid gets the options to $1 but we are hoping the $3 bid moves up to $4 and a bidding war erupts.  However, Knight’s top brass needs to lock-in a deal and can’t get greedy.

 

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.

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11:30am (EST)

NEW TRADES!!! 

JPMorgan Chase (JPM, $43.76, up $0.28)

Buy to Open January 45 calls (JPM130119C00045000, $0.65, up $0.10)

Action:  These options are very liquid so everyone should get great fill prices.  Use limit orders up to 70 cents but do not pay over 75 cents to establish positions.

 

Nuance Communications (NUAN, $22.75, up $0.43)   

Buy to OPEN January 24 calls (NUAN130119C00024000, $0.35, up $0.10)

Action:  Use limit orders up to 40-45 cents but do not pay over 50 cents to establish positions. 

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9:00am (EST)

Southern Copper (SCCO, $38.22, up $0.02)

January 40 calls (SCCO130119C00040000, $0.50, down $0.05)

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

Action:  The 52-week high is $39.44 set at the beginning of November and shares traded up to $38.36 yesterday.  We would like to see a close above $40 this week.  We are going to have a tight stop for this trade and may close it if shares fail to hold $37.

 

Akamai Technologies (AKAM, $39.56, up $0.50)

January 42 calls (AKAM130119C00042000, $0.60, up $0.10) 

Entry Price:  $0.56 (12/14/12)
Exit Target:  $1.15
Return:  7%
Stop Target:  None

Action:  We would like to see a close above  $40 today on continued strength.  Shares traded to a high of $39.72 yesterday. 

 

MGM Resorts International (MGM, $11.42, up $0.04)

January 11 calls (MGM130119C00011000, $0.70, doflat)

Entry Price:  $0.51 (12/11/12)
Exit Target:  $1.00
Return:  37%
Stop Target:  60 cents (Hard Stop)

Action:  There was some early morning weakness on Monday as MGM traded down to $11.27 before finishing the day in positive territory.  The options kissed 62 cents but our Hard Stop held up at 60 cents. 

 

TiVo (TIVO, $12.75, up $0.06)  

January 12.50 calls (TIVO130119C00012500, $0.85, flat)

Entry Price:  $0.60 (12/7/12)
Exit Target:  $1.20
Return:  42%
Stop Target:  60 cents, raise to 70 cents (Hard Stop)

 

May 14 calls (TIVO130518C00014000, $1.05, flat) 

Entry Price:  $0.68 (12/7/12)
Exit Target:  $1.30
Return:  54%
Stop Target:  70 cents, raise to 85 cents (Hard Stop) 

Action:  Shares reached a peak of $12.88 but we couldn’t get our close above $12.75.  The chart is showing a breakout to $16.  The January calls traded down to 74 cents so let’s raise the Stop Target to 70 cents and make it a Hard Stop.  The May calls traded down to 95 cents so let’s raise the Stop Target to 85 cents and make it a Hard Stop. 

  

Taser International (TASR, $7.65, flat)

January 10 calls (TASR130119C00010000, $0.10, flat)

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

 

March 10 calls (TASR130316C00010000, $0.20, flat)

Entry Price:  $0.30 (11/29/12)
Exit Target:  $0.50
Return:  -33%
Stop Target:  None

Action:  Taser spiked to $7.98 at the open and faded the rest of the session.  We would like to see a close above $8 this week.

 

Vivus (VVUS, $13.08, up $1.60)

January 15 calls (VVUS130119C00015000, $0.65, up $0.35)

Entry Price:  $0.65 (11/21/12)
Exit Target:  $1.30
Return:  0%
Stop Target:  None

Action:  We got our close above $12 and then some as shares surged 14%.  The options zoomed 117% to 65 cents and traded to a high of 76 cents.  Of course, we aren’t out of the woods just yet because we were down 50% but we stuck with the chart work and we are seeing the payoff.  There is a gap to fill to $16 and we will need support to stick at $12 if there is a pullback.

  

Rosetta Stone (RST, $12.40, up $0.13)

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 would like to see a close above $12.50 this week.  Support has been strong at $12 and we will stick with the trade as long as $11.50 holds.  

 

Knight Capital Group (KCG, $3.26, up $0.02) 

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 board should decide on a buyout offer in days.  One bid is $3 the other bid is $3.50.  The $3.50 bid gets the options to $1 but we are hoping the $3 bid moves up to $4 and a bidding war erupts.  However, Knight’s top brass needs to lock-in a deal and can’t get greedy.

 

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.

 

Dunkin’ Brands Group (DNKN, $32.61, up $0.95)

January 32.50 calls (DNKN130119C00032500, $0.85, up $0.30)

Thoughts:  We got out of these calls at 90 cents and 70 cents for 78% win and we may get back in them if there is continued momentum.  The January 35 calls (DNKN130119C00035000, $0.15, flat) look “cheap” as shares could perk up to $34 over the near-term with a chance at $36 coming into play.

 

iShares Russell 2000 Index (IWM, $82.52, up $1.16)

January 83 calls (IWM130119C00083000, $1.65, up $0.40)

January 84 calls (IWM130119C00084000, $1.15, up $0.40)

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

 

Microsoft (MSFT, $27.09, up $0.28) 

January 27 calls (MSFT130119C00027000, $0.70, up $0.10)

January 28 calls (MSFT130119C00028000, $0.30, up $0.05)

Thoughts:  These options look attractive and shares could easily make a run back to $28.50 if current levels hold.  A move below $26.50 would signal a test to new lows and a switch to put options.

 

JPMorgan Chase (JPM, $43.48, up $0.67)

January 44 calls (JPM130119C00044000, $0.90, up $0.20)

Thoughts:  The 52-week peak is at $46.49 and we may go long on a close above $43 with a tight stop.

 

Nuance Communications (NUAN, $22.32, up $0.31)   

January 23 calls (NUAN130119C00023000, $0.55, up $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.

 

Cree (CREE, $34.04, up $0.12)   

January 35 calls (CREE130119C00035000, $1.25, flat)

Thoughts:  Shares are near 52-week highs and there could be a push to $40 if momentum sticks.  A close below $32 would be bearish.