May 2013 | Members

MEMBERS AREA

12:25pm (EST) continued…

The mini options trade like regular options but with a slightly different symbol that includes a “7”.

Apple opened at $420.45 on Monday and to buy 10 shares would have cost $4,204.50.  The Apple May 440 calls (mini) (AAPL7130518C00440000, $8.85, down $2.00) opened at $2.47 and you could have bought one call option for $247 or 10 for $2,470.

These calls closed at $8.50 on Monday and on Tuesday they closed at $10.85.  From Monday’s open this would equate to a sizzling 339% gain in just 2 days.  Today they opened at $11.10 as you can see from the quote below and they traded up to $11.50 before pulling back.

AAPL5113

This means your $247 investment is worth $885 at current levels and 10 contracts would now be worth a cool $8,850 but could have been closed at the open for $11,100.

Yes, we missed an incredible trade for our Daily but once we master the mini options that trade on Apple we expect to make a boatload of money for our subscribers as we have been very efficient in calling Apple’s momentum.

The market got a mixed bag of economic news but is holding up rather well ahead of the FOMC announcement.  As we head to press, the Dow is down 58 points to 14,782 while the S&P 500 is lower by a six=pack to 1,591.  The Nasdaq is off 15 points to 3,314.

Subscribers, check the Members Area for the updates and stay on the lookout for a Weekly Wrap trade Alert later this afternoon.

 

MEMBERS AREA

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 2013: 39-28, including the Weekly Wrap that is 12-1).

 

ADT (ADT, $41.42, down $2.22)

May 46 calls (ADT130518C00046000, $0.15, down $0.30)

Entry Price:  $0.50 (4/30/13)
Exit Target:  $1.00
Return:  -70%
Stop Target:  None

Action:  ADT reported a great quarter after earning $0.47 a share, or $107 million, for the quarter.  The suit-and-ties were looking for 42 cents a share.  The company would have earned 63 cents a share if not for “separation costs and other items at cash tax rates” but Wall Street didn’t like the flat year-over-year results.

Shares dipped to $40.19 and held $40 and we only have $300 in premium.  We think shares are undervalued at current levels and we will keep this trade open as long as $40 holds.  Perhaps a smart analyst will upgrade the stock this week or next and we can get a run back to $45.  We will have this trade on hold and will update the story again once shares recover.

 

Nasdaq OMX Group (NDAQ, $29.49, up $0.01)

June 30 calls (NDAQ130622C00030000, $0.90, flat)

Entry Price:  $0.70 (4/29/13)
Exit Target:  $1.40
Return:  29%
Stop Target:  None

Action:  We have a near-term target of $32 and we would love to see a close above $30 today.  Support is at $27.50.

 

Clorox (CLX, $85.71, down $0.54)

May 90 calls (CLX130518C00090000, $0.15, down $0.10)

Entry Price:  $0.35 (4/29/13)
Exit Target:  $0.70
Return:  -57%
Stop Target:  None

Action:  Charcoal sales hurt Clorox and caused them to miss estimates.  Shares dipped to $83.25 but have recovered the $85 level.  We will keep the trade open as long as support holds.

 

Solazyme (SZYM, $8.88, down $0.22)

June 10 calls (SZYM130622C00010000, $0.30, down $0.10)

Entry Price:  $0.35 (4/25/13)
Exit Target:  $0.70
Return:  -14%
Stop Target:  None

Action:  Earnings are due out on May 8 and a close above $9.50 would be bullish heading into the event.  Short-term support is at $9.

 

SAIC (SAI, $14.85, down $0.09)

June 15 calls (SAI130622C00015000, $0.50, flat)

Entry Price:  $0.25 (4/24/13)
Exit Target:  $0.75
Return:  100%
Stop Target:  None

August 15 calls (SAI130817C00015000, $0.65, flat)

Entry Price:  $0.40 (4/24/13)
Exit Target:  $1.20
Return:  63%
Stop Target:  None

Action:  A move above $15 would be bullish.  Resistance is choppy up to $17 on the longer-term chart but we only need a run to $16 to double and triple our money on these 2 trades.

 

Symantec (SYMC, $24.39, up $0.09)

May 25 calls (SYMC130518C00025000, $0.45, flat)

Entry Price:  $0.60 (4/11/13)
Exit Target:  $1.20
Return:  -25%
Stop Target:  None

Action:  Support is at $24 followed by $22 and we would like for a close above $25.  If cleared, the stock could run to $27-$28 by mid-May.

 

Keryx Biopharmaceuticals (KERX, $8.00, down $0.15)

June 10 calls (KERX130622C00010000, $0.35, flat)

Entry Price:  $0.70 (2/12/13)
Exit Target:  $1.40
Return:  -50%
Stop Target:  None

Action:  If shares close below $8 there is risk back down to $7.50.  A close above $8.50 should get $9 in play and a possible push to $10.

 

MGM Resorts International (MGM, $13.82, down $0.30)

June 15 calls (MGM130622C00015000, $0.30, down $0.10)

Entry Price:  $0.40 (1/2/13)
Exit Target:  $0.80
Return:  -25%
Stop Target:  None

Action:  Earnings are due out on Thursday and while we believe they will be better-than-expected there is risk back to $12.50 and the 100-day MA on a miss.  If all goes well shares could make a run to $15.

 

Other 2013 Portfolio OPEN positions (3):  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 2013Portfolio link in the Members Area to view ALL open/ closed trades.

Ironwood PharmaceuticalsMay 20 calls (from March 2013)

Spider S&P 500May 150 puts (from April 2013)

PowersharesQQQMay 66 puts (from April 2013)

 

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 candidate.

We will update this section in the morning.

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

10:20am (EST) 

Big 5 Sporting Goods (BGFV, $17.65, up $0.85)

May 17.50 calls (BGFV130518C00017500, $0.90, up $0.20)

Entry Price:  $0.55 (4/30/13)
Exit Target:  $1.00-$1.20  (closed at $1.50 on 5/1/2013)
Return:  173%
Stop Target:  None

Action:  The call options we recommended opened at $1.50 and traded up to $1.60 so everyone should have gotten great fills at the open.

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

Big 5 Sporting Goods (BGFV, $16.80, up $0.44)

May 17.50 calls (BGFV130518C00017500, $0.70, up $0.25)

Entry Price:  $0.55 (4/30/13)
Exit Target:  $1.00-$1.20  (Set limit orders at $1.50, GTC)
Return:  27%
Stop Target:  None

Action:  Shares made a strong move past $17 in extended action, trading up to $17.75 after the close.  We have set limit orders to close the trade at $1.50 or better at the open this morning.  If the option do not open this high but above $1-$1.10 take profits.

We will send out a Profit Alert if filled.

 

ADT (ADT, $43.64, flat)

May 46 calls (ADT130518C00046000, $0.45, down $0.05)

Entry Price:  $0.50 (4/30/13)
Exit Target:  $1.00
Return:  -10%
Stop Target:  None

Action:  Earnings are out today.

 

Nasdaq OMX Group (NDAQ, $29.48, up $0.38)

June 30 calls (NDAQ130622C00030000, $0.90, up $0.15)

Entry Price:  $0.70 (4/29/13)
Exit Target:  $1.40
Return:  29%
Stop Target:  None

Action:  We have a near-term target of $32 and we would love to see a close above $30 today.  Support is at $27.50.

 

Clorox (CLX, $86.25, down $0.01)

May 90 calls (CLX130518C00090000, $0.25, flat)

Entry Price:  $0.35 (4/29/13)
Exit Target:  $0.70
Return:  -29%
Stop Target:  None

Action:  Earnings are due out today.

 

Solazyme (SZYM, $9.10, down $0.13)

June 10 calls (SZYM130622C00010000, $0.40, down $0.10)

Entry Price:  $0.35 (4/25/13)
Exit Target:  $0.70
Return:  14%
Stop Target:  None

Action:  Earnings are due out on May 8 and a close above $9.50 would be bullish heading into the event.  Short-term support is at $9.

 

SAIC (SAI, $14.94, up $0.09)

June 15 calls (SAI130622C00015000, $0.50, flat)

Entry Price:  $0.25 (4/24/13)
Exit Target:  $0.75
Return:  100%
Stop Target:  None

August 15 calls (SAI130817C00015000, $0.65, flat)

Entry Price:  $0.40 (4/24/13)
Exit Target:  $1.20
Return:  63%
Stop Target:  None

Action:  A move above $15 would be bullish.  Resistance is choppy up to $17 on the longer-term chart but we only need a run to $16 to double and triple our money on these 2 trades.

 

Symantec (SYMC, $24.30, down $0.29)

May 25 calls (SYMC130518C00025000, $0.45, down $0.15)

Entry Price:  $0.60 (4/11/13)
Exit Target:  $1.20
Return:  -25%
Stop Target:  None

Action:  Shares went on a wild ride yesterday after dropping to a low of $21.93 before recovering within a minute or two.  There wasn’t any specific news for the sudden drop and some traders are blaming it on the algorithms.  We didn’t like the action but we will stick with the trade as long as support at $24 holds.  Resistance is at $25.  If cleared, the stock could run to $27-$28 by mid-May.

 

Keryx Biopharmaceuticals (KERX, $8.15, down $0.04)

June 10 calls (KERX130622C00010000, $0.35, down $0.05)

Entry Price:  $0.70 (2/12/13)
Exit Target:  $1.40
Return:  -50%
Stop Target:  None

Action:If shares close below $8 there is risk back down to $7.50.  A close above $8.50 should get $9 in play and a possible push to $10.

 

MGM Resorts International (MGM, $14.12, up $0.38)

June 15 calls (MGM130622C00015000, $0.40, up $0.10)

Entry Price:  $0.40 (1/2/13)
Exit Target:  $0.80
Return:  0%
Stop Target:  None

Action:  Shares are at fresh 52-week peaks and our patience is paying off.  Earnings are due out on Thursday and while we believe they will be better-than-expected, there is risk back to $12.50 and the 100-day MA on a miss.  The 52-week high could be challenged if all goes well and we have been calling for a run to $15 since the beginning of the year.

 

Other 2013 Portfolio OPEN positions (3):  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 2013Portfolio link in the Members Area to view ALL open/ closed trades.

 

Ironwood PharmaceuticalsMay 20 calls (from March 2013)

Spider S&P 500May 150 puts (from April 2013)

PowersharesQQQMay 66 puts (from April 2013)

 

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 candidate.

 

SolarCity (SCTY, $27.02, up $1.89)

May 30 calls (SCTY130518C00030000, $0.65, up $0.35)

Thoughts:  We wanted to keep this trade open but we weren’t sure if $27 would hold.

We still expect a run to $30 but we wanted to take the 140% in 24 hours off the table.

 

Walter Energy (WLT, $17.92, up $0.69)

June 25 calls (WLT130622C00025000, $0.50, up $0.05)

Thoughts:  It has been a rough 52-weeks for Walter Energy as shares have fallen from a 52-week high of $69.41 to a low of $16.24.   There is a chance shares hold current levels but here is risk down to $16, or worse, on continued weakness.  A close above $18 and then $20 would be super bullish but these calls are expensive.

 

Vertex Pharmaceuticals (VRTX, $76.82, down $1.51)

June 87.50 calls (VRTX130622C00087500, $1.20, down $0.65)

July 95 calls (VRTX130720C00095000, $1.00, down $0.60)

Action:  We believe shares are on their way to par which is Wall Street gibberish for $100.  Support is at $77.50 but a break below this level would be short-term bearish following the surge from $55.  We could go long on a move back above $85.

 

Cyberonics (CYBX, $43.42, up $0.32)

May 40 puts (CYBX130518P00040000, $0.40, down $0.05)

June 40 puts (CYBX130622P00040000, $1.50, flat)

Thoughts:  Resistance is at $45 and we are expecting a drop below $40 over the next month.

 

Bank of America (BAC, $12.31, down $0.07)

June 12 calls (BAC130622C00012000, $0.65, down $0.05)

Action:  Resistance is at $12.75.  Support is at $12.