July 2013 | Members




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11:50am (EST) continued…

Big Blue reported a profit of $3.91 a share for the quarter versus the suit-and-ties forecast for $3.77 a share.  They also raised full-year guidance to $16.90 a share, above estimates of $16.63 a share.

The one troubling sign we noticed – revenue came in light at $24.9 billion versus estimates for $25.4 billion.  The talking heads will call this a beat but it was a mixed report as it was the fifth-straight quarter of declining revenue.  All-in-all, it was a good quarter but IBM needs to get revenues heading north instead of south

The stock’s gains have accounted for nearly 40 Dow points and Big Blue’s pop is helping the blue-chips reach new highs.  The index is up 114 points to 15,585 while the S&P is higher by 12 points to 1,692.  The Nasdaq is advancing 13 points to 3,623.

We have a number of trades in action so we have to cut things short.  Subscribers, check the Members Area for the current updates, New Trade, and Profit Alert on a trade that is up 109%!  We could also have additional updates for our Daily AND Weekly Wrap so stay close to your email inbox.



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 tradesor “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: 81-41, including the Weekly Wrap that is 26-3).


Special Note:  Wasn’t picked for jury duty.  Trade on! – Rick

New Trade!!!

Finisar (FNSR, $18.38, up $0.11)

Buy to OPEN August 19 calls (FNSR130817C00019000, $0.50, up $0.05)

Action:  Shares should challenge $20 over the near-term with support moving up from $16 to $17.



Current Trades

Skyworks Solutions (SWKS, $22.93, up $0.11)

August 25 calls (SWKS130817C00025000, $0.65, up $0.10)

Entry Price:  $0.55 (7/17/13)
Exit Target:  $1.10
Return:  18%
Stop Target:  None

Action:  Earnings are due out today after the close.  We are expecting a 10% move to $25 or $20 depending on the company’s results.



MGM Resorts International (MGM, $15.98, up $0.29)

August 16 calls (MGM130817C00016000, $0.65, up $0.15)

Entry Price:  $0.50 (7/17/13)
Exit Target:  $1.00
Return:  30%
Stop Target:  None


September 17 calls (MGM130921C00017000, $0.52, up $0.09)

Entry Price:  $0.42 (7/17/13)
Exit Target:  $1.00
Return:  24%
Stop Target:  None

Action:  Shares have breeched $16 and have traded up to $16.05.


Aruba Networks (ARUN, $17.49, up $0.12)

August 17 calls (ARUN130817C00017000, $1.15, up $0.10)

Entry Price:  $0.55 (7/8/13)
Exit Target:  $1.10
Return:  109%
Stop Target:  75 cents (Hard Stop)


August 18 calls (ARUN130817C00018000, $0.70, up $0.10)

Entry Price:  $0.55 (7/15/13)
Exit Target:  $1.10
Return:  27%
Stop Target:  None

October 22 calls (ARUN131019C00022000, $0.55, up $0.05)

Entry Price:  $0.50 (7/15/13)
Exit Target:  $1.00
Return:  10%
Stop Target:  None

Action:  Close HALF of the August 17 calls to lock-in profits.  We still have plenty of contracts left to play a continued move higher but we wanted to take some risk out of the trade by locking in profits on our original position.  A close above $17.75 should get $18-$20 in play over the next few weeks.


Sony (SNE, $22.08, down $0.02)

August 24 calls (SNE130817C00024000, $0.45, flat)

Entry Price:  $0.50 (7/11/13)
Exit Target:  $1.00
Return:  -10%
Stop Target:  None

August 26 calls (SNE130817C00026000, $0.20, flat)

Entry Price:  $0.20 (7/11/13)
Exit Target:  $0.60
Return:  0%
Stop Target:  None

October 25 calls (SNE131019C00025000, $0.85, flat)

Entry Price:  $0.80 (7/11/13)
Exit Target:  $1.60
Return:  6%
Stop Target:  None

Action:  Resistance is at $23-$24 and a close above $22.50 should get 52-week highs in play.  News that China is lifting the ban of gaming counsels could have a huge impact on this stock.  Support is at $21 and the 50-day MA and we like these trades going forward as long as $20 holds.


Apollo Group (APOL, $19.02, up $0.25)

August 16 puts (APOL130817P00016000, $0.20, flat)

Entry Price:  $0.65 (6/26/13)
Exit Target:  $1.30
Return:  -69%
Stop Target:  None

Action:  We will stick with the trade as long as $20.25 holds and we would like to see a trip below $18 this week.


Rambus (RMBS, $9.94, up $0.14)

August 9 calls (RMBS130817C00009000, $1.10, up $0.05)

Entry Price:  $0.55 (6/18/13)
Exit Target:  $1.10 (closed half @ $1.05 on 7/16/13, quarter @ $1.05 on 7/17/13)
Return:  91%
Stop Target:  80 cents (Hard Stop)

Action:  The company will report earnings after the close.


Other 2013 Portfolio OPEN positions (4):  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 2013 Portfolio link in the Members Area to view ALL open/ closed trades.

MGM Resorts International July 17 calls (from May 2013) – HOLD

Clean Energy Fuels July 16 calls (from May 2013) – HOLD

Spiders Dow Jones July 141 puts (from June 2013) – HOLD

iShares Russell 2000 Index July 90 puts (from June 2013) – HOLD



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.