July 2013 | Members

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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 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: 89-45, including the Weekly Wrap that is 27-3).

 

Walter Energy (WLT, $11.30, up $0.36)

August 9 puts (WLT130817P00009000, $0.21, down $0.12)

Entry Price:  $0.30 (7/25/13)
Exit Target:  $0.60
Return:  -30%
Stop Target:  None

September 9 puts (WLT130921P00009000, $0.50, down $0.25)

Entry Price:  $0.70 (7/25/13)
Exit Target:  $1.40
Return:  -29%
Stop Target:  None

Action:  The 52-week low of $9.88 was hit in late June and a test to $10 is likely over the next few weeks.  If these levels crack, there is a chance $7 comes into the mix.  Resistance is at $12.

 

Royal Bank of Scotland (RBS, $10.47, up $0.02)

August 10 calls (RBS130817C00010000, $0.40, down $0.25)

Entry Price:  $0.55 (7/23/13)
Exit Target:  $1.10
Return:  -27%
Stop Target:  None

November 12.50 calls (RBS131116C00012500, $0.20, down $0.05)

Entry Price:  $0.20 (7/23/13)
Exit Target:  $0.60
Return:  0%
Stop Target:  None

Action:  The 52-week high is at $11.84 and we believe shares can trade up to $13 over the next few months.  We will stick with the trade as long as $10 holds.

 

Finisar (FNSR, $18.76, down $0.18)

August 19 calls (FNSR130817C00019000, $0.60, down$0.10)

Entry Price:  $0.50 (7/18/13)
Exit Target:  $1.00
Return:  20%
Stop Target:  25 cents

Action:  Close the trade at current levels. 

We want to reduce some risk over the weekend so we are going to close out this trade at current levels.  We can always get back into Finisar because we believe shares will clear $20 at some point and we can use longer-term options to give the trade more time to develop.  

 

Sony (SNE, $21.56, down $0.55)

August 24 calls (SNE130817C00024000, $0.15, down $0.15)

Entry Price:  $0.50 (7/11/13)
Exit Target:  $1.00
Return:  -40%
Stop Target:  None

August 26 calls (SNE130817C00026000, $0.05, down $0.05)

Entry Price:  $0.20 (7/11/13)
Exit Target:  $0.60
Return:  -75%
Stop Target:  None

October 25 calls (SNE131019C00025000, $0.50, down $0.20)

Entry Price:  $0.80 (7/11/13)
Exit Target:  $1.60
Return:  -38%
Stop Target:  None

Action:  The 50-day MA is at $21.10 so we will give the trade wiggle room down to this level following the drop below $22.  Continue to hold.

Other 2013 Portfolio OPEN positions (1):  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.

Apollo Group August 16 puts (from June 2013) – HOLD – We still like this trade and will bring back coverage once shares fall below $18.  We will close the trade if the stock clears $20, and if we do, we will send out a Trade Alert.

 

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 on Monday with some fresh ideas.

9:00am (EST) continued…

The S&P 500 added 4 points, or 0.3%, to settle ar 1,690.  The index tested a low of 1,680.07 and we have mentioned the bulls need to hold 1,680-1,675 or face further risk down to 1,650.  The close at session highs sets up another run at 1,700.

The Nasdaq jumped 26 points, or 0.7%, to finish at 3,605.  Tech was strong throughout the day but did see a little red, briefly, before pushing a high of 3,606 and recovering the 3,600 level.  A test to 3,625 could come if support holds but a close below 3,575 would be bearish.

The Russell 2000 gained 10 points, or 1%, to close at 1,054.  The small-caps fell to a low of 1,040.79 on the open and we have mentioned 1,040 as the first wave of support.  There is further risk down to 1,025 on a close below this level but the finish back above 1,050 keeps 1,075 in play.

The S&P 500 Volatility Index ($VIX, 12.97, down 0.21) cleared 13.50 after trading to a high of 13.54 but managed to close below this level.  There is further risk up to 15 if the VIX closes above 13.50, otherwise, look for the bulls to push 11-10 if they can keep the momentum.

As we head to press, futures look like this:  Dow (xx); S&P 100 (xx); Nasdaq 100 (xx).

Subscribers, check the members Area for the updates.

 

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 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: 89-45, including the Weekly Wrap that is 27-3).

 

Walter Energy (WLT, $10.94, down $0.59)

August 9 puts (WLT130817P00009000, $0.33, up $0.10)

Entry Price:  $0.30 (7/25/13)
Exit Target:  $0.60
Return:  10%
Stop Target:  None

September 9 puts (WLT130921P00009000, $0.75, up $0.15)

Entry Price:  $0.70 (7/25/13)
Exit Target:  $1.40
Return:  7%
Stop Target:  None

Action:  We like these puts at current levels.  The 52-week low of $9.88 was hit in late June and a test to $10 is likely over the next few weeks.  If these levels crack, there is a chance $7 comes into the mix.

 

Royal Bank of Scotland (RBS, $10.47, up $0.02)

August 10 calls (RBS130817C00010000, $0.65, flat)

Entry Price:  $0.55 (7/23/13)
Exit Target:  $1.10
Return:  18%
Stop Target:  None

 

November 12.50 calls (RBS131116C00012500, $0.25, flat)

Entry Price:  $0.20 (7/23/13)
Exit Target:  $0.60
Return:  25%
Stop Target:  None

Action:  The 52-week high is at $11.84 and we believe shares can trade up to $13 over the next few months.  The Financial stocks have been strong and we will stick with the trade as long as $10 holds.

 

Finisar (FNSR, $18.94, up $0.28)

August 19 calls (FNSR130817C00019000, $0.70, up $0.10)

Entry Price:  $0.50 (7/18/13)
Exit Target:  $1.00
Return:  40%
Stop Target:  25 cents

Action:  Shares should challenge $20 over the near-term, possibly $25 by yearend.  Yesterday’s peak was $19 and a freash 52-week high.  Support is at $17.  The company has some sweet, new products that could add some extra pennies to their earnings for the current quarter.

 

Sony (SNE, $22.11, down $0.70)

August 24 calls (SNE130817C00024000, $0.30, down $0.20)

Entry Price:  $0.50 (7/11/13)
Exit Target:  $1.00
Return:  -40%
Stop Target:  None

 

August 26 calls (SNE130817C00026000, $0.10, down $0.05)

Entry Price:  $0.20 (7/11/13)
Exit Target:  $0.60
Return:  -50%
Stop Target:  None

 

October 25 calls (SNE131019C00025000, $0.70, down $0.30)

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

Action:  Support is at $22 and then the 50-day MA so we don’t want to bail just yet.  Let’s see if $22 holds into the close.  Continue to hold.

 

Other 2013 Portfolio OPEN positions (1):  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.

Apollo Group August 16 puts (from June 2013) – HOLD – We still like this trade and will bring back coverage once shares fall below $18.  We will close the trade if the stock clears $20, and if we do, we will send out a Trade Alert.

 

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.

 

MGM Resorts International (MGM, $15.83, down $0.24)

September 17 calls (MGM130921C00017000, $0.40, down $0.10) 

Thoughts:  We were disappointed shares couldn’t hold $16 yesterday but we will keep MGM on our Watch List.

 

Spider Gold Shares (GLD, $128.67, down, $1.19)

August 123 puts (GLD130817P00122000, $0.90, down $0.20)

September 118 puts (GLD130921P00118000, $1.20, down $0.10)

Thoughts:  We would like to see a failed test to $130 and we could go short thisweek if it looks like resistance will hold.

 

Skyworks Solutions (SWKS, $24.41, down $0.10)

August 25 calls (SWKS130817C00025000, $0.60, flat)

September 26 calls (SWKS130921C00026000, $0.70, down $0.05)

Thoughts:  If shares clear $25, we will likely get back into this trade.  We have also listed some September calls that will allow the trade more time to develop if resistance is cleared.

 

Aruba Networks (ARUN, $18.00, up $0.61)

August 18 calls (ARUN130817C00018000, $0.80, up $0.20)

October 22 calls (ARUN131019C00022000, $0.55, up $0.15)

Thoughts:  Shares are still on track for $20.  A close below $17.25 would have us dropping coverage as a bullish play.

 

SolarCity (SCTY, $40.09 ,up $0.06)

August 45 calls (weekly) (SCTY130802C00045000, $0.35, flat)

Thoughts:  A run to $45 appears likely and a close above this level could lead to $50.  Support is at $40 and if it cracks we may look at put options.  Earnings are due out August 5 and the company is expected to report a loss of 38 cents a share of revenue of $27.4 million.  Anything above these numbers could get shares rolling back towards 52-week highs.  We will be watching this name right into the earnings announcement.

 

Trius Therapeutics (TSRX, $11.72, up $0.28)

August 12.50 calls (TSRX130817C00012500, $0.50, flat)

September 15 calls (TSRX130921C00015000, $0.40, flat)

Thoughts:  A run to $15 could be coming and the call option pits have been active.  Support is at $11 but could be shaky down to $9 if there is continued weakness.

 

Exact Sciences (EXAS, $13.09, down $0.08)

August 14 calls (EXAS130817C00014000, $0.35, flat)

Thoughts:  A close above $14 would be super bullish for a run to the upper teens as long as support at $12.50 and the uptrend line holds.

 

TearLab (TEAR, $13.87, up $0.15)

August 12.50 calls (TEAR130817C00012500, $1.80, up $0.15)

September 15 calls (TEAR130921C00015000, $0.90, up $0.15)

Thoughts:  Shares surged to a high of $15.18 yesterday and the August 15’s reached a peak of $2.50 while the September 15’s kissed $1.60.  Earnings are due out in early August.

 

Rambus (RMBS, $10.16, down $0.11)

August 10 calls (RMBS130817C00010000, $0.50, flat)

January 12 calls (RMBS140118C00012000, $0.60, flat)

Thoughts:  If $10 holds, we could go long again on Rambus.

 

Nvidia(NVDA, $14.26, up $0.05)

August 14 call (NVDA130817C00014000, $0.60, flat)

Thoughts:  There is additional support is at $13.50, if $14.25 fails this week.  A close back above $14.75 would be bullish.

 

Scientific Games (SGMS, $13.46, up $0.09)

August 12.50calls (SGMS130817C00012500, $1.15, flat)

Thoughts:  We said a close above $12.50 would be bullish for a run to the mid-teens.

 

Salesforce.com (CRM, $43.22, up $1.21)

August 45 calls (CRM130817C00045000, $0.60, up $0.25)

August 40 puts (CRM130817P00040000, $0.30, down $0.30)

Thoughts:  We could be at a perfect price point to make this a strangle option trade.  There could be a back test to $42 and where we may establish a position if support holds.  We would consider puts on a drop back below $41.50.