MomentumOptionsTrading.com Weekly Wrap for 1/26/2014

11:30pm (EST)

 

1.  Market Summary 

2.  GasLog (GLOG) Could be a Nice Natural Gas Play

3.  Earnings

4.  Weekly Wrap Portfolio Update 

5.  Week Ahead

 

(To view the charts, please log into the Members Area and go to the Weekly Wrap Premium section.)

 

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1.  Market Summary 

“The 4-week trading range continued last week but there were bullish signs another leg higher could be in store as long as support holds.  Although the VIX stayed rather subdued, the recent triple-digit moves in the Dow has made a lot more traders nervous.  The talking heads and suit-and-ties were in overdrive during Monday’s “selloff” and we calling for a continued correction.  We disagreed and told our subscribers to stay long.

Most of the clues given to us to start the week showed support holding and the run to new highs on the Nasdaq and S&P 500 were the payoff.  The charts will show the small-caps at new record highs and we have talked about the Russell 2000 clearing 1,200.  What is NOT being mentioned is the erroneous print of 1,213.49 that occurred back in December.

The charts we have been drawing for you on the Russell 2000 showed the surge past 1,200 to 1,213 on December 23 but last week that “bar” was reduced as we mentioned the head officials said it would be fixed.

Here were our thoughts from our Midday Daily update on December 23, 2013:

“The Russell 2000 opened at 1,212.81 and kissed 1,213.49 in the opening minutes before coming back down to earth.  The 5% move could have been a rebalancing act and either marks the high for the year or is one hell of a clue this level will be triggered in January”. (END)

Here was the chart work we did the following at the beginning of the year that also shows the run past 1,200:

RUT12614

We aren’t sure why the Russell 2000 was “changed” because a print is a print in our mind. Call it erroneous or a fat finger, but we were watching it on out trading screens and on the tube and is one of the main reasons we have said to remain long.

Of course, other technical indicators have held up as well for us to remain bullish but the fact this was changed isn’t fair.  Most of the “Average Joe’s”, and Wall Street pros for that matter, have no idea the small-caps tripped 1,200 back in December.

If the Russell 2000 does happen to make a trip to 1,200 this month (or next) with a little fluff, we may consider this a “double-top” and a great indicator to go short into February and March.

New investors or traders that don’t do their homework may see the small-caps tripping 1,200 in the coming weeks and decide there is a continued rally in the works on the breakout to new record highs.

This scenario is still possible but we want to wait until February before we make our longer-term predications on where the market is headed.  We have been pretty accurate on yearend prices for the past few years but this year could be tricky.

There is a chance the Dow trades to 20,000 by the end of 2014 – or – falls to 13,000 over the next 6 months.  These would be our extreme upper and lower end Price Targets for the blue-chips this year but we are still redefining them and have a host of other headline risks to consider.  February has also been a hard month to trade in recent years.

The upcoming week will be the busiest time for 4Q earnings announcements and there are a number of heavy-hitters stepping up to the plate.  With economic news playing second fiddle, volatility could increase.

We nearly laughed when we heard one talking head say they pay no attention to the VIX until it trades in the 20’s.  Other knuckleheads have disregarded the VIX as an indicator for market direction but we continue to view it as one of the most important indexes we follow that continues to give great clues.

The Dow Monday/ Friday closes looked bearish following the prior week’s down days and this prior Monday’s debacle.  However, the Dow was the only index to finish in the green on Friday and finished the week in positive territory following a nice comeback.

We still see the bulls pushing news highs over the near-term and at some point there will be a correction but we will be prepared if and when it comes.  We doubt 2014 will be as smooth as 2013 was but as long as the uptrend lines continue to hold, the indexes could return medium to high double-digit gains.” (from 1/20/2014 Weekly Wrap…)

The market has been stuck in a 5-week trading range that has seen support and resistance tested numerous times but last week’s run to the top of the range and sudden drop to December lows has Wall Street spooked.  The bulls are on the verge of a major collapse while the bears come out of hibernation and this week could determine if the longer-term trend is lower or the short-term trend means a continued trading range.  (continued…)

The Dow dropped 318 points, or 2%, to close at 15,879 on Friday.  The blue-chips started Tuesday with a test to prior support at 16,400 after failing to hold a 62-point pop to 16,520 at the open.  Although the index closed at 16,414 the dip to 16,316 signaled a 200-point swing and opened the door for a test to 16,200.  Wednesday’s rebounded to 16,453 was a lower high and the close at 16,373 sealed the deal for Thursday’s trip to. 16,140 and close at 16,197.  We said a close below 16,200 would get 16,000-15,800 in the mix and the Dow went out as its session low.  There is further risk to 15,600-15,400 on continued weakness while a close above 16,000 would be short-term bullish.  For the week, the Dow declined 679 points, or 3.5%, after starting at 16,458 and is down 697 points, or 4.2%, for 2014.

DOW12614

The S&P 500 sank 38 points, or 2.1%, to settle at 1,790.  The index traded down to 1,832 on Tuesday after testing 1,849 but finished with a 5-point gain to 1,843.  We were looking for a close above 1,850 and Wednesday’s peak reached 1,846.87 before a pullback to 1,840 and close just below 1,845.  We warned of a back test to 1,825 if the bulls failed to clear resistance and Thursday’s back test to 1,820 and close at 1,828 looked textbook.  However, the selling pressure continued into Friday and we warned another dip below 1,825 would trigger 1,810-1,800.  If the bulls can reclaim these levels by Monday’s close there is a chance they keep the trading range intact.  However, the finish below 1,800 on Friday opens the door for a test to 1,775-1,750.  The S&P 500 came into the week at 1,838 and gave back 48 points, or 2.6%, by Friday’s close.  For the year, the index is down 58 points, or 3.1%.

SPX12614

The Nasdaq tanked 90 points, or 2.2%, to finish at 4,128.  Tech traded to a high of 4,227 and closed at 4,225 after testing a low of 4,193 to start the week.  This signaled continued strength to 4,250-4,300 and Wednesday’s high reached 4,246 with a finish at 4,243.  Thursday seemed like a back test to support at 4,225-4,200 but the low of 4,192 made us nervous despite a close of 4,218.  We said Friday morning there was risk to 4,150 if the bears got below 4,200 again and said to specifically watch the 20-day MA at 4,173 if there was another break below support.  The bulls are less than 2% away from recovering 4,200 and stellar earnings from Apple and Google could help fuel a rally back to the top of the trading ranges.  The next levels of support are at 4,100 and then 4,050-4,000.  The Nasdaq was at 4,197 and got spanked for 69 points, or 1.7%, and is off 48 points, or 1.2%, year-to-date.

NAS12614

The Russell 2000 got hammered for 28 points, or 2.4%, to end at 1,144 on Friday.  The small-caps made a brief trip into negative territory by less than a point to start the week and closed at 1,175 on Tuesday.  This was a bullish sign for a possible run to 1,200 and Wednesday’s high of 1,182 and close at 1,181 looked good.  Thursday’s dip to 1,166 and close back below 1,175 to 1,172 looked bad.  Friday’s low of 1,141 was ugly.  The bulls will need to clear 1,150 to start the week or they face further pressure down to 1,125-1,100.  The Russell came into Monday’s open at 1,168 was fell 24 points, or 2.1%, for the week and is lower by 19 points, or 1.7%, YTD.

RUTb12614

The S&P 500 Volatility Index ($VIX, 18.14, up 4.37) jumped 32% to clear 15 and 17.50 in the blink of an eye to end the week.  The VIX reached 13.42 on Tuesday but stayed below 13.50 after closing at 12.87.  Wednesday’s dip to 12.55 nearly got the bulls below 12.50 but the flat close at 12.84 was nerve-racking.  Thursday’s peak of 14.66 held 15 but the close above 13.50 was a warning sign.  With the VIX ending at session highs, there is risk to 20-21 and a close above these levels would be bearish.  The bulls will need to get back below 17.50 and then 15 to calm Wall Street’s nerves.

VIX12614

The bulls came into the week ready to make a continued run to new highs and a break out of the current trading ranges.  To a degree they did by midweek as the S&P 500 and Nasdaq kissed fresh 52-week intraday peaks.  We didn’t include the Russell 2000 because the index cleared 1,200 on December 23 although the morning spike has been eliminated from a lot of charts since.  That is the good news.

There were a number of developments that came to a head late in the week that helped the bears regain the momentum as they were able to push the bottom of the current trading ranges, in a hurry.  We often say the bulls like to take steps to higher ground while the bears use the elevator to make their appearance.

China got the snowball rolling Wednesday night after they reported a weaker-than-expected PMI number of 49.6 – an indication the country is falling back into contraction.  Anything under 50 is negative and the 6-month low in China’s PMI spooked world markets.

Emerging currency markets also played a major role in the pullback as Argentina significantly devalued its currency with inflation ballooning while Brazil’s real currency fell to a five-month low.  Meanwhile, Japan’s yen rebounded sharply while Venezuela is on the verge of collapse along with Puerto Rico.

We didn’t even mention the issues surrounding Turkey, Egypt and Russia and the Olympic games.  These are potential contagion problems that usually don’t get resolved in days and could be a continued drag on the market.

Earnings have been sketchy at best although the official numbers tell a different story.  Companies seem to be beating on the earnings per share side as 63% of the roughly 100 S&P 500 names have reported numbers above expectations.  The rest of the breakdown reveals 12% have matched expectations while 25% have missed expectations.

This will be the busiest week for Q4 earnings as you can tell from our Weekly Wrap Earnings section.  The main names we will be watching is Caterpillar (CAT) on Monday before the bell and Apple (AAPL) after the close; AK Steel Holding (AKS), DuPont (DD) and Pfizer (PFE) on Tuesday morning – AT&T (T) after the close; Boeing (BA) Wednesday before the open – Facebook (FB) and Qualcomm (QCOM) after the bell;  3M Company (MMM)/ Exxon Mobil (XOM) and Visa (V) before Thursday’s open – Chipotle Mexican Grill (CMG) after the close;  and Mastercard (MA) Friday morning.

There are a number of higher priced Dow components reporting this week along with Apple and Google.  We are expecting big price moves from the majority of the heavy-hitters and the impact will be felt – good or bad.

The major averages fell below significant psychologically levels on Friday and the VIX surged 44% for the week.  This combination could lead to further weakness and a test to the 100-day moving averages (MA’s) on continued weakness.

The Dow’s 100-day MA is at 15,745 with the S&P’s at 1,762.  The Nasdaq is above its 100-day MA (3,946) and faces near-term risk to the 50-day MA at 4,087.  The Russell 2000 is also above its 100-day MA (1,109) but is just a 6-pack above the 50-day MA at 1,138.

The VIX had its biggest week since July 2011 and surged 44% for week.  The pop past 15 made us flinch and we warned a run to 17.50 could come if triggered. The VIX went out on Friday at session highs and there is now risk to 20.  A break above 20 could lead to 22-24 and where we would expect buyers to step in.

If the VIX clears 25, there will be blood in the streets and the indexes would likely see a test to their 200-day MA’s.  We doubt the market gets this out of control but stranger things have happened so we at least have to prepare for the worst.

For a 10% correction to occur off the highs, the Dow would have another 950 points to go.  The blue-chips kissed 16,588 on the last trading day of 2013 and a 5% pullback would put the Dow at 15,759.

If we run the numbers on the S&P, a 10% correction off the mid-January 1,850 high would push the index down to 1,665.  A 5% pullback would put the S&P near 1,750.

A 10% debacle on the Nasdaq would spell 3,820 while a 5% haircut would put Tech near 4,035 following last Wednesday’s trip to 4,246.

And while we’re at it:  the Russell 2000 kissed 1,213 “unofficially” on December 23 so a 10% spanking would get the small-caps down to 1,082.  A 5% beating would push the index to 1,152.

The 5% levels will likely trigger if there is further weakness and if these levels fail to hold we could aggressively start to look at put options as the 200-day MA’s would then be in play.

There hasn’t been a 10% pullback for the market in over 400 days.  The Dow Transports reached all-time highs again midweek and was another reason why we felt the bulls might hold support.  However, they had their worst day since April 2013 on Friday after Kansas City Southern (KSU, $99.49, down $17.79) imploded 15% on weaker-than-expected results.

TRAN12614

We covered the Dow Theory in early November and talked about how the Transports usually reach new highs first, followed by the Dow during bull markets.  However, the blue-chips will need to rebound in a hurry to confirm a continued uptrend or this could be another sign this pullback could turn into a correction.

The shortened week didn’t include a Monday with the market closed for a holiday and Friday’s have been bullish of late with shaky Monday’s.  We mentioned the Dow had it first negative Monday/ Friday close a few weeks ago for the first time since November and this week’s closes could also confirm a negative trend developing if the index end lower both day.  An up Monday, along with an up Friday could help the bulls hold the current trading ranges but if not, prepare for more selling pressure.

Besides earnings, the FOMC meeting on Tuesday and the decision on rates Wednesday will be another headline risk.  The suit-and-ties are expecting another $10 billion in taper cuts from the Fed to a $65 billion for February.  Of course, the recent nasty headlines could also prevent the Fed zombies from further tapering.

We expect the Fed to continue with the $10 billion monthly cut at least for now because if they don’t it would seem like an overreaction to a bad tape.

Caterpillar (CAT, $86.17, down $2.31) is expected to report earnings of $1.28 a share on revenue of $13.64 billion.  There are 22 analysts that follow the company and the range for earnings is $1.20-$1.39 so there could be a big miss or beat.  The revenue range is $13.16-$14.11 billion and anything over $14 billion would be a home run.  This will be the first hurdle for the bulls as a miss by Caterpillar to start the week would not be good.

CAT12614

The President will also be addressing the nation Tuesday night and his remarks could also weigh on the indexes.  We are sure he will talk about inequality, Obamacare, and the economy but we doubt he will talk about his approval rate.

As we head to press, futures are showing a slightly higher open to start the week:  Dow futures are up 23 points to 15,839 while the S&P 500 futures are higher by 5 points to 1,787.  The Nasdaq 100 futures are advancing 8 points to 3,540.

 

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 2.  Key of Technicals Used In Following Article

Key_of_Technicals

 

 

2.  GasLog (GLOG) Could be a Nice Natural Gas Play

By Michael Bryant

 

GasLog (GLOG, $19.75, down $0.24) seems to on the run.  Is it too late to catch the ride?

Charta12614

His son Stavros George Livanos saw that steamships were the future, and the family acquired its first steamship in 1907.  He later inherited the business from his father and grew it into an empire.  After World War I, Europe experienced a shipping boom.  Stavros only acquired ships that he could afford with cash, refusing to take loans to finance his fleet.  Wealth preservation became a priority, which helped greatly during when the Great Depression.  Unlike many of his competitors, he was cash-rich and did not owe any debt to the banks.  As the competitors were forced to sell their ships, he bought them on the cheap.  By the end of World War II, he had amassed a fleet of about 30 cargo ships and had become one of the richest men in the world.

His cousin George Peter Livanos was also building a naval empire, but from Lausanne, Switzerland.  He received a degree in economics from the University of Athens in 1946, and then founded Ceres Hellenic Shipping Enterprises in 1949.  Slowly he built a fleet of over 100 ships, which became the largest merchant navy in Greece.  In 1994, his fortune was an estimated $3 billion.  He passed away in 1997, leaving his business to his son, Peter G. Livanos, the current chairman of GasLog’s board of directors.

In 2000, Ceres Hellenic Shipping’s division Seachem Tankers merged with Norwegian-based Odfjell to create the Odfjell Seachem AS shipping company, one of the world’s largest chemical tanker operators.  In spring 2005, its tanker fleet was sold to international tanker giant Euronav, and Ceres Hellenic Shipping specialized in the management of bulk cargo and LNG carriers.  The private company, which has a majority interest in Blenheim Holdings, has three major divisions:

  • DryLog – invests and owns dry bulk ships
  • GasLog – owns LNG carrier ships and manages others under contract
  • TankLog – is the second largest shareholder of Euronav 

Bermuda-based Olympic LNG Investments holds a 7.2% stake in GasLog.  Olympic LNG Investments is a subsidiary of Olympic Maritime, which was formed by Aristotle Socrates Onassis in 1952.  Onassis had married Stavros George Livanos’ daughter Athina in 1947.  He built a fleet of 50 supertankers, bulk carriers and smaller vessels.  He later formed the Alexander S. Onassis Foundation to hold his shipping business.

On Thursday, March 29, 2012 after the bell, the company sold 23.5 million shares to the public (less than 50% of outstanding shares) for $14 each, raising $329 million.  However, this was below the expected range of $16 to $18 a share, and shares fell 11% on its first day of trading.  The midpoint of the IPO range valued GasLog at $1.07 billion, or 16 times last year’s sales.  That compares with 9.7 times sales for LNG shipper Golar LNG (GLNG) and 1.2 times sales for oil tanker and LNG shipper Teekay Corporation (TK).

At the time of its IPO, the company’s wholly-owned fleet consisted of 10 LNG carriers; two of which were delivered in 2010 and eight under construction at Samsung Heavy Industries.  The total contract price of the eight vessels was $1.55 billion of which $105.5 million had been paid to date.  The company entered into two loan agreements totaling $1.129 billion to partially finance the acquisition with the balance to be paid from the proceeds of the offering.

The shipping sector has hit hard times, with overcapacity being a problem.  However, the LNG market seemed to have weathered the storm.  LNG shipments have increasing at about 6% annually over the last decade.  Natural gas, unlike oil, is mostly bound to domestic production and transport through pipelines.  For countries that lack natural gas resources and delivery infrastructure, LNG represents a rapid and cost-effective means of introducing natural gas into the countries’ local fuel mix.  Currently there are 25 LNG-importing countries in Europe, Asia, South America, Central America, North America and the Middle East, up from 17 importing countries in 2007.  Numerous developing countries, including Poland, Croatia, Bangladesh, Jamaica, Colombia, Panama, El Salvador, Costa Rica and Lebanon, among others, are considering plans to build new LNG terminals and enter the global LNG trade.

The United States’ fracking boom has created a surplus of natural gas.  Cheniere Energy’s (LNG) export terminal Sabine Pass, the only current terminal with an LNG exporting permit in the country, is expected to begin operations in late 2015.  While United States’ natural gas sells for about $4 BTUs (British thermal units), the price is about $17 in Japan and other Asian countries.  Thus, the price difference highly favors exporting LNG.  And Europe is considering continuing previously-banned fracking operations, meaning there will be even more supply of LNG to export in the future.

But LNG demand is expected to stay high due to:

  • Rising energy demand in Asia and other parts of the world
  • Rising popular opposition to nuclear power generation
  • Natural gas is a cleaner fuel than coal or oil 

Before the economic crisis, charter rates were typically running at $65,000 to $70,000 a day. But in 2009, rates dropped to about $30,000 a day.  Now, rates are about $90,000 a day and are expected to remain around $80,000 to $85,000 a day over the next five years.

Chartb12614

 

The stock surged at the beginning of 2014 due to:

  • On January 13, the company announced that it plans to form a master limited partnership (MLP) to own certain LNG carriers with multi-year charters.  The proceeds of the offering would principally be used to reduce indebtedness.
  • On January 15, the company announced it plans to purchase three LNG carriers for approximately $468 million.  Each LNG carrier will be steam-powered and have a capacity of 145,000 cubic meters.  The company estimates that upon their acquisition, these ships will represent approximately $426.3 million of incremental contracted revenue over their initial charter terms and add over $50.0 million per year to its EBITDA. 

Not long ago, on November 14th, the company reported 3rd quarter results for the three months ending November 13th.  Revenue increased to $43.1 million from $20.5 million in the same quarter a year ago.  Earnings increased to $0.18 per share in the quarter compared to earning of $0.06 per share in the same period a year ago.  The company reports 4th quarter earnings on February 28th after the bell.  Analysts estimate the company will earn $0.24 per share on $53.04 million.

Chartc12614

Chartd12614

At $19.75, the stock is just above its mean target of $19.37 made by the 10 analysts recorded by Thomson/First Call.  Median target of $18.50, low target is $16.00, and high target is $24.00.  Using a scale of 1.0 as a strong buy and 5.0 as a sell, the average rating of the stock was 1.5, unchanged from a week ago.

 

Current Month

Last Month

Two Months Ago

Three Months Ago

Strong Buy

5

4

4

4

Buy

6

6

7

6

Hold

0

0

0

0

Underperform

0

0

0

0

Sell

0

0

0

0

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3.  Earnings  

The companies in BOLD, we are looking at as possible trades and we may list call or put options on them in our Daily Newsletter.  If they become official recommendations, we sent out Trade Alerts or include them in our 9am and 1pm updates that come out during the week (Quotes are from 1/24/14 close)

By Catherine Tierney

 

Special Notice:  There are literally dozens of possible earnings trades this week and we have done our best to highlight the stocks we believe will make a 5%-10% move on the results.  The stocks we have calls/ puts by means they could make a good strangle or straddle trade.  The stocks we have calls listed or puts means we would lean that way.  With the recent volatility, straddles and strangle option trades could do well this week for solid double or triple-digit gains.

 

Monday

Before the open:

Actions Semiconductor (ACTS)

American Electric Power (AEP)

Aradigm (ARDM)

AU Optronics (AUO)

Bank of Marin Bancorp (BMRC)

Caterpillar (CAT) puts

Chemical Financial (CHFC)

Coffee Holding (JVA)

First Cash Financial Services (FCFS)

Haemonetics (HAE)

Hanmi Financial (HAFC)

Lakeland Financial (LKFN)

Nam Tai Electronics (NTE)

NVR (NVR)

Petroleum Geo-Services (PGSVY)

Rayonier (RYN)

Regis (RGS)

Roper Industries (ROP)

Royal Caribbean Cruises (RCL) puts/ calls

Ryanair Holdings (RYAAY)

S.Y. Bancorp (SYBT)

Scorpio Tankers (STNG)

Siliconware Precision Industries (SPIL)

TGC Industries (TGE)

TriMas (TRS)

Universal Stainless & Alloy (USAP)

 

After the close:

Apple (AAPL) calls

Ashland (ASH)

Bank of McKenney (BOMK)

BBCN Bancorp (BBCN)

Berkshire Hills Bancorp (BHLB)

Costamare (CMRE)

Covenant Transportation Group (CVTI)

Crane (CR)

Datawatch (DWCH)

Dime Community Bancshares (DCOM)

Ducommun (DCO)

Equity LifeStyle Properties (ELS)

Flushing Financial (FFIC)

Graco (GGG)

Heartland Financial USA (HTLF)

HF Financial (HFFC)

Hudson Valley Holding (HVB)

iCAD (ICAD)

J & J Snack Foods Corp. (JJSF)

KT (KT)

Metris Companies (MXT)

MicroStrategy MSTR)

NBT Bancorp (NBTB)

Norwegian Cruise Line Holdings (NCLH)

NutriSystem (NTRI) puts?

Olin Corporation (OLN)

Park National (PRK)

Plantronics (PLT)

Plum Creek Timber (PCL) puts

PLX Technology (PLXT)

PRGX Global (PRGX)

QCR Holdings (QCRH)

Rambus (RMBS)

Rent-A-Center (RCII)

Rockville Financial (RCKB)

Sanmina-SCI (SANM)

Seagate Technology (STX)

Silicon Motion (SIMO)

Sinopec Shanghai Petrochemical (SHI)

Socket Communications (SCKT)

Steel Dynamics (STLD)

STMicroelectronics (STM)

Summit State Bank (SSBI)

Swift Transportation (SWFT) puts

Tableau Software (DATA)

Transcat (TRNS)

United States Steel (X) puts/ calls

 

Tuesday

Before the open:

3D Systems Corporation (DDD) calls/ puts

A. M. Castle & Co. (CAS)

A.O. Smith (AOS)

Advantest (ATE)

Affiliated Managers Group Inc. (AMG)

Air Products & Chemicals, Inc. (APD)

AK Steel Holding (AKS)

Alliance Holdings (AHGP)

Alliance Resource Partners (ARLP)

Atlantic Coast Federal/Waycross (ACFC)

AVX (AVX)

Bnccorp (BNCC)

Capital City Bank Group (CCBG)

Carpenter Technology (CRS)

Check Point Software (CHKP)

CIT Group (CIT)

Cobalt International Energy (CIE)

Comcast (CMCSA) puts/ calls

Corning (GLW) calls/ puts

CorVel (CRVL)

Cumulus Media (CMLS)

D.R. Horton (DHI)

Danaher (DHR)

DENTSPLY International (XRAY)

DineEquity (DIN)

DuPont (DD) calls

Exact Sciences (EXAS) current trade

FirstMerit (FMER)

Ford Motor (F)

Fresh Del Monte Produce (FDP)

G&K Services (GK)

Harris (HRS)

Headwaters (HW)

Heidrick & Struggles (HSII)

Home Bancorp (HBCP)

HomeStreet (HMST)

Hubbell (HUB.A)

Iconix Brand Group (ICON)

II-VI Incorporated (IIVI)

Illinois Tool Works (ITW) calls

International Speedway (ISCA)

Komatsu (KMTUY)

Koninklijke Philips Electronics (PHG)

Kulicke & Soffa Industries (KLIC)

LandAir (LAND)

Lexmark International (LXK)

Martha Stewart Living Omnimedi (MSO)

Monro Muffler Brake (MNRO)

NextEra Energy (NEE)

Nucor (NUE)

Oshkosh Truck (OSK)

OSI Systems (OSIS)

Pentair (PNR)

Pfizer (PFE) calls/ puts

Polaris Industries (PII)

Potlatch (PCH)

Radware (RDWR)

S&T Bancorp (STBA)

SCBT Financial (SCBT)

Spartan Motors (SPAR)

T. Rowe Price Group (TROW)

Timberland Bancorp (TSBK)

Twin Disc (TWIN)

United Therapeutics (UTHR)

Uranium Resources (URRE)

Waters (WAT)

 

After the close:

ACE (ACE)

Albemarle (ALB)

Amgen (AMGN)

Anaren (ANEN)

Anthera Pharmaceuticals (ANTH)

Arthur J. Gallagher & Co. (AJG)

AT&T (T) puts

Banco de Chile (BCH)

Black Box (BBOX)

Boston Properties (BXP)

Caesars Entertainment (CZR) puts

Calamos Asset Management (CLMS)

Camden National (CAC)

Cerus (CERS)

Cirrus Logic (CRUS)

Concurrent Computer (CCUR)

CSS Industries (CSS)

diaDexus (DDXS)

Electronic Arts (EA) puts

Electronics for Imaging (EFII)

EZCORP (EZPW)

First Busey (BUSE)

Freescale Semiconductor (FSL)

Greenhill & Co (GHL)

Grupo Televisa S.A. Global Dep (TV)

Guangshen Railway (GSH)

Harmonic (HLIT)

Hawaiian Holdings (HA)

Hollywood Media (HOLL)

Hub Group (HUBG)

Hutchinson Technology (HTCH)

Iberiabank (IBKC)

IGI (IG)

Illumina (ILMN) puts/ calls

Integrated Silicon Solution (ISSI)

Iteris (ITI)

Jones Lang LaSalle (JLL)

Key Tronic (KTCC)

Koss (KOSS)

MagnaChip Semiconductororation (MX)

Merchants Bancshares (MBVT)

Mercury Computer Systems (MRCY)

Meridian Interstate Bancorp (EBSB)

Midsouth Bancorp (MSL)

National Bank Holdings (NBHC)

Ocean Shore Holding (OSHC)

Orient Paper (ONP)

Owens-Illinois (OI)

Pericom Semiconductor (PSEM)

PolyOne (POL)

Rexnord (RXN)

RF Micro Devices (RFMD) Watch List

Rock-Tenn (RKT)

Rubicon Technology (RBCN)

Seven Seas Petroleum (SEV)

Silgan Holdings (SLGN)

SL Industries (SLI)

Synageva BioPharma (GEVA)

Systemax (SYX)

TriCo Bancshares (TCBK)

Triumph Group (TGI)

Trulia (TRLA)

Trustmark (TRMK)

TSYS (TSS)

Ur-Energy (URG)

Urologix (ULGX)

Veritas Software (VRTS)

VMware (VMW) puts

Washington Trust Bancorp (WASH)

Watts Industries (WTS)

WebMD Health (WBMD) calls

Werner Enterprises (WERN)

WesBanco (WSBC)

Weyco Group (WEYS)

WR Berkley (WRB)

Yahoo (YHOO) calls/ puts

 

Wednesday

Before the open:

1-800-Flowers.com (FLWS)

1st Constitution Bancorp (FCCY)

Advanced Semiconductor (ASX)

AGF Management Limited (AGFMF)

AMETEK (AME)

AudioCodes (AUDC)

Biogen Idec (BIIB)

BNC Bancorp (BNCN)

Boeing (BA) calls/ puts

Canadian Pacific Railway (CP)

Canon (CAJ)

CDI (CDI)

ChoicePoint (CPS)

Commvault Systems (CVLT)

Cullen/Frost Bankers (CFR)

Dixie Group (DXYN)

Dow Chemical (DOW)

Edgewater Technology (EDGW)

EMC (EMC) puts

Energizer Holdings (ENR)

EverBank Financial Corp. (EVER)

Evercore Partners (EVR)

ExlService Holdings (EXLS)

Female Health (FHCO)

First Commonwealth Financial (FCF)

First Community Bancshares (FCBC)

Firstbank (FBMI)

Fuji Film Holdings (FUJIY)

Gentex (GNTX)

Hess (HES)

Hudson City Bancorp (HCBK)

JetBlue Airways (JBLU)

Kao (KCRPY)

Kirin Holdings (KNBWY)

Kyocera (KYO)

Marathon Petroleum (MPC)

Marine Products (MPX)

MarketAxess Holdings (MKTX)

Mastech Holdings (MHH)

McCormick (MKC)

MCG Capital (MCGC)

MeadWestvaco (MWV)

Meredith (MDP)

Merge Technologies (MRGE)

Meritor (MTOR)

MPLX (MPLX)

Natus Medical (BABY)

Navios Maritime Partners (NMM)

New York Community Bancorp (NYCB)

Nintendo (NTDOY)

NorthWestern (NOR)

Novartis (NVS)

O2Micro International (OIIM)

Orix (IX)

Pain Therapeutics (PTIE)

Phillips 66 (PSX)

Phillips 66 Partners (PSXP)

Piper Jaffray (PJC)

Praxair (PX)

Rockwell Automation (ROK)

Rollins (ROL)

SEI Investments (SEIC)

Silicon Laboratories (SLAB)

Southern Company (SO)

Speedway Motorsports (TRK)

Stock Building Supply Holdings (STCK)

Summit Financial Group (SMMF)

Taser International (TASR) calls

TCF Financial (TCB)

Teleflex (TFX)

Top Image Systems (TISA)

Tower International (TOWR)

Tupperware (TUP) puts

Unitil Corp. (UTL)

Valero Energy (VLO)

Volkswagen (VLKAY)

Walter Industries (WLT) Watch List

WellPoint (WLP)

 

After the close:

Acxiom (ACXM)

Allegiant Travel (ALGT)

Amdocs (DOX)

Anika Therapeutics (ANIK)

Astoria Financial (AF)

AvalonBay Communities (AVB)

Boston Beer Company (SAM)

BroadVision (BVSN)

Brookline Bancorp (BRKL)

Cabot Corporation (CBT)

CACI International (CACI)

Cadence Design Systems (CDNS)

Callaway Golf (ELY)

Campus Crest Communities (CCG)

Capstead Mortgage (CMO)

Cardiovascular Systems (CSII)

Cavium Networks (CAVM)

Cell Therapeutics (CTIC)

Charles & Colvard (CTHR)

Chart House (FISH)

China Eastern Airlines (CEA)

Churchill Downs (CHDN)

Chuy’s Holdings (CHUY)

Citrix Systems (CTXS)

Coherent (COHR)

Comfort Systems USA (FIX)

Concur Technologies (CNQR)

Core Laboratories (CLB)

Crocs (CROX) puts/ calls

Duke Realty (DRE)

DXP Enterprises (DXPE)

Dynamics Research (DRCO)

Endologix (ELGX)

Engelhard (EC)

ESSA Bancorp (ESSA)

ExamWorks Group (EXAM)

Exar (EXAR)

Exelixis (EXEL)

Exponent (EXPO)

Extreme Networks (EXTR)

Facebook (FB)

Farmers National Banc (FMNB)

FARO Technologies (FARO)

Financial Institutions (FISI)

First Interstate Bancsystem (FIBK)

Flextronics International (FLEX)

Fortinet (FTNT)

Fortune Brands Home & Security (FBHS)

Fox Chase Bancorp (FXCB)

Greenlight Capital (GLRE)

HanesBrands (HBI)

Hawkins (HWKN)

Heritage Financial (HFWA)

Hudson Technologies (HDSN)

Infinera Corp. (INFN)

Insignia Systems (ISIG)

Interactive Intelligence (ININ)

International Rectifier (IRF)

Intersil Holding (ISIL)

inTest (INTT)

Intevac (IVAC)

Inuvo (INUV)

InVision Technologies (INVN)

IXYS (IXYS)

John B Sanfilippo & Son (JBSS)

Kayne Anderson Energy Development (KED)

Kirby (KEX)

Knight Transportation (KNX)

Kraton Performance Polymers (KRA)

Lam Research (LRCX)

Las Vegas Sands (LVS) calls/ puts

Mellanox Technologies (MLNX)

Methanex (MEOH)

MicroFinancial (MFI)

MKS Instruments (MKSI)

Murphy Oil (MUR)

Nanophase Technologies (NANX)

NeuStar (NSR)

Northfield Bancorp (NFBK)

Oplink Communications (OPLK)

Porter Bancorp (PBIB)

Qiagen (QGEN)

QLogic (QLGC)

Qualcomm (QCOM) calls/ puts

Quantum (QTM)

Regional Management (RM)

Seaspan Corp. (SSW)

Seneca Foods (SENEB)

ServiceNow (NOW)

Silicon Graphics International (SGI)

Silver Spring Networks (SSNI)

Skullcandy  (SKUL) puts

SL Green Realty (SLG)

Slades Ferry Bancorp (SFBC)

Solar Capital (SLRC)

SpanAmerica Medical Systems (SPAN)

Spartan Stores (SPTN)

Spectrum Brands Holdings (SPB)

Staar Surgical (STAA)

StanCorp Financial Group (SFG)

Sunstar Healthcare (SUNS)

Symantec (SYMC) calls

Tetra Tech (TTEK)

Thoratec (THOR)

Tile Shop Holdings (TTS)

Tractor Supply (TSCO) calls

United States Lime & Minerals (USLM)

Vertex Pharmaceuticals (VRTX)

Vista Gold (VGZ)

VistaPrint (VPRT)

VSE (VSEC)

Westport Innovations (WPRT)

 

Thursday

Before the open:

3M Company (MMM) calls

Abiomed (ABMD)

ADT (ADT) puts/ calls

Airgas (ARG)

Alamos Gold (AGI)

Alcatel-Lucent (ALU)

Alexion Pharmaceuticals (ALXN)

Alkermes (ALKS)

Alliant Techsystems (ATK)

Altria Group (MO)

Applied Industrial (AIT)

Arkansas Best (ABFS)

Attunity (ATTU)

AutoNation (AN)

Avery Dennison (AVY)

B/E Aerospace (BEAV)

Baldwin & Lyons (BWINB)

Ball (BLL)

Bayer (BAYRY)

Beazer Homes (BZH)

Bemis (BMS)

Blackhawk Network Holdings (HAWK)

Blackstone Group (BX)

Boyd Gaming (BYD)

British Sky Broadcasting Group (BSYBY)

Broadwind Energy (BWEN)

Brunswick (BC)

Camco Financial (CAFI)

Cameron (CAM)

Carbo Ceramics (CRR)

Carbonite (CARB)

Cardinal Health (CAH) calls

Cass Information Systems (CASS)

Catamaran (CTRX)

Celgene (CELG)

Central Pacific Financial (CPF)

Ceva (CEVA)

Chart Industries (GTLS)

CMS Energy (CMS)

Colgate-Palmolive (CL)

Comstock Mining (LODE)

ConocoPhillips (COP)

Cooper Tire & Rubber Company (CTB)

Destination Maternityoration (DEST)

Diageo (DEO)

DigitalGlobe (DGI)

Dover (DOV)

Dover Downs Gaming & Entertain (DDE)

Dover Motorsports (DVD)

DSP Group (DSPG)

DST Systems (DST)

DuPont Fabros Technology (DFT)

Eli Lilly (LLY)

Embraer (ERJ)

Energy Partners (EPL)

Enterprise Products Partners (EPD)

Exxon Mobil (XOM) puts

First Business Financial (FBIZ)

Flamel Technologies (FLML)

Fortress Investment Group (FIG)

Franklin Resources (BEN)

GAIN Capital Holdings (GCAP)

Gentherm (THRM)

Gibraltar Industries (ROCK)

Harley-Davidson (HOG) calls/ puts

Harman International (HAR)

Harte-Hanks (HHS)

Harvard Bioscience (HBIO)

Helmerich & Payne (HP)

Hershey (HSY) calls

hhgregg (HGG) puts

Hillshire Brands (HSH)

Hudson Global (HSON)

ICG Group (ICGE)

IDEX (IEX)

Imperial Oil (IMO)

Infineon Technologies (IFNNY)

Inventure Group (SNAK)

Invesco (IVZ)

Investment Technology Group (ITG)

ITT Educational Services (ESI)

Journal Communications (JRN)

Kelly Services (KELYA)

Kemet (KEM)

Kennametal (KMT)

Kopin (KOPN)

L-3 Communications Holdings (LLL)

Lakeland Bancorp (LBAI)

Landstar System (LSTR)

LKQ (LKQ)

LNB Bancorp (LNBB)

LoJack (LOJN) Watch List

Lumos Networks (LMOS)

MakeMyTrip Limited (MMYT) puts

Manpower (MAN)

MarineMax (HZO)

Media General (MEG)

Mednax (MD)

MGM Resorts (MGM) calls/ puts

Mizuho Financial Group (MFG)

Multimedia Games Holding (MGAM)

Niska Gas Storage Partners (NKA)

Northrop Grumman (NOC)

Nutraceutical International (NUTR)

Occidental Petroleum (OXY)

Ocwen Financial (OCN)

Orion Marine Group (ORN)

Overstock.com (OSTK)

Pantry (PTRY)

Park Sterling Bank (PSTB)

PDC Energy (PDCE)

Peabody Energy (BTU)

Pitney Bowes (PBI)

Potash (POT) calls/ puts

Prologis (PLD)

Provident Financial Holdings (PROV)

PulteGroup (PHM)

Quest Diagnostics (DGX)

Raytheon (RTN)

Reis (REIS)

Reliv International (RELV)

Royal Dutch Shell (RDS.A)

Royal Dutch Shell (RDS.B)

Royal Gold (RGLD)

Ryland Group (RYL)

Sherwin-Williams (SHW)

Standard Motor Products (SMP)

Standex International (SXI)

State Bank Financial (STBZ)

Station Casinos (STN)

Steven Madden (SHOO)

Stoneridge (SRI)

Suffolk Bancorp (SUBK)

Suncoke Energy Partners (SXCP)

SunCoke Energy (SXC)

Swift Energy (SFY)

Symmetry Medical (SMA)

Technip (TKPPY)

TECO Energy (TE)

Telecom Argentina (TEO)

Telenor (TELNY)

Tenneco (TEN)

Tessera Technologies (TSRA)

The Brinks Company (BCO)

Thermo Fisher Scientific (TMO)

Time Warner Cable (TWC)

Timken (TKR)

TransAlta (TAC)

Transtechnology (BZC)

Ultratech (UTEK)

Under Armour (UA) calls

United Bankshares (UBSI)

United Parcel Service (UPS)

USA Truck (USAK)

Utah Medical Products (UTMD)

Valeant Pharmaceuticals (VRX)

Valley National Bancorp (VLY)

Viacom (VIAB)

Viacom (VIA)

Visa (V) calls

WESCO International (WCC)

Whirlpool (WHR)

World Acceptance (WRLD)

XCEL Energy (XEL)

Zimmer Holdings (ZMH)

 

After the close:

ABAXIS (ABAX)

Accuray (ARAY)

Agilysys (AGYS)

Align Technology (ALGN)

Aluminum Corp. of China (ACH)

Amazon.com (AMZN)

American Financial Group (AFG)

Arabian American Development (ARSD)

Aspen Technology (AZPN)

Aviat Networks (AVNW)

BankFinancial (BFIN)

Bar Harbor Bankshares (BHB)

Berry Plastics Group (BERY)

Bill Barrett (BBG)

Bottomline Technologies (EPAY)

Brightcove (BCOV)

Broadcom (BRCM)

C.R. Bard (BCR)

Camden Property Trust (CPT)

Canadian National Railway (CNI)

Capitaland (CLLDY)

Cardica (CRDC)

Cavco Industries (CVCO)

CEC Entertainment (CEC)

Celadon Group (CGI)

Celestial (CLS)

Cepheid (CPHD)

Chefs’ Warehouse (CHEF)

Chipotle Mexican Grill (CMG) calls/ puts

Chubb (CB)

Clovis Oncology (CLVS)

Computer Programs and Systems (CPSI)

Consolidated Edison (ED)

Constant Contact (CTCT)

Cover-All Technologies (COVR)

Credit Acceptance (CACC)

CSC (CSC)

Cytec Industries (CYT)

DFC Global (DLLR)

Eastman Chemical (EMN)

Emulex (ELX)

EnteroMedics (ETRM)

Essex Property Trust (ESS)

FedFirst Financial (FFCO)

First Bancorp (FBNC)

First Capital Bancorp (FCVA)

First Financial Bancorp. (FFBC)

Google (GOOG) calls/ puts

Green Dot (GDOT)

Griffon (GFF)

GSI Technology (GSIT)

Hampton Roads Bankshares (HMPR)

Harris Teeter Supermarkets (HTSI)

Haynes International (HAYN)

Hi-Crush Partners (HCLP)

Immersion (IMMR)

IntelliPharmaCeutics (IPCI)

Investors Bancorp (ISBC)

Iridex (IRIX)

JDS Uniphase (JDSU) Watch List

Jefferson Bancshares (JFBI)

Key Technology (KTEC)

Lantronix (LTRX)

LightPath Technologies (LPTH)

Macatawa Bank (MCBC)

Manitowoc (MTW)

Marlin Business Services (MRLN)

MasTec (MTZ)

MBT Financial (MBTF)

McKesson (MCK)

Micrel (MCRL)

Micros Systems (MCRS)

MTS Systems (MTSC)

National Instruments (NATI)

Natural Grocers (NGVC)

NetSuite (N)

NewMarket (NEU)

Northeast Bancorp (NBN)

Oclaro (OCLR)

Omnicell (OMCL)

Oneida Financial (ONFC)

Orient Express Hotels (OEH)

PC Connection (PCCC)

PerkinElmer (PKI)

Pixelworks (PXLW)

PMC-Sierra (PMCS)

Proofpoint (PFPT)

Reinsurance Group RGA)

Riverbed Technology (RVBD)

Riverview Bancorp (RVSB)

ScanSource (SCSC)

Selectica (SLTC)

Selective Insurance Group (SIGI)

Silicon Image (SIMG)

Sonic Foundry (SOFO)

Southside Bancshares (SBSI)

Sterling Financial (STSA)

SurModics (SRDX)

Symetra Financial (SYA)

TeleCommunication Systems (TSYS)

TeleNav (TNAV)

TFS Financial (TFSL)

Tuesday Morning (TUES)

Unisys (UIS)

Universal Technical Institute (UTI)

Unwired Planet (UPIP)

UQM Technologies (UQM)

Validus Holdings (VR)

Virtusa (VRTU)

Washington Banking (WBCO)

Wesco Aircraft (WAIR)

West (WSTC)

WSFS Financial (WSFS)

Wynn Resorts (WYNN)

Zoltek (ZOLT)

 

Friday

Before the open:

AbbVie (ABBV) calls

Accuride (ACW)

AON (AON)

Asahi Glass (ASGLY)

Autoliv (ALV)

Banco Bilbao Vizcaya Argentaria (BBVA)

Berkshire Hathaway (Holding (BRK.B)

Blount International (BLT)

Blyth (BTH)

Booz Allen Hamilton (BAH) calls

Brookfield Properties (BPO)

Capital Properties (CPTP)

Chevron (CVX)

Consol Energy (CNX)

Coronado Biosciences (CNDO)

CVR Energy (CVI)

CVR Partners (UAN)

Digirad (DRAD)

Dominion Resources (D) calls

DrilQuip (DRQ)

Furmanite (FRM)

Graham (GHM)

H&E Equipment Services (HEES)

Honda Motor (HMC)

Immunogen (IMGN)

Johnson Outdoors (JOUT)

KKR Financial Holdings (KFN)

Knight Capital Group (KCG)

Lancaster Colony (LANC)

Lear (LEA)

Legg Mason (LM)

Louisiana Bancorp (LABC)

LyondellBasell Industries (LYB)

Makita (MKTAY)

Mastercard (MA) calls/ puts

Mattel (MAT) puts/ calls

Mead Johnson Nutrition (MJN)

Modine Manufacturing (MOD)

Monarch Community Bancorp (MCBF)

National Oilwell Varco (NOV)

Natural Resource Partners (NSP)

Newell Rubbermaid (NWL)

DoCoMo (DCM)

OM Group (OMG)

Oppenheimer Holdings (OPY)

Osiris Therapeutics (OSIR)

PACCAR (PCAR)

Premcor (PCO)

Provident Financial Services (PFS)

Ruths Chris Steak House (RUTH)

Saia (SAIA)

Shenandoah Telecommunications (SHEN)

Simon Property Group (SPG)

Tyco International (TYC)

Tyson Foods (TSN)

Ultra Petroleum (UPL)

Viad (VVI)

Weyerhaeuser (WY)

WisdomTree Investments (WETF)

 

After the close:

Bank of Commerce Holdings (BOCH), Berkshire Hathaway (BRK.A), Brown & Brown (BRO), Chunghwa Telecom (CHT), First Federal of Northern Michigan (FFNM), NeoPhotonics (NPTN), New Century Bancorp (NCBC), Prudential Bancorp (PBIP), Seaboard (SEB), UNITED SECURITY BANKSHARES (USBI), Weis Markets (WMK)

 

= = = = = = = = = = = = =

 

4.  Weekly Wrap Covered Call Portfolio Update (Closing prices as of 1/24/14)

Our Weekly Wrap Closed Trade Track Record for 2014 is 6-1 (91-8, overall since the start of 2011). 

Special Notice:  We closed Galena Biopharma (GALE, $5.70, down $0.41) last Tuesday after shares went on a wild ride.  The stock opened at $7.06 and took a nasty dive to $5.55 to trigger both our $6.25 and $6 stop limit orders. Millennial Media (MM, $7.34, down $0.24) also hit our Stop Limit of $7. 

 

Current Trades 

Discovery Laboratories (DSCO, $2.35, down $0.18) Stock Trade

Original Entry Price:  $2.42 (1/7/14)

Lowered Price from Selling Options:  $2.42

Exit Target:  $4.50-$5

Return:  -2%

Stop Target:  $1

 

Discovery Laboratories (DSCO, $2.35, down $0.18) Covered Call Stock/ Option Trade

Sold April 3 calls (DSCO140419C00003000, $0.20, down $0.05)

Original Entry Price:  $2.42 (1/7/14)

Lowered Price from Selling Options:  $2.17

Exit Target:  $4.50-$5

Return:  10%

Stop Target:  $1

Action:  Shares traded to a high of $2.53 to start the week but tumbled 5% Friday to test support at $2.30.  A close below this level could lead to $2.20-$2.10.  Resistance is at $2.50.

DSCO12614

On 1/7/2014 we recommended buying shares at $2.42 and selling the April 3 calls for 25 cents to lower our cost basis to $2.17.  If we are called away in mid-April at $3 the trade will make 39%. 

 

Opko Health (OPK, $8.46, down $0.37) LEAP Option Trade

March 10 calls (OPK140322C00010000, $0.30, down $0.10) LEAP OPTION

Original Entry Price:  $0.70 (12/17/13)

Exit Target:  $1.40-$2.10

Return:  -57%

Stop Target:  None

Action:  Shares made a run past $9 midweek after trading up to $9.15 but ended just below this level.  Support at $8.50 was tested on Friday’s 54% drop and the close below this level gets $8.25-$8 in play.

OPK12614

Ariad Pharmaceuticals (ARIA, $8.99, up $1.47) Stock Trade

Original Entry Price:  $4.95 (10/25/13)

Lowered Price from Selling Options:  $4.95

Exit Target:  $8-$10

Return:  82%

Stop Target:  $6.25, raise to $7 (Stop Limit)

Action:  Shares tried to clear $7 to start the week but after kissing $6.95 they slipped to a low of $6.46 before closing at $6.60 on Tuesday.  The dip below $6.50 got our Stop Limit in play but support held again on Wednesday after a dip to $6.41.  The push past $7 on Thursday started in after-hours trading on Wednesday with the high checking in at $7.56 and close of $7.52.  We mentioned last week and again Friday morning “if $7.75 clears the floodgates could open for a surge past $10”.  Friday’s peak reached $9.83 and we mentioned a possibly run to $13-$13.50 could come once double-digits trigger.  Support will try to hold at $7.75 and prior resistance on any pullback.

We have raised the Stop Limit from $6.25 to $7 in case Friday was a short-term top but we are looking for a continued move higher after we broke the takeover talk last week.  The financial news here in the US picked up an overseas story we hunted down a day before it hit the newswires here at home.

The water cooler talk is that Eli Lilly has made a “friendly approach” to buy the company and is willing to pay up to $20 a share.  GlaxoSmithKline is also in the hunt along with Shire.

We have said there is a HUGE gap to fill on the stock’s drop from $23 to a 52-week low of $2.  Eli is trying to get the company for cheap as it currently has a $1.25 billion market-cap.  If the action heats up, shares should be over $10 in the next week or two.

ARIA12614

Here was last week’s chart for ARIA showing the trading range with the potential breakout to $9.

ARIA12014

H&R Block (HRB, $28.08, down $0.92)

April 32 calls (HRB140419C00032000, $0.35, down $0.15) LEAP Option

Original Entry Price:  $0.95 (11/5/13)

Exit Target:  $1.90+

Return:  -63%

Stop Target:  None

Action:  Shares tested support at $28.50 on Tuesday but made a run at $29.50 midweek after closing at $29.34 and session highs.  H&R held $29 on Thursday before Friday’s 2% drop below support at $28.50.  There is risk down to $27.50 on a continued pullback.  A run past $29 would be bullish but we wouldn’t initiate new positions until shares clear $29.50-$30.

HRB12614

Boston Scientific (BSX, $13.34, down $0.31) Stock Trade

Original Entry Price:  $12.29 (10/21/13)

Lowered Price from Selling Options:  $12.29

Exit Target:  $15

Return:  9%

Stop Target:  $13.00, raise to $13.25 (Stop Limit)

Action:  Shares set another 52-week high to start the week after kissing $14.02 on Tuesday and $14.08 on Wednesday.  BSX tested support at $13.50 on Thursday and traded down to $13.35 on Friday.  The next wave of support is at $13 and we have raised our Stop Limit from this level to $13.25 to protect profits.  A close back above $13.50-$13.75 would be bullish for another run past $14.  Our return will be 8% if our Stop Limit is triggered.

BSX12614

Pizza Inn Holdings (PZZI, $7.55, down $0.34) Stock Trade

Original Entry Price:  $8.10 (10/11/13)

Lowered Price from Selling Options/ Dividends:  No options available

Exit Target:  $12+

Return:  -7%

Stop Target:  $7

Action:  Pizza Inn tested support at $7.75-$7.50 on Friday.  There could be further risk down to $7.25-$7 with resistance now at $7.75 and then $8.

The company has 150 Pie Five shops opening this year and is expanding rapidly.  We believe this will be a $15-$20 stock in 1-2 years and insiders own nearly 40% of the company.

PZZI12614

Sonus Networks (SONS, $2.95, down $0.10)

Original Entry Price:  $3.73 (9/9/13)

Lowered Price from Selling Options:  $3.73

Exit Target:  $5

Return:  -21%

Stop Target:  $2.50

Action:  Shares cleared near-term resistance at $3 before giving back this level on Friday.  Support is at $2.90 followed by $2.75.  Earnings are due out on February 20.

SONS12614

DryShips (DRYS, $3.38, down $0.39)

Original Entry Price:  $5.25 (1/3/11)

Lowered Price from Selling Options:  $4.60

Exit Target:  $6, lower to $5

Return:  -27%

Stop Target:  $2

Action:  Shares could be headed for a test to $3 and longer-term support if there is no rebound back above $3.50 this week.

DRYS12614

 

Trades on HOLD (6):  AKS Steel Holding (AKS), Rambus (RMBS), Bebe Stores (BEBE), Vivus (VVUS), Dendreon (DNDN). Millennial Media February 10 calls (from October 2013) LEAP Option

 

= = = = = = = = = = = = = = =

 

5.  Week Ahead 

Here is a chart of the events for the week ahead:

Ecocal12614