3:15pm (EST)


“It has been funny seeing the analyst upgrades north of $700 in recent weeks for Apple but they haven’t mentioned the upcoming split…”

I mentioned this in last night Weekly’s Wrap and again in this morning’s Daily and sure enough, Apple  (AAPL, $624.86, down $8.14) has been a constant word flowing out of the talking heads mouths today.

Today is the “record date” to get additional Apple shares for current stockholders.  This basically means if you own the stock by today’s close you will get 6 additional shares after Friday’s close, or the split date.

Splits don’t mean much in the grand scheme of the things as your “investment” is still the same.  However, most rookie investors will be chomping at the bit to get the split-adjusted price.

I will be more focused on the OPTIONS on Apple afterwards as the options will become so much more cheaper to trade.

I would rather take 3 (70-cent) trades on at or near-the-money option trades rather than paying for a $2 option trade way out-of-the-money which is usually the case on stocks that trade in the triple-digits.

At current levels, shares would trade just south of $90 next Monday (6/9).  This will be the ex-date

Apple shares are weighing on Tech but overall, the bulls are still pushing new highs.

The Dow is up 23 points to 16,740 while the S&P 500 is higher by a point to 1,924.  The Nasdaq is down 10 points to 4,232 and the Russell 2000 is declining 4 points to 1,130.

Entry Price:  $0.70 (4/28/2014)
Exit Target:  $1.40 (limit order to close half)
Return:  0%
Stop Target:  None

Action:  The close below $27 and the 200-day MA opened the door for another test to $26.  A break this level should lead to the low $20’s.  Strong resistance is at $28.

Bed, Bath & Beyond (BBBY, $61.02, up $0.17)

June 60 puts (BBBY140621P00060000, $0.65, flat)

Entry Price:  $0.60 (5/14/2014)
Exit Target:  $1.20
Return:  8%
Stop Target:  None

August 55 puts (BBBY140816P00055000, $0.60, flat)

Entry Price:  $0.63 (5/14/2014)
Exit Target:  $1.25
Return:  -5%
Stop Target:  None

Action:  Support is at $60 and a break below this level will likely lead to $57.50-$55.  An analyst downgrade would be nice this week. Resistance is at $61.50-$62.50.

Twitter (TWTR, $32.34, down $0.10)

January 50 calls 2015 (TWTR150117C00050000, $1.20, flat) LEAP option

Entry Price:  $1.75 (5/8/2014)
Exit Target:  $3.50-$5
Return:  -31%
Stop Target:  None

Action:  Support has moved up to $32.50.  Resistance is at $35.

McDonald’s (MCD, $101.95, up $0.52)

July 95 puts (MCD140719P00095000, $0.25, down $0.05)

Entry Price:  $0.70 (5/6/2014)
Exit Target:  $1.40
Return:  -64%
Stop Target:  None

Action:  The break below $101.50 was bearish and a close below $100 should get this trade moving in the right direction.  There is risk to $105.  These options have nearly 2 months before they expire so there is plenty of time for the trade to play out.

Other 2014 Portfolio OPEN positions (2):  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 2014 Portfolio link in the Members Area to view ALL open/ closed trades.

iShares Russell 2000 June 103 puts (from May 2014)
Kirkland’s June 15 puts (from May 2014)

Member’s Area


Closed Trades for 2014: 48-28 – the Weekly Wrap is 14-3 for 2014 (99-10, or 91% win rate, since 2011) and is designed for traders that want to use options with less risk.  All trades are dated and time stamped so new subscribers can look at our past history to see how the trades have played out.

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 12pm-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.

Fortinet (FTNT, $22.05, down $0.42)

July 24 calls (FTNT140719C00024000, $0.40, down $0.05)

Entry Price:  $0.45 (5/30/2014)
Exit Target:  $0.90
Return:  -11%
Stop Target:  None

Action:  Shares are setting up for a run past $25. The 52-week high is just below $24 and if momentum catches, shares could run to $30.  Support is at $22 and the 50-day MA.

CVS Caremark (CVS, $78.43, up $0.10)

July 80 calls (CVS140719C00080000, $0.80, flat)

Entry Price:  $0.52 (5/28/2014)
Exit Target:  $1.10 (closed 1/3 @ $0.80 on 5/30/14)
Return:  54%
Stop Target:  60 cents (Stop Limit)

Action:  I’m expecting a run past $80 over the month.  Short-term support is at $77 followed by $75.

Apollo Group (APOL, $26.64, down $0.16)

June 25 puts (APOL140621P00025000, $0.40, flat)

Entry Price:  $0.55 (4/28/2014)
Exit Target:  $1.10 (limit order to close half)
Return:  -27%
Stop Target:  None

August 23 puts (APOL140816P00023000, $0.70, flat)


I will be back in the morning with a full report.