The bulls are working on a 3-session win streak following another Tuesday win that has pulled them back above resistance. The bears are showing signs of weakening but they are still clawing and can strike quickly. Although the action has been flat, volatility could pick up starting with the Fed heads today and the rest of the week with June options expiring Friday.
The Dow darted 27 points higher, or 0.2%, to finish at 16,808. The blue-chips traded to a low of 16,732 on the open but were in a steady uptrend throughout the second half of trading after reaching a peak of 16,823. The index is 1% away from its recent all-time high of 16,970 and the close back above 16,800 was bullish. Support remains at 16,700-16,600.
The S&P 500 added 4 points, or 0.2%, to settle at 1,942. The index kissed a low of 1,933 and easily held support at 1,925 before closing above the 1,940 level. The bulls pushed 1,943 ahead of the closing bell but needs to clear 1,950 to get all-time highs in play again.
The Nasdaq soared 16 points, or 0.4%, to close at 4,337. Tech made a 10-point drop to 4,311 and held support at 4,300 before making a run to 4,350. The bulls touched 4,346 before some slippage into the close. A close above 4,350 would get the March 52-week high of 4,371 back in play.
The Russell 2000 zoomed nearly 10 points, or 0.8%, to end at 1,176. The small-caps dipped to 1,163 and held support at 1,160 before making a strong run past resistance. The index closed above the 1,175 level after testing 1,179 and puts the bulls back on the 1,200 path.
The S&P 500 Volatility Index ($VIX, 12.06, down 0.59) dropped nearly 5% and back below the 12.50 level. A close below 11.50 would signal higher highs are in store.
The current trades are performing super well as there are 6 trades up over 100%. I have locked-in half profits on a number of them and I mentioned there were New Trades coming.
I have one for today I like and want to see how shares open. Look for a possible new recommendation in the midday update but for now, let’s go check on the amazing gains we have in play.
Closed Trades for 2014: 51-30 – the Weekly Wrap is 15-4 (79%) for 2014 (100-11, or 90% 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.
Rambus (RMBS, $14.55, up $0.17)
August 15 calls (RMBS140816C00015000, $0.80, up $0.10)
Entry Price: $0.40 (6/13/2014)
Exit Target: $0.80-$0.90, raise to $1.20 Limit Order (Closed half @ 80 cents on 6/17/14)
Stop Target: 50 cents (Stop Limit)
Action: I suggested closing half the trade yesterday after shares made a run to $14.70. Although the calls fell short of the 90 cent limit order, I still wanted to take half profits at 100%. I have raised the exit target on the other half to $1.20 and have made it a limit order that should trigger if shares clear $15.
I have a Stop Limit of 50 cents on the other half of the trade.
Hercules Offshore (HERO, $4.97, down $0.02)
October 5 calls (HERO141018C00005000, $0.55, flat)
Entry Price: $0.35 (6/11/2014)
Exit Target: $0.70
Stop Target: None
Action: A trip to $6 is in store if Hercules can hold $5. Support is at $4.80.
Imax (IMAX, $28.06, up $0.21)
September 28 calls (IMAX140920C00028000, $1.45, up $0.10)
Entry Price: $0.60 (6/5/2014)
Exit Target: $1.20 (closed half @ $1.30 on 6/16/14)
Stop Target: $1, raise to $1.10 (Stop Limit)
Action: Shares made a late day run past resistance at $28 and ended a penny off their high. A run to $30 is in the works as long as $28 can hold. I have a stop limit order of $1 on the other half that I am raising to $1.10 to protect continued profits.
Limelight Networks (LLNW, $2.98, flat)
September 3 calls (LLNW140920C00003000, $0.40, flat)
Entry Price: $0.15 (6/4/2014)
Exit Target: $0.45
Stop Target: None
December 3 calls (LLNW141220C00003000, $0.50, flat)
Entry Price: $0.20 (6/4/2014)
Exit Target: $0.60
Stop Target: None
Action: I would like to see a close above $3.25 this week. Support is at $2.75.
Fortinet (FTNT, $24.34, up $0.17)
July 25 calls (FTNT140719C00025000, $0.65, up $0.10)
Entry Price: $0.25 (6/4/2014)
Exit Target: $0.50 (closed half @ $0.45 on 6/11/14)
Stop Target: 40 cents, raise to 50 cents (Stop Limit)
July 24 calls (FTNT140719C00024000, $1.10, up $0.10)
Entry Price: $0.45 (5/30/2014)
Exit Target: $0.90 (closed half @ $0.80 on 6/11/14)
Stop Target: 80 cents, raise to 90 cents (Stop Limit)
Action: Shares traded to another 52-week high of $24.57 yesterday. I have raised the Stop Limits on both positions to 50 cents and 90 cents, respectively.
Twitter (TWTR, $38.02, flat)
January 50 calls 2015 (TWTR150117C00050000, $2.30, flat) LEAP option
Entry Price: $1.75 (5/8/2014)
Exit Target: $3.50 (closed half @ $2.10 on 6/12/14)
Stop Target: $1.80 (Stop Limit)
Action: A run to $40 is still in the works. Support is at $35 and is moving up.
Bed, Bath & Beyond (BBBY, $60.55, up $0.22)
June 60 puts (BBBY140621P00060000, $0.25, down $0.10)
Entry Price: $0.60 (5/14/14)
Exit Target: $0.90 (Limit Order)
Stop Target: None
August 55 puts (BBBY140816P00055000, $0.50, flat)
Entry Price: $0.63 (5/14/14)
Exit Target: $1.25 (Limit Order)
Stop Target: None
Action: The break even point on the June puts is at $59.40, technically, by Friday’s close as the entry price was 60 cents. I do not want to carry the trade into Friday but might have too. I have set Limit Orders to exit the trade at 90 cents.
The August puts still have plenty of time to wait for a continued breakdown. Earnings are due out next week.
Other 2014 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 2014 Portfolio link in the Members Area to view ALL open/ closed trades.
iShares Russell 2000 June 103 puts (from May 2014) – continue to hold
McDonald’s July 95 puts (from May 2014) – continue to hold
Apollo Group – continue to hold
June 25 puts (from April 2014)
August 23 puts (from April 2014)