1:35pm (EST)

I’ve talked about the upcoming 2Q earnings season for a few weeks now but often remind readers there is still plenty of action EVERY month and nearly every day in the market reporting earnings.

This week there are a number of interesting possible option plays but I also remind subscribers they are risky because a number of factors have to play out just right to get the big payoff.  However, with chart work and homework you do better your odds of being successful.

This week, Micron Technology (MU) and Sonic (SONC) report after today’s close.

Walgreen (WAG) reports on Tuesday morning with Apogee Enterprises (APOG) and The9 (NCTY) coming after the close.

Wednesday is a BIG day for a couple of stocks I’m bearish on.  Ahead of the open, Apollo Education Group (APOL) steps up to the plate along with Barnes & Noble (BKS), Carnival (CCL), General Mills (GIS), Lennar (LEN) and Monsanto (MON).

After the close, I will be watching the action in Bed Bath & Beyond (BBBY).  H.B. Fuller (FUL), Herman Miller (MLHR) and Progress Software (PRGS) also report earnings.

Thursday is a busy day with Accenture (ACN), ConAgra Foods (CAG), Golden Energy Marine (SHIP), McCormick & Co (MKC), Schnitzer Steel Industries (SCHN), Winnebago Industries (WGO) and Worthington Industries (WOR) confessing ahead of the open.  All eyes will be on Nike (NKE) after the close.

Ahead of Friday’s open, Finish Line (FINL) and KB Home (KBH) will update Wall Street with their numbers.

The bears are trying to snap a 9-session Monday skid and have held the blue-chips down for the first half of trading.  The bulls are looking to make it to double-digits for Monday and Dow higher closes and have kept the losses in check.

The Dow is down 35 points 16,911 while the S&P 500 is slipping 3 points to 1,960.  The Nasdaq is lower by 4 points to 4,363 and the Russell 2000 is declining 3 points to 1,185.

I am watching these stocks for a possible option trade but I have a New Trade that isn’t an earnings trade for now.  There are a number of Profit Alerts as well.

Closed Trades for 2014: 56-33 – the Weekly Wrap is 16-4 (80%) for 2014 (101-11, 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 the 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.

 

 

NEW TRADE!!!

General Motors (GM, $36.63, up $0.41)

Buy to OPEN September 32 puts (GM140920P00032000, $0.40, down $0.05)

Action:  I believe shares will make a dramatic back test to $30 if $36-$35 fails to hold.  I like the September puts for the longer-term and the July puts for a drop below $36.  There is risk to $37.50 but I am looking for $36.75-$37 to hold.

CVS Caremark (CVS, $76.08, down $0.71)

August 80 calls (CVS140816C00080000, $0.45, down $0.20)

Entry Price:  $0.60 (6/18/2014)
Exit Target:  $1.20
Return:  0%
Stop Target:  60 cents (Stop Limit)

Action:  The calls opened at 60 cents.  I had a feeling the Stop Limit would trigger this morning with shares showing weakness on Friday.  I will keep CVS on the Watch List and may recommended at a later date but for now another test to support is likely.

BlackBerry (BBRY, $10.08, up $0.27)

August 9 calls (BBRY140816C00009000, $1.40, up $0.20)

Entry Price:  $0.45 (6/18/2014)
Exit Target:  $0.90 (closed half @ 85 cents on 6/19/14)
Return:  150%
Stop Target:  90 cents (Stop Limit)

Action:  Close another QUARTER of the trade at current levels.

Shares have cleared double-digits and are near session highs.

Rambus (RMBS, $14.57, down $0.12)

August 15 calls (RMBS140816C00015000, $0.75, down $0.05)

Entry Price:  $0.40 (6/13/2014)
Exit Target:  $1.20 Limit Order (closed half @ 80 cents on 6/17/14)
Return:  94%
Stop Target:  70 cents (Stop Limit)

Action:  A close above $14.70 keeps $15 in play.  I have said a move above $15 could lead to $18-$20 over the next 3-6 months.

Support is at $14.50 with backup at $14.  I have a Stop Limit of 70 cents on the other half of the trade.

Imax (IMAX, $27.56, down $0.21)

September 28 calls (IMAX140920C00028000, $1.20, down $0.20)

Entry Price:  $0.60 (6/5/2014)
Exit Target:  $1.20 (closed half @ $1.30 on 6/16/14)
Return:  108%
Stop Target:  $1.20 (Stop Limit)

Action:  The Stop Limit of $1.20 has triggered.  The other half of the trade is now closed.

Limelight Networks (LLNW, $3.03, up $0.04)

September 3 calls (LLNW140920C00003000, $0.40, flat)

Entry Price:  $0.15 (6/4/2014)
Exit Target:  $0.45
Return:  167%
Stop Target:  None

December 3 calls (LLNW141220C00003000, $0.50, flat)

Entry Price:  $0.20 (6/4/2014)
Exit Target:  $0.60
Return:  150%
Stop Target:  None

Action:  A close above $3.25 should get shares rolling again.  Support is at $2.75.

Previous comments:

Shares traded to a high of $3.25 last Monday after Tuition Build offered roughly $645 million, or $6.55 a share, for Limelight.  The company dismissed the Silicon Valley’s private-equity firm’s offer after basically saying they weren’t experienced enough to run the business.

I have been suggesting a buyout offer would come for Limelight Networks with the company’s cheap market cap and said they would make a very luscious takeover target.

Its litigation issues have decreased dramatically following their recent win against AKAM and they are open to a much bigger marriage.

Bed, Bath & Beyond (BBBY, $61.22, up $1.15)

August 55 puts (BBBY140816P00055000, $0.65, down $0.10)

Entry Price:  $0.63 (5/14/14)
Exit Target:  $1.25
Return:  3%
Stop Target:  None

Action:  Close the trade at current levels.

Earnings are due out on Wednesday.  I have been calling for a drop to double-nickels on a close below $60 but I don’t like today’s action.

Shares could move 10+%, or $5-$6, depending on how their numbers and outlook come in.

I may look at the July puts for a quick one-day trade if resistance holds but for now, I want to get out of these puts.

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.

McDonald’s July 95 puts (from May 2014) – continue to hold
Apollo Group
August 23 puts (from April 2014) earnings are due out Wednesday – continue to hold