12:30pm (EST)
It is always nice to make 100% on an option trade, especially in 2 weeks, but sometimes the market moves just enough to knock you out of a position that you really feel good about. It is also possible to play a continued run on a stock so it is important to keep it on your Watch List in case shares break to new highs.
We recently did some research work for our Weekly Wrap on Seagate Technology (STX, $25.53, up $4.39) which is soaring today after beating Wall Street’s expectations. The homework led us to a great opportunity as we saw shares were on a roll and the momentum was building. On January 6, 2012 we recommended the February 19 calls (STX120218C00019000, $6.50, up $4.20) at 70 cents and we were out at $1.20 and $1.60 a few weeks later which gave us an average selling price of $1.40, or a double from our entry price.
Here is the chart work we did for the stock:
We took our eye off the prize because our portfolio is pretty full and we missed today’s move although some of our subscribers who use our Watch List are happy campers. Shares had stalled at $20 but here are the trades we have kept on our Watch List since last week and our thoughts this morning (quotes are from yesterday’s close):
Seagate Technology (STX, $21.14, up $0.25)
February 21 calls (STX120218C00021000, $1.05. up $0.05)
March 21 calls (STX120317C00021000, $1.35, up $0.05)
Thoughts: For those of you in this trade, you are going to get paid today after the company came in with above the bar numbers.
We said a pop to $22 would come if $20 is cleared but shares could reach $25 on a blue-sky breakout. (END)
Well, the (STX120218C00021000, $4.50. up $3.45) are up over 300% today and the March 21 calls (STX120317C00021000, $4.65, up $3.30) are up nearly 250%. Obviously, if you are in these trades, lock up profits.
Of course, we can’t take credit for the trades because we didn’t officially release them again but we can take credit for the 100% return in January for the one we did. However, we do feel bad for not following through on our research but we are doing cartwheels for the subscribers who do use the Watch List.
We did close five 100+% winners in January and we are close to bagging a big one. Trust us.
You never know, some of our current trades could take the same path as Seagate Technology.
The bulls are pushing resistance after good news out of China. We are also hearing rumors that Greece is “hours” away from cutting a deal with its private bond holders. We have heard this “wolf” cry before but hopefully the European leaders can get a deal done here soon which will bullish for the market.
Currently, the Dow is up 137 points to 12,770 while the S&P 500 is higher by 15 points to 1,327. The Nasdaq is showing a pop of 33 points to 2,847.
We have some nice pin action on a few trades so let’s go check the tape. Subscribers, hit the Members Area for the updates.
