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 “Trade Update” 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 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. Closed Trades for 2012 (131-43, or 75% win rate, including Weekly Wrap which is 24-0).
1:50pm (EST)
JC Penney (JCP, $24.70, up $0.41)
November 22 puts (JCP121117P00022000, $0.85, down $0.10)
Entry Price: $0.95 (9/28/12)
Exit Target: $1.90
Return: -11%
Stop Target: None
Action: The chart from this morning showed risk up to $26 but we are looking for a close below $25 today. We have closed 2 JCP put trades for 100% returns, 1 in August, and 1 last week and we are looking for this trade to do the same by mid-November. We have a longer-term target of the low teens for JCP.
First Solar (FSLR, $22.23, up $0.08)
October 20 puts (FSLR121020P00020000, $0.90, flat)
Entry Price: $0.85 (9/28/12)
Exit Target: $1.70
Return: 6%
Stop Target: None
Action: We are expecting a test down to $20 and the 50-day MA this week. Resistance is at $24 but the decline should pick up steam once $22 cracks.
Tiffany & Co. (TIF, $61.37, down $0.51)
October 60 puts (TIF121020P00060000, $1.05, up $0.10)
Entry Price: $1.25 (9/26/12)
Exit Target: $2.50
Return: -16%
Stop Target: None
Action: We would like to see a drop below $60 this week which would get the 50-day MA in play. A move below this level could lead to double-nickels if $58 fails to hold. Resistance is at $63.
Buffalo Wild Wings (BWLD, $85.58, down $0.16)
November 70 puts (BWLD121117P00070000, $1.15, down $0.05)
Entry Price: $1.25 (9/26/12)
Exit Target: $2.20
Return: -8%
Stop Target: None
Action: There is risk for a back test to $87 this week but we are looking for a drop down to $82. A break below this level will get $80 and all the MA’s in play.
TiVo (TIVO, $10.28, down $0.15)
November 10 calls (TIVO121117C00010000, $0.70, down $0.15)
Entry Price: $0.70 (9/25/12)
Exit Target: $1.40
Return: 0%
Stop Target: None
Action: Shares traded up to $10.45 twice last week and you can see resistance at $10.50 on the chart is strong. A move above this level should lead to a run at $11-$11.50. Support should hold at $10 on a pullback which was prior resistance.
KLA-Tencor (KLAC, $47.57, down $0.14)
October 45 puts (KLAC121020P00045000, $0.40, flat)
Entry Price: $0.55 (9/20/12)
Exit Target: $1.10
Return: -27%
Stop Target: None
Action: We got into this trade after shares broke below $50 which should serve as resistance going forward. The low of $46.42 came midweek and shares could test the low $40’s on a break below $46.
Akamai Technologies (AKAM, $38.05, down $0.21)
October 40 calls (AKAM121020C00040000, $0.50, flat)
Entry Price: $0.90 (9/17/12)
Exit Target: $1.80
Return: -44%
Stop Target: None
Action: A move above $40 would be super bullish and could lead to a test of $42.50 which would get these calls options north of $2. Support has been strong at $38-$37.50 but a drop below this level could force us out of the trade as these options expire in less than 3 weeks.
Taiwan Semiconductor Manufacturing (TSM, $15.86, up $0.04)
October 15 calls (TSM121020C00015000, $0.90, flat)
Entry Price: $0.45 (9/11/12)
Exit Target: $0.90 (closed HALF at 80 cents on 9/28/12)
Return: 89%
Stop Target: 45 cents
January 15 calls (TSM130119C00015000, $1.35, flat)
Entry Price: $0.90 (9/11/12)
Exit Target: $1.80
Return: 50%
Stop Target: 90 cents
Action: Friday’s high was $15.83 and we are looking for shares to challenge the 52-week high of $16.15 this week. If cleared, shares could make a run at $20. Support at $15, which was prior resistance, should hold on a back test but we will exit all positions if shares retreat.
Solazyme (SZYM, $11.42, down $0.07)
December 12.50 calls (SZYM121222C00012500, $0.65, flat)
Entry Price: $0.70 (9/5/12)
Exit Target: $1.40
Return: -7%
Stop Target: 50 cents
Action: The current range is due for a breakout (or breakdown) soon. Support has been solid at $11 with backup at $10. A move above the 100-day and 200-day MA’s would be bullish and could lead to a test of $12.50.
Knight Capital Group(KCG, $2.70, up $0.03)
January 2.50 calls (2013) (KCG130119C00002500, $0.40, flat)
Entry Price: $0.70 (8/21/12)
Exit Target: $1.40
Return: -27%
Stop Target: 50 cents
Action: Shares made a sweet surge off the low of $2.34 last week and a pop over $3-$3.50 would be bullish and could lead to short-covering. There is still risk down to $2. Shares were near $2.80 when we entered this trade back in August after tumbling from $10 to $2.50 in late July on the company’s trading fiasco. We think a buyout offer north of $5 could be in the cards by yearend.
Other 2012 Portfolio OPEN positions (4): 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 2012 Portfolio link in the Members Area to view ALL open/ closed trades.
Apollo GroupOctober 24 puts (from August 2012)
Pepsico October 75 calls (from August 2012)
Bank of America January 12.50 calls (2013) (from March 2012)
eBay October 52.50 calls (from September 2012)
WATCH LIST SECTION
These trades are NOT recommendations. They are trades that we like but have not added to the portfolio as an official recommendation because of market conditions or because we are waiting for better entry prices. We try not to have more than 12-15 open trades at any one time which is why we created a Watch List. We will not list entry prices because these stocks are on the verge of breaking out or they could sell off but these are the trades we are watching as new candidates.
We will update this section in the morning.