MEMBERS AREA
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 tradesor “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 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 2013: 133-75 – the Weekly Wrap is 41-4 for 2013 (85-6 since 2011) and is designed for traders that want to use options with less risk.
12:20pm (EST)
Herbalife (HLF, $76.33, up $0.57)
January 82.50 calls (weekly)(HLF140103C00082500, $1.20, down $0.20)
Entry Price: $1.70 (12/17/13)
Exit Target: $3.80
Return: -29%
Stop Target: None
Action: We are expecting a run past $80 to $85 and we will stick with the trade as long as $70 holds as support.
Vera Bradley (VRA, $23.03, up $0.30)
January 22.50 puts (VRA140118P00022500, $0.80, down $0.10)
Entry Price: $1.20 (12/10/13)
Exit Target: $2.40
Return: -33%
Stop Target: None
Action: There is risk risk up to $24 and the 20-day MA but we are looking for $23 to hold as resistance. We are expecting a drop to $21-$20.50 by mid-January.
Pulte Group (PHM, $18.29, up $0.27)
January 20 calls (PHM140118C00020000, $0.20, up $0.05)
Entry Price: $0.50 (11/27/13)
Exit Target: $1.00
Return: -60%
Stop Target: None
Action: While there could be a near-term test to $17.50, we still feel as though shares will be north of $20 come mid-January.
Opko Health (OPK, $8.78, up $0.38)
January 11 calls (OPK140118C00011000, $0.30, up $0.10)
Entry Price: $0.65 (11/26/13)
Exit Target: $1.30
Return: -54%
Stop Target: None
Action: Support is at $8.50 but there is further risk to $7.50 on continued weakness. Short-term resistance is at $9.50 and a close above $10 would indicate the short selling is complete.
We have done our own research and we have written about Opko in our Weekly Wrap. We are expecting some good news on the company’s Phase 3 trial results for its cancer drug, Rolipitant, this month.
Galena Biopharma (GALE, $3.92, down $0.08)
January 2.50 calls (GALE140118C00002500, $1.50, flat)
Entry Price: $0.30 (11/11/13)
Exit Target: $0.90 (closed a quarter @ $1 on 11/21/13, closed a quarter @ $1.50 on 12/10/13)
Return: 358%
Stop Target: $1 on remaining half position (Stop Limit)
Action: We would like to see a close above $4.25 this week. Support is at $3.75 on another close below $4. Resistance is at $4.50. We have a stop limit of $1 on the other half of the trade that will likely get triggered if shares fall below $3.50.
Other 2013 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 2013Portfolio link in the Members Area to view ALL open/ closed trades.
Millennial Media December 7.50 calls (from October 2013) – Shares need to clear $7.50 by Friday’s close. The options are asking a nickel and there is no bid.
Peabody Energy December 22 calls (from November 2013)– Shares are testing $18 again and the December calls will likely expire worthless.
Kodiak Oil & Gas December 13 calls (from November 2013) – The ask is 5 cents and there is no bid as these options will likely expire worthless on Friday’s close.
Ariad Pharmaceuticals January 7 calls (from December 2013) – We will bring back coverage if shares can push $5. Continue to hold.
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.