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 2014: 19-8 – the Weekly Wrap is 9-2 for 2014 (94-9, or 91% win rate, since 2011) and is designed for traders that want to use options with less risk.
1:15pm (EST)
Discovery Laboratories (DSCO, $2.57, down $0.02)
April 2 calls (DSCO140419C00002000, $0.70, flat)
Entry Price: $0.65 (2/24/2014)
Exit Target: $1.00-$1.30
Return: 8%
Stop Target: None
Action: Shares recently made a break out of a symmetrical triangle and appear to be headed to $3. This would get the options to a least $1.00-$1.10. Support is at $2.40.
World Wrestling Federation (WWE, $24.16, up $0.17)
March 30 calls (WWE140322C00030000, $0.25, flat)
Entry Price: $0.40 (2/18/2014)
Exit Target: $0.80
Return: -38%
Stop Target: None
Action: Shares traded to a high of $24.95 before closing a penny below $24. We are expecting a pop past $25 with a run to $30 if the company’s subscription model gets off to a good start this week. Support is at $22.
Ingersoll-Rand (IR, $60.00, up $0.03)
March 60 calls (IR140322C00060000, $1.30, up $0.10)
Entry Price: $0.85 (2/13/2014)
Exit Target: $1.70 (2/24/14 closed half @ $1.70)
Return: 65%
Stop Target: $1.10 (Hard Stop)
Action: Our Hard Stop has been triggered after the options opened at $1.15 and traded to a low of $1.05. We still like this trade and we can now focus on the April options to get back into the trade. Look for an update on our Watch List on how to play IR going forward.
Kodiak Oil & Gas (KOG, $12.11, down $0.07)
March 12 calls (KOG140322C00012000, $0.65, flat)
Entry Price: $0.60 (2/13/2014)
Exit Target: $1.20
Return: 8%
Stop Target: None
June 13 calls (KOG140621C00013000, $0.75, flat)
Entry Price: $0.70 (2/13/2014)
Exit Target: $1.40
Return: 7%
Stop Target: None
Action: Earnings are due out on Thursday. We have a near-term target of $12.75 if shares can clear $12.50. Support is at $11.50 if $12 fails to hold.
H&R Block (HRB, $31.83, up $0.28)
March 32 calls (HRB140322C00032000, $1.05, up $0.20)
Entry Price: $0.60 (2/11/2014)
Exit Target: $1.20 (2/21/14 closed a third @ $0.85)
Return: 47%
Stop Target: 60 cents (Hard Stop)
Action: We are still hopeful shares can make a run to $35 as a close above $32 represents blue-sky territory. We could get stopped out of the other half of the trade if shares fall below $30.50.
Ariad Pharmaceuticals (ARIA, $8.77, up $0.14)
March 10 calls (ARIA140322C00010000, $0.35, down $0.10)
Entry Price: $0.95 (1/28/2014)
Exit Target: $1.90
Return: -63%
Stop Target: None
May 11 calls (ARIA140517C00011000, $0.80, flat)
Entry Price: $1.05 (1/28/2014)
Exit Target: $2.10
Return: -24%
Stop Target: None
Action: We are expecting a pop to $10 over the next few weeks. Support is at $7 with $6 serving backup. Earnings could come out this week as we are getting conflicting reports but we will keep you updated once we get a hard date.
The water cooler talk is that Eli Lilly has made a “friendly approach” to buy the company and is willing to pay up to $20 a share. GlaxoSmithKline is also in the hunt along with Shire.
We have said there is a HUGE gap to fill on the stock’s drop from $23 to a 52-week low of $2. Eli is trying to get the company for cheap as it currently has a $1.25 billion market-cap.
Exact Sciences (EXAS, $14.04, up $0.08)
April 19 calls (EXAS140419C00019000, $0.60, flat)
Entry Price: $0.88 (1/22/2014)
Exit Target: $1.75
Return: -32%
Stop Target: None
Action: The company should get some FDA news in March on its Cologuard drug. These are April options with 3 months until expiration and we plan to hold through the volatility because we want to be in when the March news is released. We do not have a Stop Limit listed. Support is at $11.75.
Other 2014 Portfolio OPEN positions (5): 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.
Sony April 20 calls (from January 2014) – continue to HOLD
General Electric March 28 calls (from January 2014) – continue to HOLD
Caterpillar March 85 puts (from January 2014) – continue to HOLD
McDonald’s March 90 puts (from February 2014) – continue to HOLD
Apollo Education Group March 29 puts (from February 2014) – 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.