9:00am (EST)
NEW TRADE!!!
Dendreon (DNDN, $32.89, up $2.59)
Buy to OPEN August 40 calls (DNDN100821C00040000, $0.94, up $0.46)
Action: Set limit prices up to $1.10 at the open. If you cannot get filled, go up to $1.20-$1.25 but do not pay more than $1.25. If the calls OPEN above $1.25, VOID the trade.
Shares hit a low of $25.78 last Wednesday and surged over 25% from there. We mentioned the stock could dip to $25 prior to the downslide but we did not anticipate the bounce higher so quickly. At $25, shares are a steal and potential takeover material.
At current levels, a 50% premium would represent a share price just south of $50 but Dendreon is worth $75 or more on any hostile bids.
Dendreon is up slightly in pre-market action to $34.45 so be careful with the fills.
Current 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. We will send out an “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 but it is rare that we do.
PowerShares QQQ (QQQQ, $44.61, up $0.41)
August 41 puts (QQQQ100821P00041000, $0.50, down $0.10)
Entry Price: $1.10 (6/29/10)
Exit Target: $2.20
Return: -55%
Stop Target: $1.00
Action: These options have 39 before expiration and we expect the downtrend to resume over the next week of two. There might be some carry-over from last week for the bulls but afterwards we expect a retest of the lower range for the Nasdaq. Continue to hold.
Green Mountain Coffee Roasters (GMCR, $27.16, up $0.68)
September 30 calls (GMCR100918C00030000, $1.15, up $0.15)
Entry Price: $1.47 (6/21/10)
Exit Target: $3.00
Return: -22%
Stop Target: 75 cents
Action: These options have 68 days before they expire and we expect shares could test $30 if they can clear $28 over the next few weeks. This could clear the way for a test of the 52-week high of $33.20 but let’s get through resistance, first.
Las Vegas Sands (LVS, $23.32, up $0.36)
July 22 puts (LVS100717P00022000, $0.25, down $0.20)
Entry Price: $1.20 (6/9/10)
Exit Target: $2.40 (closed half at $1.65 on 7/2/10)
Return: -21%
Stop Target: 60 cents
Action: Shares of LVS popped nearly 10% last week but much of that was probably due to short-covering. If shares can stay under $24 then we have a shot at a quick reversal. Continue to hold.
Other 2010 Portfolio OPEN positions (5): These are trades that are still open in the portfolio that have longer expiration dates or are on “hold” but are not worth mentioning until they turn around. We are still keeping track of the trade and we will record the results, accordingly, when we close them or they expire. Click on the 2010 Portfolio link in the Members Area to view ALL open/ closed trades.
Amazon.com, Berkshire Hathaway Class B, F5 Networks, Moody’s, SanDisk
WATCH LIST SECTION
These trades are NOT recommendations until we send out an alert. These 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 will not list entry prices because these stocks are on the verge of breaking out or they could selloff.
CurrencyShares Euro Trust (FXE, $126.00, down $0.50)
August 123 puts (FXE100821P00123000, $1.00, down $0.05)
Action: We are still hoping to see a rally to $127 but shares stalled at $126.60 and $126.20, twice last week.
Toyota Motor (TM, $71.07, down $0.14)
August 65 puts (TM100821P00065000, $0.70, flat)
Action: We are looking to a push towards $72-$73 before thinking of getting in on some put options. We may also have to look at the August 40’s if share can bounce back near resistance.
OpenTable (OPEN, $44.85, up $1.25)
August 35 puts (OPEN100821P00035000, $0.70, down $0.10)
Action: The 52-week high for OPEN is $45.68 and shares traded $45.17 on Friday. Look for the 52-week high to be resistance, but if not, we will drop coverage.
Alcoa (AA, $10.94, up $0.22)
August 10 puts (AA100821P00009000, $0.30, down $0.10)
Action: The company reports after the bell and has a history of negative surprises over the past few years. These puts are almost worth the lottery ticket prices they are going for so let’s see how the day unfold before rushing anything.
CBOE Holdings (CBOE, $28.97, down $0.04)
September 35 calls (CBOE100917C00035000, $0.50, flat)
December 35 calls (CBOE101217C00035000, $1.25, down $0.05)
Action: We reported on CBOE’s big court win last week and if we get a break back above $30 and the bulls are running then we may add one of the two call options we have listed.
Dendreon (DNDN, $32.89, up $2.59)
August 25 puts (DNDN100821P00025000, $0.90, down $0.35)
August 35 calls (DNDN100821C00035000, $2.30, up $1.10)
Action: We said on Friday that Dendreon could push its way back to the upper $30’s this week. The call options OPENED at $1.18 on Friday and the puts opened at $1.20. We are going to take a little risk and go with the August 40’s.
Vivus (VVUS, $11.52, down $0.17)
September 17.50 calls (VVUS101218C00017500, $1.10, down $0.20)
Action: We got news on Friday that the date for the FDA to review the company’s obesity drug, Qnexa, has been moved to Tuesday. These options are super inflated and should really be selling for 50 cents or less, if that. There is also the chance that Vivus doesn’t move as much as we expect or the FDA says something negative. As such, we are going to stay on the sidelines with this one.
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