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 but it is rare that we do.
1:15pm (EST)
Petroleo Brasileiro (PBR, $31.12, down $0.09)
February 32 calls (PBR120218C00032000, $0.55, down $0.05)
Entry Price: $0.55 (1/27/12)
Exit Target: $1.10
Return: 0%
Stop Target: None
Action: We are looking for a pop back above $32 next week as shares could be headed to $35 if cleared.
Nucor (NUE, $44.29, up $0.16)
March 46 calls (NUE120317C00046000, $0.80, up $0.05)
Entry Price: $0.70 (1/27/12)
Exit Target: $1.40
Return: 14%
Stop Target: None
Action: We are looking for shares to a run to $46-$48 over the next few weeks if the bulls can push the market past the 52-week highs.
MGM Resorts (MGM, $13.04, down $0.01)
June 15 calls (MGM120616C00015000, $0.75, flat)
Entry Price: $0.80 (1/26/12)
Exit Target: $1.60
Return: -6%
Stop Target: None
Action: These options have 140 days before they expire so we aren’t too worried what the market does because we think the Casino sector stocks are going to do well this year. Our 2012 price target for MGM is $20. They will be a big player in online gambling, especially poker.
Dendreon (DNDN, $14.60, up $0.34)
May 22 calls (DNDN120519C00022000, $0.80, up $0.05)
Entry Price: $0.92 (1/26/12)
Exit Target: $1.85
Return: -13%
Stop Target: None
Action: We will show you the chart work on Monday and we are hoping shares can fill the gap up to $20. We also like Dendreon as a takeover target and believe shares could fetch $25-$30 on a buyout offer.
Scientific Games (SGMS, $11.72, up $0.30)
February 12.50 calls (SGMS120218C00012500, $0.25, up $0.05)
Entry Price: $0.20 (1/18/12)
Exit Target: $0.40
Return: 25%
Stop Target: None
July 15 calls (SGMS120721C00015000, $0.50, up $0.05)
Entry Price: $0.35 (1/18/12)
Exit Target: $0.70 (closed half at $0.45 on 1/25/2012)
Return: 36%
Stop Target: None
Action: The 52-week high of $12.06 was hit a week ago and we would like to see $11 hold today if there is a pullback. Yesterday’s low was $11.24.
Carrizo Oil & Gas (CRZO, $25.37, up $0.43)
April 30 calls (CRZO120421C00030000, $1.05, up $0.10)
Entry Price: $1.20 (1/17/12)
Exit Target: $2.40
Return: -13%
Stop Target: None
Action: These options have 84 days before they expire and we are looking for a run past $30.
Vivus (VVUS, $12.01, up $0.11)
February 14 calls (VVUS120218C00014000, $0.40, up $0.05)
Entry Price: $0.70 (1/12/12)
Exit Target: $1.40
Return: -43%
Stop Target: None
Action: Vivus expects to hear word from an advisory panel on Qnexa in mid-February which could give us clues on if the FDA’s will approve the obesity drug or not. A decision is expected by mid-April but we are hoping to hear good news before then.
Solazyme (SZYM, $11.65, up $0.03)
March 15 calls (SZYM120317C00015000, $0.30, flat)
Entry Price: $0.45 (1/10/12)
Exit Target: $1.00
Return: -33%
Stop Target: None
Action: The March options have 49 days before they expire. Continue to hold.
OCZ Technology Group (OCZ, $8.65, down $0.08)
February 9 calls (OCZ120218C00009000, $0.35, flat)
Entry Price: $0.60 (1/9/12)
Exit Target: $1.20
Return: -42%
Stop Target: None
Action: Shares are at August 2011 highs following yesterday’s pop. If OCZ can reach $9 we should be back to even, at $10 the trade will be a double which could happen quickly after 3 weeks of waiting. If the shorts start to cover, which is looking like a possibility, shares could rocket past $11. If so, these call options will be worth at least $2. The $8.50 level needs to hold on a pullback.
Newpark Resources (NR, $8.75, down $0.051)
March 10 calls (NR120317C00010000, $0.40, flat)
Entry Price: $0.95 (1/3/12)
Exit Target: $1.90 (closed half at $1.20 on 1/10/2012)
Return: -16%
Stop Target: 50 cents
Action: This stock has been frustrating to trade but the action and recent volatility is telling us something. Either a breakout or breakdown is coming.
Chesapeake Energy (CHK, $21.88, down $1.48)
April 25 calls (CHK120421C00025000, $0.70, flat)
Entry Price: $1.25 (12/21/11)
Exit Target: $2.50
Return: -36%
Stop Target: 60 cents
Action: Continue to hold.
Other 2012 Portfolio OPEN positions (1): 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. 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 the options expire. Click on the 2012 Portfolio link in the Members Area to view ALL open/ closed trades.
Coach February 55 puts (from January 2012) 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.
We will update this section on Monday with some fesh ideas.
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11:35am (EST)
NEW TRADES!!!
Petroleo Brasileiro (PBR, $31.19, down $0.02)
Buy to OPEN February 32 calls (PBR120218C00032000, $0.55, down $0.05)
Action: Use limit orders up to 60-65 cents to establish positions but do not pay over 70 cents.
Nucor (NUE, $44.05, down $0.08)
Buy to OPEN March 46 calls (NUE120317C00046000, $0.70, down $0.05)
Action: Use limit orders up to 75-80 cents to establish positions.
Current Trades
Microsoft (MSFT, $29.28, down $0.22)
July 30 calls (MSFT120721C00030000, $1.20, down $0.15)
Entry Price: $0.75 (1/6/12)
Exit Target: $1.50+ (closed half at $1.35 on 1/24/2012)
Return: 70%
Stop Target: $1.20 (HARD STOP)
Action: Our Hard Stop of $1.20 was hit earlier this morning so we are out of the trade. We will look to get back in if shares break $30.
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9:00am (EST)
MGM Resorts (MGM, $13.05, down $0.06)
June 15 calls (MGM120616C00015000, $0.75, down $0.07)
Entry Price: $0.80 (1/26/12)
Exit Target: $1.60
Return: -6%
Stop Target: None
Action: Shares of MGM opened at $13.20 and made a quick run to $13.49 before pulling back. These options have 140 days before they expire so we aren’t too worried what the market does because we think the Casino sector stocks are going to do well this year. Our 2012 price target for MGM is $20. They will be a big player in online gambling, especially poker.
Dendreon (DNDN, $14.26, down $0.46)
May 22 calls (DNDN120519C00022000, $0.75, down $0.13)
Entry Price: $0.92 (1/26/12)
Exit Target: $1.85
Return: -18%
Stop Target: None
Action: We will show you the chart work on Monday and we are hoping shares can fill the gap up to $20. We also like Dendreon as a takeover target and believe shares could fetch $25-$30 on a buyout offer.
Scientific Games (SGMS, $11.42, flat)
February 12.50 calls (SGMS120218C00012500, $0.20, flat)
Entry Price: $0.20 (1/18/12)
Exit Target: $0.40
Return: 0%
Stop Target: None
July 15 calls (SGMS120721C00015000, $0.45, flat)
Entry Price: $0.35 (1/18/12)
Exit Target: $0.70 (closed half at $0.45 on 1/25/2012)
Return: 29%
Stop Target: None
Action: The 52-week high of $12.06 was hit a week ago and we would like to see $11 hold today if there is a pullback. Yesterday’s low was $11.24.
Carrizo Oil & Gas (CRZO, $24.94, down $1.18)
April 30 calls (CRZO120421C00030000, $0.95, down $0.30)
Entry Price: $1.20 (1/17/12)
Exit Target: $2.40
Return: -21%
Stop Target: None
Action: Shares lost nearly 5% yesterday after testing resistance at $26 on Wednesday. We would like to see a close above this level and above $24 if shares show weakness today.
Vivus (VVUS, $11.98, down $0.24)
February 14 calls (VVUS120218C00014000, $0.35, down $0.05)
Entry Price: $0.70 (1/12/12)
Exit Target: $1.40
Return: -50%
Stop Target: None
Action: Vivus expects to hear word from an advisory panel on Qnexa in mid-February which could give us clues on if the FDA’s will approve the obesity drug or not. A decision is expected by mid-April but we are hoping to hear good news before then.
Solazyme (SZYM, $11.62, down $0.05)
March 15 calls (SZYM120317C00015000, $0.30, flat)
Entry Price: $0.45 (1/10/12)
Exit Target: $1.00
Return: -33%
Stop Target: None
Action: Shares made a brief trip into positive territory on Thursday, trading up to $11.80, before finishing slightly lower. We would like to see a close above $11.90 today which was hit twice this week.
OCZ Technology Group (OCZ, $8.73, up $0.33)
February 9 calls (OCZ120218C00009000, $0.35, up $0.05)
Entry Price: $0.60 (1/9/12)
Exit Target: $1.20
Return: -42%
Stop Target: None
Action: Shares are at August 2011 highs following yesterday’s pop. If OCZ can reach $9 we should be back to even, at $10 the trade will be a double which could happen quickly after 3 weeks of waiting. If the shorts start to cover, which is looking like a possibility, shares could rocket past $11. If so, these call options will be worth at least $2. The $8.50 level needs to hold on a pullback.
Microsoft (MSFT, $29.50, down $0.06)
July 30 calls (MSFT120721C00030000, $1.35, flat)
Entry Price: $0.75 (1/6/12)
Exit Target: $1.50+ (closed half at $1.35 on 1/24/2012)
Return: 80%
Stop Target: $1.20 (HARD STOP)
Action: Shares are having trouble cracking $30 but they could next week if they hold up today. However, if our Hard Stop of $1.20 is hit, we are gone, but may look to get back in once $30 is cleared.
Newpark Resources (NR, $8.80, down $0.91)
March 10 calls (NR120317C00010000, $0.40, down $0.30)
Entry Price: $0.95 (1/3/12)
Exit Target: $1.90 (closed half at $1.20 on 1/10/2012)
Return: -16%
Stop Target: 50 cents
Action: This stock has been frustrating to trade but the action and recent volatility is telling us something. Either a breakout or breakdown is coming.
Chesapeake Energy (CHK, $21.90, down $1.48)
April 25 calls (CHK120421C00025000, $0.70, down $0.35)
Entry Price: $1.25 (12/21/11)
Exit Target: $2.50
Return: -36%
Stop Target: 60 cents
Action: Shares have been volatile this week and a test to $20 could be coming again. We were hoping for a pop above $24 this week but will now be happy with $22 today.
Other 2012 Portfolio OPEN positions (1): 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. 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 the options expire. Click on the 2012 Portfolio link in the Members Area to view ALL open/ closed trades.
Coach February 55 puts (from January 2012) 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.
Rambus (RMBS, $8.92, down $0.28)
February 10 calls (RMBS120218C00010000, $0.20, down $0.05)
May 10 calls (RMBS120519C00010000, $0.70, down $0.05)
Thoughts: Rambus missed revenue estimates so we are dropping it as a possible play candidate.
Petroleo Brasileiro (PBR, $31.21, down $0.60)
February 32 calls (PBR120218C00032000, $0.60, down $0.30)
April 34 calls (PBR120421C00034000, $0.65, down $0.05)
Thoughts: Both of these options easily doubled this week and we may get another chance to get into them on a pullback to $30.
Abercrombie & Fitch (ANF, $45.88, down $0.96)
February 43 puts (ANF120218P00043000, $1.20, up $0.20)
May 33 puts (ANF120519P00030000, $0.65, up $0.05)
Thoughts: We might enter small positions on ANF and we will probably go with the February 43’s on a break below $45 if we do.
We have covered ANF for years and it appears ready for a breakdown. A drop below $42.50 could spell trouble down to the mid-$30’s so be patient. Earnings are due mid-February.
Nucor (NUE, $44.13, up $0.39)
February 44 calls (NUE120218C00044000, $1.15, up $0.10)
April 45 calls (NUE120421C00045000, $1.70, up $0.20)
Thoughts: We missed getting into the April calls by nickel on Monday morning at $1 as shares have been strong all week. We will keep watching Nucor for a pullback but we may not get one.
Seagate Technology (STX, $19.80, up $0.03)
February 21 calls (STX120218C00021000, $0.55, flat)
March 21 calls (STX120317C00021000, $0.80, flat)
Thoughts: Shares could make a run at $22 if $20 clears again.
Potash (POT, $45.81, up $0.58)
February 47.50 calls (POT120218C00047500, $0.80, up $0.05)
March 50 calls (POT120317C00050000, $0.75, up $0.05)
Thoughts: Potash continues to have trouble at $46. Shares reached $46.47 on good earnings but failed to close above this level which is what we would like to see before thinking of going long. The February 47.5’s reached $1.05 while the March 50’s kissed 93 cents.
Pepsico (PEP, $66.52, down $0.18)
February 67.50 calls (PEP120218C00067500, $0.55, down $0.05)
April 70 calls (PEP120421C00070000, $0.40, flat)
April 67.50 calls (PEP120421C00065000, $1.15, down $0.05)
Thoughts: We are warming up to the April 70’s.
Philip Morris (PM, $76.38, down $0.43)
February 77.55 calls (PM120218C00077500, $0.75, down $0.25)
March 80 calls (PM120317C00080000, $0.55, down $0.05)
Thoughts: Shares could be setting up for another run at $80.
FedEx (FDX, $92.74, up $0.15)
February 95 calls (FDX120218C00095000, $0.95, flat)
Thoughts: The options also doubled this week.
Tempur Pedic International (TPX, $68.89, up $1.08)
February 65 calls (TPX120218C00065000, $5.10, up $0.90)
Thoughts: These options have doubled since we profiled them Tuesday morning and had another good day.
Freeport-McMoran Copper & Gold (FCX, $46.50, up $0.42)
February 45 calls (FCX120218C00045000, $2.55, up $0.30)
Thoughts: These calls opened at 87 cents on Wednesday.