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 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.
1:30pm (EST)
Alpha Natural Resources (ANR, $48.59, down $1.80)
June 44 puts (ANR110618P00044000, $0.80, up $0.20)
Entry Price: $0.80 (5/13/11)
Exit Target: $1.60
Return: 0%
Stop Target: None
Action: Shares broke below $50 yesterday and traded to a low of $49.20. The chart is pretty bearish for Alpha Natural which we will update on Monday as shares could fall to a low of $44-$43 over the near-term.
MGM Resorts International (MGM, $14.74, up $0.33)
September 17 calls (MGM110917C00017000, $0.70, up $0.12)
Entry Price: $0.70 (5/13/11)
Exit Target: $1.40
Return: 0%
Stop Target: None
Action: We think MGM is setting up to make a run at $20.
KLA-Tencor (KLAC, $44.49, down $0.40)
June 48 calls (KLAC110618C00048000, $0.80, down $0.10)
Entry Price: $0.90 (5/12/11)
Exit Target: $1.80
Return: -11%
Stop Target: None
Action: We like KLA-Tencor and think shares can run to $50 if the Nasdaq can hold the 2,850 level going forward. We were looking for a close above $46 today which probably isn’t going to happen unless the bulls rally over the next few hours. We will provide a chart on Monday.
Research In Motion (RIMM, $43.39, down $0.40)
June 40 puts (RIMM110618P00040000, $1.15, up $0.10)
Entry Price: $1.00 (5/10/11)
Exit Target: $2.00
Return: 15%
Stop Target: 50 cents
Action: Shares of RIMM have traded to a low of $43.63 yesterday and the 52-week low is $42.53. Our near-term target for RIMM is $38 over the next 5 weeks which gets these options to at least $2. It gets really interesting from there as shares could fall to the lower $30’s which would make this trade a triple-digit winner multiple times over.
Seattle Genetics (SGEN, $17.95, up $0.24)
September 20 calls (SGEN110917C00020000, $1.55, up $0.10)
Entry Price: $1.50 (5/9/11)
Exit Target: $3.00
Return: 3%
Stop Target: None
Action: Shares are at their highs for the day and we would love to see a close above $18.
We believe the Healthcare stocks could provide some defense if the market stalls. The 2011 American Society Clinical Oncology (ASCO) Conference is next week and it is usually a positive catalyst for the sector. The conference features the leading cancer gurus from around the world and Biotech stocks could get a bump on any good news from the presentations. Continue to hold.
Kraft Foods (KFT, $34.75, flat)
September 35 calls (KFT110917C00035000, $1.05, flat)
Entry Price: $0.70 (5/9/11)
Exit Target: $1.40
Return: 50%
Stop Target: 75 cents
Action: Shares of Kraft hit another 52-week high of $34.91 and we are looking for a close above $35 today. The stock has traded up to $35.10.
Our price target is $40 for Kraft and a break above $35, which is the next wave of resistance, clears the way for a test of all-time highs and our price target. We have set a stop of 75 cents to protect profits and we will raise it along the way if shares continue higher.
Starbucks (SBUX, $36.20, down $0.25)
June 38 calls (SBUX110618C00038000, $0.45, down $0.05)
Entry Price: $0.60 (5/9/11)
Exit Target: $1.20
Return: -25%
Stop Target: None
Action: We think shares of Starbucks could make a run at $40 but first it will need to clear its 52-week high of $38.21.
Dendreon (DNDN, $38.20, up $0.40)
August 50 calls (DNDN110820C00050000, $0.65, up $0.05)
Entry Price: $1.85 (4/14/11)
Exit Target: $3.70
Return: -65%
Stop Target: 90 cents
Action: We are looking for Dendreon to stay in a trading range of $38-$42 before the next big pop higher.
Rovi (ROVI, $58.46, down ($0.69)
May 65 calls (ROVI110521C00065000, $0.15, down $0.05)
Entry Price: $0.60 (3/28/11)
Exit Target: $1.20, lower to $0.60+
Return: -75%
Stop Target: 90 cents
Action: We were hoping today would be the day we tell you to take profits back when we started this position back in March. Shares were at $55 when we initiated coverage and these options were a “cheap” out-of-the-money play in a high beta stock. Shares surged nearly 20% on Wednesday but had trouble clearing $60 yesterday. This will likely be the battle ground going into next week. We are still hopeful we can squeeze a profit out of this trade but it is coming down to the wire. These options expire next Friday.
Other 2011 Portfolio OPEN positions (8): 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 2011 Portfolio link in the Members Area to view ALL open/ closed trades.
Vivus June 14 calls (from January 2011)
eBay July 40 calls (from February 2011)
RF MicroDevices August 10 calls (from February 2011)
Skyworks Solutions May 40 calls (from February 2011)
JPMorgan May 48 calls (from March 2011)
S&P 500 Spiders May 128 puts (from April 2011)
McDonald’s May 75 puts (from April 2011)
Cree May 35 puts (from April 2011)
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 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 and as there have been quite a few off this week’s list which have done really well.
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12:25pm (EST)
2 NEW TRADES!!!
Alpha Natural Resources (ANR, $48.44, down $1.95)
Buy to OPEN June 44 puts (ANR110618P00044000, $0.80, up $0.20)
Action: Shares broke below $50 yesterday and traded to a low of $49.20. The chart is pretty bearish for Alpha Natural and the stock could fall to a low of $44-$43 over the near-term. Use limit orders up to 90 cents to establish positions but do not pay more than 95 cents.
MGM Resorts International (MGM, $14.74, up $0.33)
Buy to OPEN September 17 calls (MGM110917C00017000, $0.70, up $0.12)
Action: We thought MGM would trade down to $14 today which is strong support but we may not get that chance before a run to $20 comes. We liked the June options but we want to give this trade more time to run which is why we went with the September options. Use limit prices of 70-75 cents to establish positions.
We will be back in an hour or so with our afternoon update.
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9:00am (EST)
KLA-Tencor (KLAC, $44.89, up $0.84)
June 48 calls (KLAC110618C00048000, $0.90, up $0.20)
Entry Price: $0.90 (5/12/11)
Exit Target: $1.80
Return: 0%
Stop Target: None
Action: We like KLA-Tencor and think shares can run to $50 if the Nasdaq can hold the 2,850 level going forward. Shares reached a high of $45.13 yesterday and we are looking for a close above $46 today. We will provide a chart on Monday.
Research In Motion (RIMM, $43.79, down $0.39)
June 40 puts (RIMM110618P00040000, $1.05, up $0.05)
Entry Price: $1.00 (5/10/11)
Exit Target: $2.00
Return: 5%
Stop Target: 50 cents
Action: Shares of RIMM have traded to a low of $43.63 yesterday and the 52-week low is $42.53. Our near-term target for RIMM is $38 over the next 5 weeks which gets these options to at least $2. It gets really interesting from there as shares could fall to the lower $30’s which would make this trade a triple-digit winner multiple times over.
Seattle Genetics (SGEN, $17.71, up $0.27)
September 20 calls (SGEN110917C00020000, $1.45, down $0.05)
Entry Price: $1.50 (5/9/11)
Exit Target: $3.00
Return: -3%
Stop Target: None
Action: We believe the Healthcare stocks could provide some defense if the market stalls. The 2011 American Society Clinical Oncology (ASCO) Conference is next week and it is usually a positive catalyst for the sector. The conference features the leading cancer gurus from around the world and Biotech stocks could get a bump on any good news from the presentations. Continue to hold.
Kraft Foods (KFT, $34.75, up $0.48)
September 35 calls (KFT110917C00035000, $1.05, up $0.25)
Entry Price: $0.70 (5/9/11)
Exit Target: $1.40
Return: 50%
Stop Target: 75 cents
Action: Shares of Kraft hit another 52-week high of $34.91 and we are looking for a close above $35 today. Our price target is $40 for Kraft and a break above $35, which is the next wave of resistance, clears the way for a test of all-time highs and our price target. We have set a stop of 75 cents to protect profits and we will raise it along the way if shares continue higher.
Starbucks (SBUX, $36.45, up $0.66)
June 38 calls (SBUX110618C00038000, $0.50, up $0.10)
Entry Price: $0.60 (5/9/11)
Exit Target: $1.20
Return: -17%
Stop Target: None
Action: We think shares of Starbucks could make a run at $40 but first it will need to clear its 52-week high of $38.21.
Dendreon (DNDN, $37.80, down $0.38)
August 50 calls (DNDN110820C00050000, $0.60, down $0.05)
Entry Price: $1.85 (4/14/11)
Exit Target: $3.70
Return: -68%
Stop Target: 90 cents
Action: We are looking for Dendreon to stay in a trading range of $38-$42 before the next big pop higher.
Rovi (ROVI, $59.15, up $0.67)
May 65 calls (ROVI110521C00065000, $0.20, down $0.05)
Entry Price: $0.60 (3/28/11)
Exit Target: $1.20, lower to $0.60+
Return: -67%
Stop Target: 90 cents
Action: We were hoping today would be the day we tell you to take profits back when we started this position. Shares we at $55 when we initiated coverage and these options were a “cheap” out-of-the-money play in a high beta stock. Shares surged nearly 20% on Wednesday but had trouble clearing $60 yesterday. This will likely be the battle ground going into next week. We are still hopeful we can squeeze a profit out of this trade but it is coming down to the wire. These options expire next Friday.
Other 2011 Portfolio OPEN positions (8): 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 2011 Portfolio link in the Members Area to view ALL open/ closed trades.
Vivus June 14 calls (from January 2011)
eBay July 40 calls (from February 2011)
RF MicroDevices August 10 calls (from February 2011)
Skyworks Solutions May 40 calls (from February 2011)
JPMorgan May 48 calls (from March 2011)
S&P 500 Spiders May 128 puts (from April 2011)
McDonald’s May 75 puts (from April 2011)
Cree May 35 puts (from April 2011)
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 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.
MGM Resorts International (MGM, $14.41, down $0.30)
June 15 calls (MGM110618C00015000, $0.50, down $0.10)
Thoughts: We would like to see MGM fall back to $14 which is strong support and where we might pull the trigger on this trade. We will provide a chart on Monday.
Vertex Pharmaceuticals (VRTX, $58.01, up $1.76)
June 65 calls (VRTX110618C00065000, $1.50, up $0.70)
Thoughts: Shares hit a 52-week high of $58.87 yesterday and these options nearly doubled. Shares could easily explode up to $70.
Alpha Natural Resources (ANR, $50.39, down $0.25)
June 45 puts (ANR110618P00045000, $0.70, flat)
Thoughts: Shares broke below $50 yesterday and traded to a low of $49.20. The chart is pretty bearish for Alpha Natural and we will revisit this story on Monday.
TempurPedic International (TPX, $64.05, up $1.11)
June 65 calls (TPX110619C00065000, $2.30, up $0.30)
September 75 calls (TPX110917C00075000, $2.00, up $0.25)
Thoughts: Shares reached a fresh 52-week high of $64.20 yesterday.
Illumina (ILMN, $75.23, up $0.49)
June 80 calls (ILMN110618C00080000, $1.05, up $0.10)
September 85 calls (ILMN110917C00085000, $2.40, up $0.20)
Thoughts: We have been saying a run to $80 appears to be in the cards and we would easily add these options if it weren’t for the fact we already have two Biotech trades open.
Peet’s Coffee & Tea (PEET, $48.80, up $1.40)
June 50 calls (PEET110618C00050000, $2.15, up $0.70)
Thoughts: Shares of Peet’s also hit a new 52-week high of $49.58 and could be headed way higher with no overhead resistance. He is what we have been saying all week:
“We have been watching Peet’s for a few months now because we continue to hear takeover chatter. There is huge open interest in these options and we have a feeling that the rumors we are hearing could come to fruition. A break above $48 puts the stock in blue-sky territory.”
E-Commerce China Dangdang (DANG, $21.68, up $0.43)
June 25 calls (DANG110618C00025000, $0.80, up $0.10)
Thoughts: We have been waiting for a pullback to $20 and yesterday’s low was $20.62. These options traded opened at 71 cents but only traded own to 70 cents. We were hoping they would fall to 50 cents which is why we went with the KLAC traded yesterday. We also don’t trust many Chinese stocks but they are tradable.
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