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 trades or “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: 14-3, for an 82% win rate, including the Weekly Wrap that is 2-0).
12:50pm (EST)
Apache(APA, $83.89, down $0.76)
March 90 calls (APA130316C00090000, $0.65, down $0.10)
Entry Price: $0.85 (2/6/13)
Exit Target: $1.30-$1.70
Return: -24%
Stop Target: None
Action: We believe the company will match estimates and provide a slight beat on revenues when they report earnings on Thursday. We are expecting shares to make a run to $90+ or a trip to $79 could be in the mix depending on the numbers and what they say.
ADT Corp. (ADT, $47.73, up $0.06)
March 50 calls (ADT130316C00050000, $0.50, flat)
Entry Price: $0.65 (1/28/13)
Exit Target: $1.30
Return: -23%
Stop Target: None
Action: We have a near-term price target of $55 if shares can close above $49-$50 this week. A close below $47 would be bearish and likely force us out the options.
Wells Fargo (WFC, $35.32, up $0.44)
February 35 calls (WFC130216C00035000, $0.45, up $0.25)
Entry Price: $0.73 (1/7/13)
Exit Target: $1.50
Return: -38%
Stop Target: None
Action: We would like to see a close above $35.25 today. Resistance is at $36 and where we will make a profit. Our breakeven point is $35.73 for these options by this Friday. Support is at $34.
Taiwan Semiconductor (TSM, $18.50, up $0.05)
April 20 calls (TSM130420C00020000, $0.25, up $0.05)
Entry Price: $0.25 (1/3/13)
Exit Target: $0.75
Return: 0%
Stop Target: None
Action: Shares are at fresh 52-week peaks. We have a near-term target of $20-$22 by mid-April for the stock. The “ask” is back up to 25 cents.
MGM Resorts International (MGM, $13.26, down $0.25)
June 15 calls (MGM130622C00015000, $0.45, down $0.10)
Entry Price: $0.40 (1/2/13)
Exit Target: $0.80
Return: 13%
Stop Target: None
Action: We believe shares could trade to $14-$15 over the near-term and we have a $20 Price Target for MGM in 2013. Short-term support was at $12.50 and we would like to see $13.25 hold on a pullback. Earnings are due out on February 20.
TiVo (TIVO, $13.02, down $0.19)
May 15 calls (TIVO130518C00015000, $0.70, down $0.05)
Entry Price: $0.50 (1/2/13)
Exit Target: $1.00
Return: 40%
Stop Target: None
Action: We would like to see a close above $13.50 this week. Support is moving up but shares are getting a little more volatile which could mean a big move is coming. We have a target of $18 for TiVo but we are watching support at $12.75 and the bottom uptrend line like a hawk.
Other 2013 Portfolio OPEN positions (3): 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.
Fossil February 70 puts (from December 2012) – Earnings are due out on Tuesday and we were encouraged by last week’s dip below $100. Hopefully, this was the signal for a big miss and lowered guidance. If shares stay above $100 on continue stair stepping, these calls will expire worthless. If we get it right, shares could test $70 on terrible numbers and an elevator drop like last year.
Vivus March 17 calls (from January 2013) – continue to hold.
Sony February 16 calls (from February 2013) – Our breakeven point is $16.40 and we will need shares there by Friday’s close.
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 with some more ideas.