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: 20-7, for a 74% win rate, including the Weekly Wrap that is 6-1).
12:55pm (EST)
Powershares QQQ (QQQ, $67.11, down $0.03)
April 65 puts (QQQ130420P00065000, $0.90, flat)
Entry Price: $1.00 (2/21/13)
Exit Target: $1.50-$2.00
Return: -10%
Stop Target: None
Action: We are looking for the QQQ’s to close below $67 today and $65 this week. From there, we expect a test support at $63.50 and where we will close half or all of the trade.
Spider S&P 500 (SPY, $151.32, down $0.57)
April 142 puts (SPY130420P00142000, $0.95, up $0.10)
Entry Price: $1.15 (2/21/13)
Exit Target: $1.80-$2.30
Return: -17%
Stop Target: None
Action: There is risk up to $155 as the S&P 500 could trade to 1,550 but we believe a quick test to the 50-day MA or $147 (1,475 on the S&P 500) could happen this week and where we want to close all or half of the trade in case there is a bounce.
Cree (CREE, $44.14, down $0.61)
March 42 puts (CREE130316P00042000, $0.85, up $0.20)
Entry Price: $0.85 (2/21/13)
Exit Target: $1.70
Return: 0%
Stop Target: None
Action: We are looking for a back test to $38 and the 50-day MA. A break below $38 would get $34 in play as there is a huge gap to fill following the breakout in January.
Baidu (BIDU, $89.37, up $0.19)
April 80 puts (BIDU130420P00080000, $1.40, down $0.10)
Entry Price: $1.20 (2/20/13)
Exit Target: $2.40 (closed half @ $1.80 on 2/22/13)
Return: 25%
Stop Target: $1.20
Action: Continue to hold the other half of the trade.
Keryx Biopharmaceuticals (KERX, $6.72, up $0.02)
June 10 calls (KERX130622C00010000, $0.40, flat)
Entry Price: $0.70 (2/12/13)
Exit Target: $1.50
Return: -43%
Stop Target: None
Action: Support is trying to hold at $6.50 but the dip to $6.37 last week was slightly bearish. We are expecting a move up to $8 over the near-term but there is risk down to $4.50. Earnings are due out on Wednesday and will be the next catalyst that takes shares higher or lower.
Taiwan Semiconductor (TSM, $18.66, down $0.24)
April 20 calls (TSM130420C00020000, $0.25, down $0.05)
Entry Price: $0.25 (1/3/13)
Exit Target: $0.75
Return: 0%
Stop Target: None
Action: Shares traded to another 52-week high of $19.25 last week and we are expecting a run past $20 by mid-April. The lows came in at $18.62 on Tuesday and $18.63 on Thursday. If the stock closes below $18.25 we will likely exit the trade for a scratch.
MGM Resorts International (MGM, $12.40, down $0.02)
June 15 calls (MGM130622C00015000, $0.25, flat)
Entry Price: $0.40 (1/2/13)
Exit Target: $0.80
Return: -38%
Stop Target: None
Action: We said if earnings disappointed shares could test $12 and last week’s low was $12.01 after the results. There is risk down to $11.50-$11 on further weakness and we will need shares to clear $13 before we can say they have momentum. We are using MGM as an online poker play and we have a $20 price target for the stock over the next 6-12 months.
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 2013 Portfolio link in the Members Area to view ALL open/ closed trades.
Vivus March 17 calls (from January 2013) – Continue to hold
Apache March 90 calls (from February 2013)– Continue to hold
ADT March 50 calls (from January 2013)– 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.