1:00pm (EST) continued…
The IPO (Initial Public Offering) market is rebounding as a number of companies are going public today. There were 5 offerings last week and today’s names include Intercept Pharmaceuticals (ICPT, $18.97, up $3.97), Realogy Holding (RLGY, $34.00, up $0.25), which is a pure play on the Real Estate sector, and Shutterstock (SSTK, $22.00 up $3). One company we like a lot but want to do more homework on is LifeLock (LOCK, $7.62, down $0.10) which made its debut last week.
We have some action to take with one of our current trade as we are locking in HALF profits of nearly 20% on one of our trades. As we head into the second half of trading, the Dow is up 26 points to 13,371 while the S&P 500 is higher by 6 points to 1,438. The Nasdaq is showing a gain of 8 points to 3,059.
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 “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. Closed Trades for 2012 (135-43, or 76% win rate, including Weekly Wrap which is 24-0).
PowerShares QQQ (QQQ, $66.95, up $0.03)
November 66 puts (QQQ121117P00066000, $1.00, down $0.10)
Entry Price: $0.95 (10/9/12)
Exit Target: $1.90
Return: 5%
Stop Target: None
Action: We have a near-term target of $65 and a mid-November target of $63. This would make these puts worth $3 for a 200% return if $63 triggers. Resistance is at $70.
Sina (SINA, $62.19, up $0.36)
November 50 puts (SINA121117P00050000, $0.65, down $0.10)
Entry Price: $1.00 (10/9/12)
Exit Target: $2.00
Return: -35%
Stop Target: None
Action: Resistance is at $62. Our near-term target is for a test to $55. If this level fails to hold, shares could tumble to the mid-$40’s.
Citrix Systems (CTXS, $66.75, down $1.95)
November 60 puts (CTXS121117P00060000, $1.65, up $0.45)
Entry Price: $1.05 (10/8/12)
Exit Target: $2.10
Return: 64%
Stop Target: None
Action: We would like to see a close below $65 this week and today’s drop is looking sweet.
JC Penney (JCP, $26,00, up $1.85)
November 22 puts (JCP121117P00022000, $0.50, down $0.30)
Entry Price: $0.95 (9/28/12)
Exit Target: $1.90
Return: -47%
Stop Target: None
Action: Shares are up 8% and we will do some chart work after the close to see what today’s spike means. Continue to hold.
Buffalo Wild Wings (BWLD, $88.46, up $0.82)
November 70 puts (BWLD121117P00070000, $0.80, down $0.10)
Entry Price: $1.25 (9/26/12)
Exit Target: $2.20
Return: -36%
Stop Target: None
Action: There is risk up to $90 and a move above this level could lead to a run to $95-$100. We would like to see shares close below $85 this week which should get $80 back in play. Earnings are due out on October 23.
TiVo (TIVO, $9.90, up $0.05)
November 10 calls (TIVO121117C00010000, $0.40, flat)
Entry Price: $0.70 (9/25/12)
Exit Target: $1.40
Return: -43%
Stop Target: None
Action: There is now risk down to $9.50-$9.00 on continued weakness and earnings aren’t due out until late November. A break below $9 might force us out the trade but we still believe shares will be pushing $12 by mid-November.
KLA-Tencor (KLAC, $45.20, down $0.35)
October 45 puts (KLAC121020P00045000, $0.65, up $0.10)
Entry Price: $0.55 (9/20/12)
Exit Target: $1.10
Return: 18%
Stop Target: None
Action: Close HALF of the trade at current levels. We will likely close the other half tomorrow but we want to leave half open in case shares do make the break below $45. Today’s low has been $45.03.
Solazyme (SZYM, $10.15, up $0.11)
December 12.50 calls (SZYM121222C00012500, $0.30, flat)
Entry Price: $0.70 (9/5/12)
Exit Target: $1.40
Return: -57%
Stop Target: None
Action: We would like to see a close above $10 today.
Other 2012 Portfolio OPEN positions (7): 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 2012 Portfolio link in the Members Area to view ALL open/ closed trades.
Apollo Group October 24 puts (from August 2012) – Earnings October 16
Pepsico October 75 calls (from August 2012) – Faces resistance at $73
Bank of America January 12.50 calls (2013) (from March 2012) – a move above $10 would be bullish and have us looking to add to the position.
eBay October 52.50 calls (from September 2012) – We may close by Friday if shares are not above $50.
Tiffany & Co. October 60 puts (from September 2012) – We still feel there is a good chance shares retreat and fall below $60.
Knight Capital Group January 2.50 calls (2013) (from August 2012) – takeover target
Akamai Technologies October 40 calls (from September 2012) – teasing us after popping above $40 on Monday
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 AM.