9:00am (EST)
NEW TRADE
Research In Motion (RIMM, $65.80, down $0.13)
Buy to OPEN Feb 60 puts (RFYNL, $1.44, up $0.04)
Action: We have been watching shares of RIMM all week and we almost sent this trade out yesterday. The stock has all the makings of a classic collapse and we think shares at least trade to $62 over the near-term and possibly below $60 in the next few weeks.
Shares have been making lower lows after bumping up to resistance which is currently at $68. We have been waiting for a break below $65 and yesterday the stock briefly touched a low of $64.93.
We also want to add a put play as some insurance in case the market retreats. Set a limit price of $1.55 and if the puts open higher than that try to get them for under $1.75.
The stock is down 15 cents to $65.65 in pre-market trading so you should be able to get these options at our target entry price of $1.55 or a little less. Again, you can go up to $1.75 for the put options.
CURRENT TRADES
Las Vegas Sands (LVS, $18.27, up $1.65)
February 18 calls (LJJBR, $1.64, up $0.87)
Entry Price: $0.95 (1/5/10)
Exit Target: $2.00
Return: 73%
Stop Target: $1.10
Action: The “ask” was 95 cents and we had wrote 91 cents as our entry price yesterday which was the opening price. Folks, many of you got in this trade for around $1.00 and we can see why some of you may not have done the trade.
Yes, our entry price of 85 cents was not filled but if the options opened at 91 cents and a few minutes later they were at $1.00 then you should have gotten filled between 95 cents and $1.00. If you had to pay $1.05 or $1.10 then some of you saw the strength and still entered positions. Bingo.
Please understand we are trying to predict prices on where a stock might open and we do a pretty darn good job of it. These options were in a strong uptrend all day and we mentioned we thought the stock was headed to $20. That would make the options worth $2 minimum if shares do continue to rally which is our initial exit target.
Green Mountain Coffee Roasters (GMCR, $82.78, up $1.48)
February 95 calls (QGMBS, $1.75, up $0.40)
Entry Price: $1.15 (1/4/10)
Exit Target: $2.30
Return: 52%
Stop Target: $1.50 (lower to $1.25)
Action: Green Mountain was perking yesterday as shares roasted to a high of $85 while the call options touched $2.15. The uptrend is still intact so you shouldn’t worry too much about the $1.50 stop. In fact, we lowered it because we want to give it some wiggle room.
We do not want to get whipsawed out of the trade and the chart is showing us blue-sky territory…
Imax (IMAX, $14.06, up $0.75)
January 12.50 calls (IMQAV, $1.60, up $0.65)
Entry Price: $1.05 (12/15/09)
Exit Target: $2.00+
Return: 52%
Stop Target: 60 cents, raise to $1.10
Action: The big news yesterday was Imax teaming up with Sony and Discovery Communications to develop a full-time 3-D network. Shares of Imax rallied to a high of $14.48 and the calls did hit our target of $2.00.
Let’s see how we open this morning and if we decide to close the trade we will send out an alert. Otherwise, continue to hold.
Exxon Mobil (XOM, $69.42, up $0.27)
April 75 calls (XOMDO, $0.88, up $0.09)
Entry Price: $1.45 (12/15/09)
Exit Target: $2.90
Return: -39%
Stop Target: $0.50
Action: Oil continues to surge higher but Exxon is stuck in first. It’s not always safe to assume that just because oil is going up, oil stocks will go up. We entered this trade based on a technical level of support which has held. The problem is that we haven’t gotten the quick bounce back over $70.
We are almost there so continue to hold.
A123 Systems (AONE, $22.39, down $0.41)
January 21 calls (ZKQAU, $1.75, down $0.30)
Entry Price: $0.80 (12/04/09)
Exit Target: $2.50-$3.00 (sold half on 12/30/09 @ $2.00)
Return: 134%
Stop Target: $1.75
Action: IMPORTANT…close the other half of the trade if the calls trade below $1.50 this morning. Do not enter stop orders before the opening bell because we do not want to tip our hand to the market makers. Hopefully, the stock resumes its uptrend this morning but if it doesn’t we will lock in a 120% return with the $1.50 stop.
If shares do open lower then we maybe roll some profits into the February 25 calls (ZDYBE, $0.90, down $0.25) but not right away. Put them on your Watch List and wait for the signal.
TiVo (TIVO, $10.72, up $0.09)
February 12.50 calls (TUKBV, $0.95, up $0.15)
Entry Price: $0.75 (11/30/09)
Exit Target: $1.50
Return: 27%
Stop Target: None, set one at 50 cents
Action: We are hearing rumors that TiVo could announce some kind of news concerning its patent technology which allows viewers to pause and rewind live television. TiVo has spent a ton of money protecting its technology and has lawsuits against AT&T, EchoStar, DishNetwork and Verizon Communications alleging patent infringements.
If it is settlement news then we could easily see shares test their 52-week high of $12.78. We also expect TiVo to update its deal with Best Buy in the coming months. Continue to hold.
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