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 2012 (148-54, or 73% win rate, including the Weekly Wrap which is 26-0).
12:10pm (EST)
NEW TRADE!!!
Dunkin’ Brands Group (DNKN, $31.06, down $0.59)
Buy to OPEN January 32.50 calls (DNKN130119C00032500, $0.45, down $0.20)
Action: Use limit orders up to 50-55 cents but do not pay over 65-70 cents to establish positions. We have a mid-January price target of $35 for Dunkin and this would get the options to at least $2.50.
CURRENT TRADES
Taser International (TASR, $8.19, up $0.07)
January 10 calls (TASR130119C00010000, $0.20, flat)
Entry Price: $0.15 (11/29/12)
Exit Target: $0.45
Return: 33%
Stop Target: None
March 10 calls (TASR130316C00010000, $0.40, flat)
Entry Price: $0.30 (11/29/12)
Exit Target: $0.50
Return: 33%
Stop Target: None
Action: A close over $8.50 would be bullish and today’s high has been $8.32. The January option chains have 45 days before expiration so we have plenty of time for this trade to play out. We have a near-term target of $10-$11 once shares clear resistance.
Vivus (VVUS, $11.16, down $0.21)
January 15 calls (VVUS130119C00015000, $0.40, down $0.10)
Entry Price: $0.65 (11/21/12)
Exit Target: $1.30
Return: -38%
Stop Target: None
Action: Support is $11 with $10 serving backup. The 50-day MA is at $16.41 and where we believe shares are headed over the next 6 weeks.
Rosetta Stone (RST, $12.71, up $0.08)
January 15 calls (RST130119C00015000, $0.20, flat)
Entry Price: $0.20 (11/19/12)
Exit Target: $1.00
Return: 0%
Stop Target: None
Action: Shares have reached $12.82 and we would love to see a close above $13 this week. Support is at $12.30, or the 50-day and 100-day MA’s. Short-term resistance is at $13.25 and then $13.50. A break back above these levels should lead to a run past the 52-week high of $14.69.
HealthCare REIT (HCN, $59.15, down $0.13)
December 60 calls (HCN121222C00060000, $0.55, flat)
Entry Price: $1.00 (11/19/12)
Exit Target: $2.00
Return: -45%
Stop Target: None
Action: We would like to see a close back above $60 this week. A move below $58.50 will likely force us out of the trade.
Knight Capital Group (KCG, $3.36, up $0.03)
January 2.50 calls (KCG130119C00002500, $0.85, down $0.05)
Entry Price: $0.55 (8/21/12)
Exit Target: $1.10
Return: 55%
Stop Target: None
Action: There is water-cooler talk of another bid coming. The current buyout offer is $3.50 but we expect a final price north of $4 by mid-January. This would make these options worth at least $1.50 minimum which sets us up for a sweet triple-digit return.
Other 2012 Portfolio OPEN positions (5): 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.
Bank of America January 12.50 calls (2013) (from March 2012) – continue to hold
Solazyme December 12.50 calls (from September 2012)– continue to hold
Lufkin Industries December 45 puts (from November 2012) – half position open
LifeLock December 10 calls (from November 2012)– continue to hold
Monster Beverage January 35 puts (from November 2012)– continue to hold
Apollo Group December 18 puts (from October 2012)– 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.