9:00am (EST)
JC Penney (JCP, $24.58, up $0.29)
November 22 puts (JCP121117P00022000, $0.85, down $0.10)
Entry Price: $0.95 (9/28/12)
Exit Target: $1.90
Return: -11%
Stop Target: None
Action: Shares traded up to $25.45 shortly after the open as the options traded down to 68 cents. We said there is risk up to $26 and that $25 should hold as resistance so we still like the trade at current levels if you haven’t got in.
First Solar (FSLR, $21.93, down $0.22)
October 20 puts (FSLR121020P00020000, $0.90, flat)
Entry Price: $0.85 (9/28/12)
Exit Target: $1.70
Return: 6%
Stop Target: None
Action: We are expecting a test down to $20 and the 50-day MA this week. Resistance is at $24 but the decline should pick up steam once $22 cracks which it did yesterday. Our original plan was to only hold these options open until Friday so let’s see how things go the rest of the week.
Tiffany & Co. (TIF, $61.50, down $0.38)
October 60 puts (TIF121020P00060000, $1.00, up $0.05)
Entry Price: $1.25 (9/26/12)
Exit Target: $2.50
Return: -20%
Stop Target: None
Action: The stock popped to a high of $62.81 yesterday morning and we mentioned resistance should hold at $63. Bingo. Shares retreated and tested a low $61.27 shortly after our midday update. We would like to see a drop below $60 this week which would get the 50-day MA in play. A move below this level could lead to double-nickels if $58 fails to hold.
Buffalo Wild Wings (BWLD, $86.20, up $0.46)
November 70 puts (BWLD121117P00070000, $1.05, down $0.15)
Entry Price: $1.25 (9/26/12)
Exit Target: $2.20
Return: -16%
Stop Target: None
Action: There is risk for a back test to $87 this week and shares kissed $86.50 yesterday. We are looking for a drop down to $82 which should get $80 and the MA’s in play.
TiVo (TIVO, $10.45, up $0.02)
November 10 calls (TIVO121117C00010000, $0.85, flat)
Entry Price: $0.70 (9/25/12)
Exit Target: $1.40
Return: 21%
Stop Target: None
Action: TiVo made a high of $10.61 yesterday and resistance at $10.50 has been a headache. A close above this level should lead to a run at $11-$11.50. Support should hold at $10 on a pullback which was prior resistance.
KLA-Tencor (KLAC, $47.29, down $0.41)
October 45 puts (KLAC121020P00045000, $0.45, up $0.05)
Entry Price: $0.55 (9/20/12)
Exit Target: $1.10
Return: -18%
Stop Target: None
Action: Shares could test the low $40’s on a break below $46. Resistance is at $50 and yesterday’s high was $48.94. These options have less than 3 weeks before they expire so we need to see a continued breakdown this week.
Akamai Technologies (AKAM, $38.21, down $0.05)
October 40 calls (AKAM121020C00040000, $0.45, down $0.05)
Entry Price: $0.90 (9/17/12)
Exit Target: $1.80
Return: -50%
Stop Target: None
Action: Akamai didn’t get the pop like we were expecting yesterday as shares could only muster a run to $38.95. The options reached a high of 68 cents. Resistance has been a brick wall at $39 but if shares can clear $40, it’s off to the races but we are running out of time.
Taiwan Semiconductor Manufacturing (TSM, $15.90, up $0.08)
October 15 calls (TSM121020C00015000, $0.95, up $0.05)
Entry Price: $0.45 (9/11/12)
Exit Target: $0.90 (closed HALF at 80 cents on 9/28/12)
Return: 94%
Stop Target: 45 cents
January 15 calls (TSM130119C00015000, $1.40, up $0.05)
Entry Price: $0.90 (9/11/12)
Exit Target: $1.80
Return: 56%
Stop Target: 90 cents
Action: We are looking for shares to challenge the 52-week high of $16.15 this week. Shares traded up to $15.94 yesterday but we will need a close above $16 to stay in the October calls. If shares retreat below $15.50, we will lock-in profits. Yesterday’s low was $15.70.
Solazyme (SZYM, $11.45, down $0.04)
December 12.50 calls (SZYM121222C00012500, $0.65, flat)
Entry Price: $0.70 (9/5/12)
Exit Target: $1.40
Return: -7%
Stop Target: 50 cents
Action: We would like to see a close above $12 this week.
Knight Capital Group(KCG, $2.72, up $0.05)
January 2.50 calls (2013) (KCG130119C00002500, $0.40, flat)
Entry Price: $0.70 (8/21/12)
Exit Target: $1.40
Return: -27%
Stop Target: 50 cents
Action: There is still risk down to $2 but shares may have bottomed after testing $2.34 last week. Shares were near $2.80 when we entered this trade back in August after tumbling from $10 to $2.50 in late July on the company’s trading fiasco. We think a buyout offer north of $5 could be in the cards by yearend.
Other 2012 Portfolio OPEN positions (4): 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 GroupOctober 24 puts (from August 2012)
Pepsico October 75 calls (from August 2012)
Bank of America January 12.50 calls (2013) (from March 2012)
eBay October 52.50 calls (from September 2012)
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.
American Express (AXP, $57.73, up $0.87)
November 60 calls (AXP121117C00060000, $0.70, up $0.25)
October 60 calls (AXP121020C00060000, $0.30, up $0.15)
Thoughts: This is our favorite Financial stock and the 52-week high is north of $60. We recommended AXP earlier this year when shares were challenging 52-week highs and the calls were up a whopping 475% in just over 2 weeks. The October calls are “cheap” out-of-the-money options that could double or triple if shares push $60 over the next few weeks but the November’s are the safer play if there is a pullback.
Caterpillar (CAT, $85.47, down $0.57)
October 82.50 puts (CAT121020P00082500, $1.05, up $0.05)
November 80 puts (CAT121117P00080000, $1.80, up $0.10)
Thoughts: We might go with one of these put options if shares fall below $85.
Coinstar (CSTR, $44.45, down $0.53)
October 42.50 puts (CSTR121020P00042500, $1.00, up $0.05)
Thoughts: Resistance at $45 is trying to stick.
Ralph Lauren (RL, $151.76, up $0.53)
October 140 puts (RL121020P00140000, $0.70, down $0.15)
Thoughts: Shares could retest $140-$135 if $150 fails to hold..
Lions Gate Entertainment (LGF, $14.96, down $0.31)
October 15 puts (LGF121020P00015000, $0.45, up $0.10)
November 14 puts (LGF121117P00014000, $0.40, flat)
Thoughts: We would wait for shares to drop below $14 to confirm a breakdown that could push shares as low as $10.
Netflix (NFLX, $56.05, up $1.61)
October 50 puts (NFLX121020P00050000, $0.60, down $0.50)
Thoughts: There is still risk up to $57 but we liked the close below $55.
Fossil (FOSL, $86.03, up $1.33)
October 75 puts (FOSL121020P00075000, $0.75, down $0.25)
December 55 puts (121222P00055000, $0.55, down $0.15)
Thoughts: We have a near-term target of $80 which would likely trip on a move back below $85 and a 6-12 month target of $40 if shares fall below $60.
Monster Beverage (MNST, $55.03, up $0.97)
November 50 puts (MNST121117P00050000, $1.70, down $0.45)
October 52.50 puts (MNST121020P00052500, $1.00, down $0.15)
Thoughts: We have a feeling shares are going to test $50 again and a break below this level should lead to a quick trip to $45. Resistance at $55 is trying to hold which was prior support.