Option Investor
Newsletter

Daily Newsletter, Thursday, 3/31/2011

Table of Contents

  1. Market Wrap
  2. New Option Plays
  3. In Play Updates and Reviews

Market Wrap

Boring End To Q1

by Todd Shriber

Click here to email Todd Shriber
This sounds familiar: Rising oil prices and heightened concerns about the European sovereign debt crisis combine to weigh on stocks. That was the scenario on Thursday as the Dow Jones Industrial Average and the S&P 500 both closed slightly lower on the day while the Nasdaq fought its way to a small gain. Even the with the less-than-inspiring trade on Thursday, this was the best first quarter for U.S. stocks in over a decade.

Stats Table

In economic news, weekly jobless claims fell for the third consecutive week to 388,000 last week from the upwardly revised 394,000 new claims the previous week. While the four-week moving averaged ticked higher, it remains below the all-important 400,000 level at 394,250. Heading into the March jobs report tomorrow, it appears the labor market is at least improving, but upside surprises will be just that: Surprises. Most analysts forecast that the economy added 185,000 nonfarm jobs, down from 192,000 in February, and that the unemployment rate held unchanged at 8.9%, according to Reuters.

Jobless Claims Chart

Speaking of things that weigh on the economy, oil ended the first quarter at a 30-month high as the market continues to be concerned about lost supply due to the Libyan imbroglio. Headlines crossed the wires today that forces loyal to embattled dictator Muammar Qaddafi regained control of Ras Lanuf, a critical Libyan oil port, and were aiming to do the same at Brega, another important Libyan oil outpost.

Libya, home to Africa's largest oil reserves and the continent's third-largest producer behind fellow OPEC members Angola and Nigeria, has seen its daily output slashed in dramatic fashion since the onset of violence in the country. How bad is the production decline in Libya? Libyan oil production tumbled by 995,000 barrels in March to 390,000 barrels a day, according to a Bloomberg News survey.

As was seen in today's trading, oil now faces pretty stiff resistance at $107, the high touched earlier this month. Oil's move to the upside did not carry over to the major U.S. integrateds as CVX and XOM both closed lower to weigh on the Dow and COP was down 1%. On the other hand, both Chevron and ConocoPhillips touched new 52-week highs today. For more news and commentary on the energy sector, register for the OilSlick daily newsletter (HERE).

Oil Chart

One of the day's big winners was Tesla Motors (TSLA), a stock that I admit to having poked some fun at in the past. The still-not-profitable company sells sporty electric cars that are by no means inexpensive and I have openly wondered what car lover would drop six figures on a Tesla car when there a plenty of gas-powered, prestigious European models available at similar and lower price-points.

Morgan Stanley disagrees with me and the bank's 50-page novel/report on Tesla sent the stock soaring 17% on volume that more than nine times the daily average. The stock closed at $27.75 but Morgan Stanley placed a $70 price target on the stock, representing potential upside of more than 200%.

A 50-page analyst report is not an everyday event, but they are published from time to time and when a report is that long, it certainly leaves plenty of room for bold proclamations and Morgan Stanley does not disappoint on that front saying Tesla has the potential to become the fourth major U.S. car producer behind Chrysler, Ford (F) and General Motors (GM).

Morgan Stanley notes that the biggest risk facing Tesla is the company's ability to execute its own business plan and that the company's long-term independence hinges on its ability to make its pricey vehicles more accessible to more buyers.

Perhaps Tesla could legitimize itself among the titans of the U.S. auto industry if it can start profitably producing cars with $30,000 price tags. At least in theory, with the specter of $4 gasoline facing Americans (it is already here in Southern California), Tesla should be in a sweet spot in terms of ramping up sales and profits IF it can produce cheaper cars.

Tesla Chart

One of the noteworthy losers on the day was Warren Buffett's Berkshire Hathaway (BRK-A, BRK-B) on news of David Sokol's controversial departure from the company that was announced Wednesday after the close of U.S. markets. Sokol was widely believed by Wall Street and Berkshire followers to be one of the leading contenders to replace Buffett at the helm of the legendary company upon Buffett's retirement.

No more. If you were following this story when it broke Wednesday evening, its evolution was pretty interesting. It started off with the usual speculation that Sokol was leaving to devote more time to personal causes and philanthropy. Follow financial markets long enough and you will inevitably hear the same canned excuses for executive departures. Perhaps you find yourself wondering if there is anymore to these departures than meets the eye.

In the case of Sokol, there is and we only need to go back a few weeks to see what it is. Earlier this month, Berkshire announced it is buying specialty chemicals maker Lubrizol for $9 billion, and in the days following the announcement, Sokol was widely heralded as the architect behind the deal. Buffett said as much in a statement issued yesterday, confirming that Sokol brought the idea of Berkshire buying Lubrizol up to him in January.

Now this is where it gets really interesting. Buffett was not initially wowed by the idea, but Sokol was able to convert him later in January. Of course, all of this happened two weeks after Sokol scooped up 96,000 shares of Lubrizol for himself. Assuming he still owns his Lubrizol shares, Sokol would be up $3 million and that's on top of the almost $60 million in salary he made at Berkshire's MidAmerican Energy unit over the past five years.

I highly recommend watching Sokol's interview with CNBC where he says he did nothing wrong. My soapbox ends here and you can draw your own conclusions about this situation.

Berkshire-Hathaway Class B Chart

Looking at the charts, today's minor losses did little to inflict any real damage on the Dow and the S&P 500 and it is not likely any of the pundits that have been out in force in recent weeks that have been calling for S&P 500 1400 recently are going to change their tune. Before approaching that lofty level, the index will have to contend with some resistance around 1335 and then again in the low 1350 area.

A move to 1400 from where the S&P 500 closed today would be 5.6% upside. Looking further out, there is resistance between 1400 and 1440 and for those willing to dream big, a move to 1440 is almost 9% from Thursday's close.

S&P 500 Chart

How about Dow 13,000? Well, the last time that lofty level was seen was nearly three years ago on May 19, 2008. From here, the Dow needs to conquer resistance at 12,400, then do the same at 12,800 before 13,000 becomes a legitimate topic of conversation. I think earnings seasons pushes the Dow higher, but 13,000 may prove tricky to surpass heading into the Federal Reserve press event on April 27. Support is 12,170.

Dow Chart

To the Nasdaq goes the honor of being the only one of the three major U.S. indexes close higher today and it did so just a point below resistance at 2782, so there is some work to be done to get back to the February peak of 2840. If 2840 is broken, another 30-40 points could be tacked on. Near-term support is 2755 and then perhaps the 50-day moving average at 2744.

Nasdaq Chart

As Keene noted yesterday, the Russell 2000 was the first of the indexes to set a new high for the year and the index was back at it today with a small gain. The Russell 2000 looks poised to take out old resistance at 852 and that would be significant because as Keene's chart showed last night, that resistance is from October 2007. Support is 820.

Russell Chart

Despite the anemic volume, the path of least resistance is up and I suspect that will remain the case as first-quarter earnings start to flow in. A lot of emphasis is placed on the monthly jobs number, but I get the feeling that this is going to be a non-event unless there is a significant upside or downside surprise. We know what the international issues are that the market has to contend with, but on the domestic front, circle April 27 as an upcoming day to watch. That is the first of Ben Bernanke's quarterly press updates on what the Fed is up to, also known as ''The Defense Of Quantitative Easing and Reasons Why QE3 Is A Good Idea.''


New Option Plays

Looking for 185,000

by James Brown

Click here to email James Brown

Editor's Note:

Once again the stock market is looking toward the monthly jobs report for evidence of the labor market's improvement. After a sharp, two-week bounce from the stock market's March lows there is a chance that traders could use the news tomorrow as an excuse to take profits. Then again if the results are better than expected it could easily kick stocks higher.

I will be curious to see if stocks rally into the close or do they sell-off into the closing bell. How willing are traders to hold positions over the weekend? Tomorrow's market direction will most likely be dictated by the jobs data, which comes out before the opening bell.

I am not adding any new candidates tonight as we wait to see wait to see the jobs number.

- James


In Play Updates and Reviews

Q1 Quietly Closes

by James Brown

Click here to email James Brown

Editor's Note:

Thursday's session ended with a whimper but it was the best first quarter for the S&P 500 since 1998. The trend is very much up but the jobs report tomorrow morning could be pivotal. Traders could use it as a catalyst to take profits if the jobs numbers is disappointing, or as a catalyst to push higher if the jobs data is strong. Of course there is the chance that stocks pop higher in the morning on strong data and then reverse into profit taking ahead of the weekend. Readers may want to wait for a dip before considering new bullish positions.

-James

Current Portfolio:


CALL Play Updates

Baker Hughes - BHI - close: 73.43 change: -0.47

Stop Loss: 67.95
Target(s): 76.50, 79.75
Current Option Gain/Loss: +21.0% and +16.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/31 update: It was a quiet quarter end on Thursday and BHI has spent the last few days consolidating sideways under resistance near the $75.00 level. There is no change from my prior comments. I would still consider new positions on dips in the $73.00-72.50 zone. Our first target is $76.50. Our second target is $79.75. More aggressive traders could aim higher. FYI: If BHI can breakout past the $72.00 level it would create a new quadruple top breakout buy signal on its Point & Figure chart.

- Suggested Positions -

Long the April $75 calls (BHI1116D75) Entry @ $1.00

- or -

Long the May $75 calls (BHI1121E75) Entry @ $2.61

Entry on March 24th at $72.35 *gap higher*
Earnings Date 05/03/11 (unconfirmed)
Average Daily Volume = 4.6 million
Listed on March 23rd, 2011


Baidu, Inc. - BIDU - close: 137.81 change: +1.43

Stop Loss: 124.00
Target(s): 139.00, 147.50
Current Option Gain/Loss: +173.4%, and + 92.1%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
03/31 update: Traders bought the dip in BIDU this morning and shares were slowly drifting higher into the closing bell. If the market rallies on Friday then BIDU has a good chance of hitting our first target at $139.00. More conservative traders may want to start taking profits now, especially with the April $130 call up +173%. I am not suggesting new positions at this time.

Our first target to take profits is at $139.00. We will plan to exit ahead of BIDU's late April earnings report. BIDU can be a volatile stock so I would consider this a more aggressive, higher-risk trade.

- Suggested Positions -

Long the April $130 calls (BIDU1116D130) entry @ $3.20

- or -

Long the May $135 calls (BIDU1121E135) entry @ $5.10

03/26 New stop loss @ 124.00

Entry on March 22 at $127.00
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume = 6.0 million
Listed on March 21st, 2010


Caterpillar Inc. - CAT - close: 111.35 change: -0.18

Stop Loss: 103.75
Target(s): 109.00, 114.00
Current Option Gain/Loss: +101.4%, and +60.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/31 update: CAT delivered a very strong quarterly performance with a +18.8% gain. Shares have been hovering under the $112 level the last couple of days. I am repeating my prior comments that CAT is short-term overbought and due for some profit taking. More conservative traders may want to exit immediately instead of holding on as we target a move to $114.00. I am not suggesting new positions at this time.

- Suggested Positions -

Long the April $105 calls (CAT1116D105) Entry @ $3.40

- or -

Long the May $110 calls (CAT1121E110) Entry @ $3.15

03/26/11 New stop loss @ 103.75
03/25/11 1st Target Hit @ 109.00, Options @ +58.8%, +37.7%

Entry on March 18th at $104.99 (gap higher)
Earnings Date 04/29/11 (unconfirmed)
Average Daily Volume = 7.4 million
Listed on March 17th, 2010


Capital One Financial - COF - close: 51.96 change: -0.15

Stop Loss: 49.49
Target(s): 54.75, 59.00
Current Option Gain/Loss: - 7.9% and -72.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/31 update: Financial stocks continue to lag the rest of the market. I am growing more concerned that COF might be building a bearish double top pattern with the resistance near $53 in February and a potential failed rally near $53 now in late March. I am not suggesting new bullish positions at current levels. Wait for another bounce from the $50 zone. Our targets are $54.75 and $59.00.

- Suggested Positions -

Long the April $50 call (COF1116D50) Entry @ $2.63

- or -

Long the April $55 call (COF1116D55) Entry @ $0.65

03/24 New stop loss @ 49.49

Entry on March 16th at $51.08
Earnings Date 04/21/11 (unconfirmed)
Average Daily Volume = 4.4 million
Listed on March 15th, 2010


CSX Corp. - CSX - close: 78.60 change: +1.03

Stop Loss: 73.45
Target(s): 79.90, 83.75
Current Option Gain/Loss: -14.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/31 update: There was no follow through lower on yesterday's sell-off in CSX. I remain cautious here. Look for support near $76 or $75 as a new entry point to buy calls. Don't forget that we plan to exit before CSX reports earnings in two or three weeks.

Our plan was to keep our position size small to limit our risk. FYI: The Point & Figure chart for CSX is bullish with a $98 target.

- Small Bullish Positions -

Long the April $80 calls (CSX1116D80) Entry @ $1.06

03/28 1st Target Hit @ 79.90, Option @ $1.90 (+79.2%)

Entry on March 21 at $77.25
Earnings Date 04/13/11 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on March 19th, 2010


Jones Lang Lasalle Inc. - JLL - close: 99.74 change: +0.85

Stop Loss: 96.40
Target(s): 102.50, 109.00
Current Option Gain/Loss: -32.3%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/31 update: JLL is bouncing from technical support near its 30 and 40-dma. A rebound back above the $100 mark might be a new bullish entry point to buy calls. More conservative traders will want to consider raising their stops. The 50-dma near $96.85 should offer additional support.

Prior Comments:
We wanted to keep our position size small to limit our risk. Our targets are $102.50 and $109.00.

- Suggested Positions - (Small Positions)

Long the April $100 calls (JLL1116D100) Entry @ $3.40

03/30 new stop loss @ 96.40
03/24 New stop loss @ 95.40
03/17 Exited March calls @ open, Estimated exit @ 0.10 (-94.2%)
03/10 New stop loss @ 93.85

Entry on February 28th at $97.96
Earnings Date 04/27/11 (unconfirmed)
Average Daily Volume = 386 thousand
Listed on February 26th, 2010


Noble Corp. - NE - close: 45.62 change: -0.50

Stop Loss: 43.95
Target(s): 49.75, 53.50
Current Option Gain/Loss: - 9.2%, and -15.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/31 update: I found the action in NE today a bit surprising. Oil rises to new two-year highs near $106 a barrel but the rally in the energy stocks stalls. Shares of NE actually underperformed their peers. Shares opened higher at $46.25 but closed with a -1% loss. The move today in NE actually produced a bearish engulfing (reversal) candlestick pattern. Now these patterns normally need to see confirmation but it's a warning signal. NE may be headed back toward the $45-44 zone. I would be tempted to buy dips in the $45-44 area. More conservative traders might want to wait for NE to trade past the March 22nd high of $46.72 before initiating positions.

Our targets are $49.75 and $53.50. I would expect the $50.00 level to offer some resistance and it could take NE a little while to break through it. We will plan to exit ahead of the April 20th (unconfirmed) earnings report.

- Suggested Positions -

Long the May $46.00 calls (NE1121E46) Entry @ $2.17

- or -

Long the May $48.00 calls (NE1121E48) Entry @ $1.37

Entry on March 31st at $46.25
Earnings Date 04/20/11 (unconfirmed)
Average Daily Volume = 4.5 million
Listed on March 30th, 2011


Norfolk Southern - NSC - close: 69.27 change: +0.28

Stop Loss: 64.90
Target(s): 72.00, 74.90
Current Option Gain/Loss: + 60.0%, and +32.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/31 update: NSC tried to rally back above the $70 level again but didn't have enough gas to do it. I would wait for a dip into the $68-66 zone before considering new bullish positions. Our targets are $72.00 and $74.90. We do not want to hold past NSC's late April earnings report.

- Suggested Positions -

Long the April $70 calls (NSC1116D70) Entry @ $0.50

- or -

Long the May $70 calls (NSC1121E70) Entry @ $1.40

Entry on March 25th at $67.84
Earnings Date 04/27/11 (unconfirmed)
Average Daily Volume = 3.0 million
Listed on March 24th, 2011


Polaris Industries, Inc. - PII - close: 87.02 change: -0.10

Stop Loss: 81.75
Target(s): 84.95, 89.00
Current Option Gain/Loss: +27.5%
Time Frame: 4 to 7 weeks
New Positions: see below

Comments:
03/31 update: PII saw a quiet quarter end with shares churning in the $86-87.50 area. The trend is up but PII is arguably short-term overbought. Our final exit target is $89.00. I am not suggesting new positions at current levels.

Our plan was to keep our position size small. FYI: The Point & Figure chart for PII is bullish with a $98 target.

- Small Positions -

Long the April $85 calls (PII1116D85) Entry @ 2.00

03/30/11 New stop loss @ 81.75
03/26/11 New stop loss @ 79.75
03/25/11 1st Target Hit @ 84.95, Option @ $2.10 (+5%)

Entry on March 18th at $82.25
Earnings Date 04/21/11 (unconfirmed)
Average Daily Volume = 396 thousand
Listed on March 14th, 2010


Panera Bread Co. - PNRA - close: 127.00 change: +0.23

Stop Loss: 119.00
Target(s): 129.50, 134.50
Current Option Gain/Loss: +70.7%, and +28.3%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
03/31 update: PNRA also spent the session consolidating sideways. I suspect the stock could see some volatility tomorrow as investors react to the jobs report. A could report could push PNRA past the $130 mark. If you're looking for a new entry point I probably wouldn't chase it here. Look for a dip or a bounce near the $123.50 area. Our upside targets are $129.50 and $134.50. We do not want to hold over the late April earnings report but that date is currently unconfirmed.

FYI: PNRA is currently trading in the $120 area. The last time the company had a stock split it was back in June 2005 with shares in the $120s. You never know when they might announce a split although if they do it would probably be with their earnings report.

- Suggested Positions -

Long the April $125 call (PNRA1116D125) Entry @ $2.05

- or -

Long the May $130 call (PNRA1121E130) Entry @ $3.35

Entry on March 29th at $123.55
Earnings Date 04/27/11 (unconfirmed)
Average Daily Volume = 363 thousand
Listed on March 26th, 2011


Praxair Inc. - PX - close: 101.60 change: +0.58

Stop Loss: 97.40
Target(s): 104.75, 109.00
Current Option Gain/Loss: - 5.1%, and - 7.1%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
03/31 update: PX briefly hit a new high on its intraday move above $102.00. The trend is up. I would consider new positions here or on dips near the $100 area. Our first target to take profits is at $104.75. Our second and final target is $109.00. We will plan to exit ahead of the late April earnings report.

Open bullish positions now, above $100

- Suggested Positions -

Long the May $100 call (PX1121E100) entry @ $3.90

- or -

Long the May $105 call (PX1121E105) entry @ $1.40

Entry on March 30th at $101.54
Earnings Date 04/27/11 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on March 29th, 2011


Quality Systems Inc. - QSII - close: 83.34 change: +0.21

Stop Loss: 78.60
Target(s): 87.25, 94.50
Current Option Gain/Loss: -44.4%, and - 2.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/31 update: QSII continues to trade near its highs but did not make much progress on Thursday. There is no change from my prior comments. I am tempted to move our first profit target down from $87.25 toward the $85 area.

Momentum traders could buy this breakout. I would prefer to buy a dip near $81.00.

Prior Comments:
FYI: Readers will be interested to note that the most recent data listed short interest in QSII at almost 28% of the very small 17.5 million-share float. That's definitely a recipe for a short squeeze. Plus, the Point & Figure chart for QSII is bullish with a $119 target.

- Suggested Positions -

Long the April $85 calls (QSII1116D85) Entry @ $1.35

- or -

Long the June $85 calls (QSII1118F85) Entry @ $3.40

03/24 New stop loss @ 78.60

Entry on March 4th at $81.44
Earnings Date 05/31/11 (unconfirmed)
Average Daily Volume = 154 thousand
Listed on March 3rd, 2010


Stericycle Inc. - SRCL - close: 88.67 change: +0.49

Stop Loss: 84.90
Target(s): 93.50, 98.50
Current Option Gain/Loss: -18.0%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
03/31 update: SRCL dipped under the $88 level before bouncing back late this afternoon. Shares look poised to move higher. I would still consider new bullish positions now at current levels.

More conservative traders might want to consider a tighter stop loss. Our targets are the $93.50 and $98.50 levels but we will plan to exit ahead of the late April earnings report.

- Suggested Positions -

Long the May $90 calls (SRCL1121E90) Entry @ $2.50

Entry on March 30th at $88.93
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume = 479 thousand
Listed on March 29th, 2011


Whole Foods Market Inc. - WFMI - close: 65.90 change: -0.03

Stop Loss: 58.49
Target(s): 64.75, 69.00
Current Option Gain/Loss: +178.4%, and +73.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/31 update: Thursday proved to be a very quiet day for WFMI with the stock hovering in a narrow range near $66.00. There is no change from my prior comments. Our final target is $69.00 but I would not open positions at current levels. Wait for a pull back. More conservative traders may want to bump up their stop loss.

Our upside targets are $64.75 and $69.00. FYI: The Point & Figure chart for WFMI is bullish with an $86 target.

- Suggested Positions -

Long the April $65 calls (WFMI1116D65) Entry @ $0.65

- or -

Long the May $65 calls (WFMI1121E65) Entry @ $2.25

03/30/11 1st Target Hit @ 64.75, April $65 call @ 1.25 (+92.3%)
May $65 call @ 3.50 (+55.5%)
03/29/11 new stop loss @ 59.49
03/26/11 New stop loss @ 58.49

Entry on March 21 at $61.55
Earnings Date 05/11/11 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on March 19th, 2010


Wellpoint Inc. - WLP - close: 69.79 change: +0.14

Stop Loss: 65.75
Target(s): 72.25, 74.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: Yes, see trigger

Comments:
03/31 update: WLP saw a brief dip this morning but shares quickly recovered. The stock bounced back toward resistance near $70.00. We currently have two triggers to buy calls. One is a buy the dip trigger at $68.25. The second is a breakout trigger at $70.25. If triggered on the dip, we'll use a stop at $65.75. If triggered on the breakout we'll move the stop to $66.75. We do not want to hold over the late April earnings report.

FYI: Readers may want to keep their position size small.

Trigger @ 68.25 or $70.25

- Suggested Positions -

Buy the April $70 call (WLP1116D70) current ask $1.23

- or -

Buy the May $70 call (WLP1121E70) current ask $2.45

Entry on March xxth at $ xx.xx
Earnings Date 04/27/11 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on March 26th, 2011


CLOSED BEARISH PLAYS

Everest Re Group Ltd. - RE - close: 88.18 change: +4.75

Stop Loss: 84.25
Target(s): 76.00, 71.00
Current Option Gain/Loss: -65.0%, and -48.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/31 update: What in the world happened to shares of RE today? The stock exploded higher at the open and just kept climbing. RE pushed through resistance at its exponential 200-dma, resistance near $84.00, 85.00, $86,00, its 30, 50, and 100-dma. What's really strange is that I could not find any news to account for this big move higher in RE. There were no new press releases. Shares of XL, PRE, RNR, and MRH did show strength but nothing like the move in Everest. Furthermore none of them had any news out today with the exception of RNR, which garnered some positive analyst comments.

The action in RE today looks like a short squeeze but the most recent data did not list very much short interest in RE's stock (granted this data was dated prior to the Japan earthquake news).

Our stop loss was hit at $84.25 early Thursday morning so the play is closed.

Our plan was to keep our position size small to limit our risk.

- Small Bearish Positions -

April $80 PUTs (RE1116P80) Entry @ $1.00, Exit @ 0.15 (-85%)

- or -

May $80 PUTs (RE1121Q80) Entry @ $2.50, Exit @ 1.00 (-60%)*

03/31 Stopped out @ 84.25, Options @ -85% and -60%*
*exit is an estimate, the May put did not trade today.

chart:

Entry on March 23rd at $81.43
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume = 381 thousand
Listed on March 22nd, 2011