Option Investor
Newsletter

Daily Newsletter, Monday, 4/25/2011

Table of Contents

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

Market Wrap

Stocks Dinged By Commodity Prices

by Todd Shriber

Click here to email Todd Shriber
It was bound to happen sooner or later. That is stocks having an off day with the blame being laid at the doorstep of higher commodities prices. The S&P 500 endured a small loss, ending a three-day winning streak that had sent the index to its highest level since February. The Dow Jones Industrial Average and the Russell 2000 also absorbed small losses on the day while the Nasdaq was the lone winner of the group with a gain of almost 6 points.

Stats Table

Speaking of commodities, gold and silver continued moves that can only be considered parabolic at this point. Maybe the metals were advancing today ahead of the Federal Reserve press event on Wednesday. That could just be a tidy reason because I am not sure either metal knows how to do anything but go higher. Gold's winning streak is now eight consecutive days and those eight days, the last six have all seen record closes for the yellow metal.

So it may not be much of a surprise that on a Monday that was extremely quiet on the mergers and acquisitions front that the one noteworthy deal of the day comes courtesy of the gold mining sector. Shares of Barrick Gold (ABX) slid nearly 7% on volume that was more than triple the daily average after the Toronto-based company announced it will acquire Equinox Minerals for $7.7 billion in cash, besting an offer for the Canadian company made by China's Minmetals Resources earlier this month by 16%. Equinox's board has unanimously approved the Barrick bid.

This deal is much more about copper than gold as Equinox owns one of Africa's largest copper mines and Barrick is already a major copper producer. The acquisition will double Barrick's current production to around 600 million pounds, Reuters reported. Still, when a chart looks the way gold's does, that means at least a few of the the well-run, large-cap miners have the currency with which to do some shopping.

Gold Chart

Silver continues to astound as well, probably more so than gold. The white metal flirted with the $50 area early in today's session before pulling back, but even with that price retreat, we're still looking at nine consecutive days of gains for silver, the best winning streak streak in over three years, and near-record prices.

Silver's ascent has been so intense in recent weeks that the $50 price target so many analysts offered up earlier this year now looks far too conservative. Eric Sprott of Sprott Asset Management recently said silver could see $100 an ounce. That may seem far-fetched, but is this a chart to bet against?

Silver Chart

Probably not and the options market seems to agree. On Monday, about 919,000 calls traded in the iShares Silver Trust (SLV) compared to 515,000 puts. There have been plenty of calls recently that silver is in a bubble and that inflation fears are fueling this rally and that when the bubble bursts, it is going to be ugly.

It probably will be, but it seems a lot of folks that are calling for silver's demise forget the key fact that 50% of silver demand is industrial. Silver is used to make bearings for jet engines and while Boeing's (BA) new orders are expected to be flat this year, analysts are forecasting a sizeable increase in 2012. There's one fundamental factor in silver's favor. Silver is also used in water purification systems, a high-growth area when considering that much of the world does not have access to suitable drinking water. I could list dozens of other uses for silver, that particularly in a recovering economy, should pick up, but I will just end the discussion by saying there are fundamentals in place to support more gains in silver.

Of course, the commodities sword is of the double-edged variety. Just look at the announcements today out of the consumer products sector. Dow component Procter & Gamble (PG) said it will raise prices on Pampers diapers, Charmin toilet paper and Bounty paper towels, citing rising pulp, oil and gas prices as reasons shoppers will feel more of a pinch.

Shares of P&G rival Kimberly-Clark (KMB) slumped almost 3% today on volume that was more than double the daily average after the company said its first-quarter profit 9% to $372 million, or 86 cents per share, from $411 million, or 92 cents per share, a year earlier as revenue rose 4% to $5 billion. Excluding one-time items, Kimberly Clark earned $1.09 a share. Analysts were expecting $1.17.

Last month, Texas-based Kimberly-Clark said it would raise prices 3%-7% on items such as diapers and toilet paper, but today the company again said it was raising prices on various, the third such declaration by Kimberly-Clark in barely over a month. Investors may be tired of hearing the commodities prices bit from any number of companies and shoppers are not fans of it either. Both groups have alternatives, and neither is appealing to companies Kimberly-Clark and P&G. Investors can dump the stocks and shoppers can buy store brands to save a few bucks.

Kimberly-Clark Chart

Just when it was looking safe to get back in the tech waters, there was an epic disappointment after the close today from a company that can ill afford any negative surprises, that being Netflix (NFLX). The company reported strong first-quarter results after the bell, but in the essence of time, I will not highlight those numbers because the real story here is the outlook.

The company added 3.6 million new subscribers in the first quarter and over 3 million in the fourth quarter of 2010. That is great, but it also makes the stock vulnerable to disappointing news on subscriber growth an that's exactly what Netflix served up. The company is forecasting 1.3 million to 2.25 million new subscribers in the current quarter and a profit of $1.15 a share. Analysts were expecting $1.19.

Another cause for concern may be the $192 million Netflix spent on streaming rights in the first quarter, more than four times what the company spent in the comparable period a year ago. The company now has 23.6 million subscribers, but none outside of the U.S. and Canada. These are exactly the types of bullet points short sellers love when it comes to stocks with a P/E ratio of 85.

Plenty of traders have gotten burned in recent months trying to short Netflix and with good reason. The company was delivering plenty of reasons to make it dangerous to be short the stock, but the shorts may be getting their due as the disappointing outlook has Netflix down almost 5% in after-hours trading.

Netflix Chart

Looking at the charts, I am going to start with the Nasdaq for a change because I just discussed Netflix and there are a couple of big earnings reports from Nasdaq constituents tomorrow after the close. When considering how strong the Nasdaq's rally to 2820 was last week, the expectation of some profit-taking today would have been reasonable. Instead, the index was the only gainer among the major indexes today. No guarantees, but I think that changes tomorrow as the market absorbs the Netflix report.

Netflix alone will not drag the Nasdaq back to support at 2800, but if Amazon (AMZN) and Panera (PNRA) deliver strong guidance after the close, the Nasdaq could rally into resistance at 2835 leading up to the Fed event on Wednesday.

Nasdaq Chart

The S&P 500 offered little in the way of excitement today, trading in a range of just six points, meaning the index needs to conquer mental resistance at 1340 and then the February high at 1344 before we get to 1350 and a new round of price-target revisions from analysts. Think Fed Chairman Ben Bernanke does not know this? I do not want to diminish the impact earnings will have on the S&P 500 this week, but Wednesday will be the big day for stocks and that will have little to do with earnings. There are a bunch of oil earnings this week, but that story is pretty obvious at this point.

S&P 500 Chart

This is a monster week for Dow earnings, but leading up to the Fed even on Wednesday, I doubt the Dow runs up to resistance at 12,530, even with 3M (MMM) reporting tomorrow. As I said with regards to the S&P 500, the oil earnings story probably will not surprise many investors, so I would turn my attention to Caterpillar's (CAT) earnings on Friday as the marquee report to watch post-Fed Wednesday.

Dow Chart

The Russell 2000's bounce off support at 820 earlier this month has been nothing short of impressive and today's meager decline did little to knock the index off a track that seems to be leading back to that old resistance at 855. I'd be watching the Russell tomorrow, particularly late in the day to see if buyers are stepping in ahead of Fed Wednesday.

Russell 2000 Chart

I wouldn't be expecting much in the way of fireworks over the next couple of days as traders will probably take it slow ahead of the Fed event. In other words, Ben Bernanke has the weight of the investing world on his shoulders. If he tells the market what it wants to hear, we'll be probably be looking at some new highs. Of course, the alternative scenario is far less attractive.


New Option Plays

Potential Short Squeeze

by James Brown

Click here to email James Brown


NEW DIRECTIONAL CALL PLAYS

Jos. A Bank Clothiers - JOSB - close: 51.57 change: -0.17

Stop Loss: 49.95
Target(s): 59.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see Trigger

Company Description

Why We Like It:
Bulls may want to keep an eye on JOSB. The stock has huge short interest and a breakout to another high could spark a short squeeze. Currently JOSB is consolidating sideways in its $49-52.50 trading range. I am suggesting we buy calls on a breakout at $52.75. If triggered our target is $59.50.

FYI: The most recent data listed short interest in JOSB at more than 21% of the small 27.3 million-share float. Together the increase the risk of a short squeeze.

Trigger @ $52.75

- Suggested Positions -

Buy the May $55 calls (JOSB1121E55)

- or -

Buy the June $55 calls (JOSB1118F55)

Annotated Chart:

Entry on April xxth at $ xx.xx
Earnings Date 06/02/11 (unconfirmed)
Average Daily Volume = 510 thousand
Listed on April 25th, 2011


In Play Updates and Reviews

Take Some Money Off the Table

by James Brown

Click here to email James Brown

Editor's Note:

Monday produced a very dull session for stocks. I am suggesting we take some money off the table here. Go ahead and take profits in our GLD and SRCL plays. Our SLG trade has hit our profit target. I'm dropping CHD as a candidate.

-James

Current Portfolio:


CALL Play Updates

CH Robinson Worldwide Inc. - CHRW - close: 78.51 change: +0.47

Stop Loss: 75.95
Target(s): 79.50
Current Option Gain/Loss: +86.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/25 update: CHRW continues to inch higher. The stock showed some relative strength with a +0.6% gain and a new three-month high. Tomorrow is our last day. We are planning to exit on Tuesday at the closing bell to avoid holding over earnings. I am moving our stop loss up to $75.95. Our final target remains $79.50.

- Suggested Positions -

Long the May $75.00 calls (CHRW1121E75) Entry @ $2.25

04/25 New stop loss @ 75.95, exit tomorrow at the close
04/23 New stop loss @ 74.95
04/23 Take Profits Now (sell part) option @ $3.80bid (+68.8%)
04/16 new stop loss @ 73.25
04/09 New stop loss @ 72.75

Entry on April 7th at $74.50
Earnings Date 04/26/11(confirmed)
Average Daily Volume = 1.2 million
Listed on April 2nd, 2011


Deere & Co - DE - close: 94.72 change: -0.53

Stop Loss: 92.49
Target(s): 99.70
Current Option Gain/Loss: -15.5%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
04/25 update: Monday was a quiet session for DE with the stock churning sideways in the $95.50-94.00 area. I would still consider new positions now in the $95.00-95.50 zone. Our target is $99.70. We will not hold positions over the mid May earnings report.

NOTE: Traders should be aware that DE's rival Caterpillar (CAT) reports earnings on April 29th. CAT's results could have a big impact on DE.

- Suggested Positions -

Long the May $97.50 call (DE1121E97.5) Entry @ $1.61

Entry on April 21st at $95.25
Earnings Date 05/18/11 (unconfirmed)
Average Daily Volume = 3.8 million
Listed on April 20th, 2011


Fastenal Co. - FAST - close: 65.30 change: -0.24

Stop Loss: 63.75
Target(s): 69.50, 74.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see Trigger

Comments:
04/25 update: FAST failed under the $66.00 level this morning and slipped closer to the $65.00 mark. Aggressive traders may want to buy calls now. I would prefer to see a rally past short-term resistance at $66.00 so I am suggesting a trigger to buy calls at $66.25. If triggered our targets are $69.50 and $74.00. We should expect the $70.00 area to offer some resistance and FAST will likely pull back on the first test of $70.

FYI: FAST is due to split 2-for-1 on May 23rd. Plus, the Point & Figure chart for FAST is bullish with a $72 target.

Trigger @ $66.25

- Suggested Positions -

Buy the May $65.00 calls (FAST1121E65) current ask $1.90

- or -

Buy the June $70.00 calls (FAST1118F70) current ask $0.70

Entry on April xxth at $ xx.xx
Earnings Date 04/12/11 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on April 23rd, 2011


Fortune Brands - FO - close: 63.44 change: -0.24

Stop Loss: 61.75
Target(s): 67.50, 69.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Comments:
04/25 update: Traders bought the dip at $63.00 again but FO remains under the $64.00 level. Currently our plan is to buy calls when FO hits $64.00. If triggered at $64.00 our targets are $67.50 and $69.75. I would keep our position size small to limit our risk. We do not want to hold over the earnings report in early May. We have less than two weeks before FO reports earnings in early May.

FYI: A move past $64.00 would create a brand new quadruple top breakout buy signal.

Trigger @ $64.00 (Small Positions)

- Suggested Positions -

Buy the May $65.00 call (FO1121E65) current ask $1.25

Entry on April xxth at $ xx.xx
Earnings Date 05/05/11 (confirmed)
Average Daily Volume = 973 thousand
Listed on April 5th, 2011


Fossil Inc. - FOSL - close: 96.63 change: -0.08

Stop Loss: 91.95
Target(s): 99.75, 104.75
Current Option Gain/Loss: - 0.0%, and + 4.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
04/25 update: Good news! FOSL provided another entry point with a dip toward $95.00 this morning. Traders bought the dip and shares closed virtually unchanged on the day. We do not want to hold positions over the earnings report in May.

Keep positions small. Our first target is $99.75. The $100.00 mark is probably round-number, psychological resistance. We'll set a secondary target at $104.75 but that might be wishful thinking.

(small positions only) - Suggested Positions -

Long the May $100 call (FOSL1121E100) Entry @ $2.65

- or -

Long the June $100 call (FOSL1118F100) Entry @ $3.75

Entry on April 20th at $95.60
Earnings Date 05/10/11 (unconfirmed)
Average Daily Volume = 858 thousand
Listed on April 13th, 2011


SPDR Gold ETF - GLD - close: 146.87 change: +0.13

Stop Loss: 139.90
Target(s): ---.--, 154.50
Current Option Gain/Loss: +90.2%, and +107.5%
2nd Option Position Gain/loss: +136.4% and +150.9%
Time Frame: 6 to 12 weeks
New Positions: see below

Comments:
04/25 update: Take some money off the table now!

Gold prices rallied to a new record high of $1,519 an ounce this morning. The precious metal couldn't hold these levels and gave back most of its gains. This almost looks like a short-term top or failed rally pattern on the GLD daily chart. I would expect a dip soon. Therefore I am suggesting we take profits on our GLD position now (sell at least half). We can re-evaluate new entry points on dips near $144 or $142.

More conservative traders may want a stop closer to the $142 area. FYI: The Point & Figure chart for GLD is bullish with a $172 target.

- Suggested Positions -

Long the May $145 call (GLD1121E145) Entry @ $1.84

- or -

Long the June $150 call (GLD1118F150) Entry @ $1.33

- Second Entry Point, April 12th, Entry April 13th -

Long the May $145 call (GLD1121E145) Entry @ $1.48

- or -

Long the June $150 call (GLD1118F150) Entry @ $1.10

04/25 Take Profits Now. Sell all or part of our position. Options are at: May $145 calls $3.50 (+90.2% & +136.4%), June $150 calls $2.76 (+107.5% & +150.9%)
04/20 New stop loss @ 139.90

chart:

Entry on April 6th at $142.40
Earnings Date --/--/--
Average Daily Volume = 12.5 million
Listed on April 5th, 2011


Google Inc. - GOOG - close: 525.05 change: -0.05

Stop Loss: 518.75
Target(s): 558.00
Current Option Gain/Loss: -15.0%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
04/25 update: It was a very quiet day for GOOG with shares closing virtually unchanged on the session. There is no change from my weekend comments.

If there was a spot to bet on a bounce this is it. Please note that this is a very aggressive and speculative play. We'll try and limit our risk with very small positions and a tight stop loss under last week's low. Our plan is to ride an oversold bounce back toward resistance near its 200-dma. I'm setting our exit target a $558.00. More aggressive traders could aim for GOOG to fill the gap and rise into the $565-570 area.

I am suggesting call positions now. As an alternative entry you could wait for a rally past $531 again.

(Very Small Positions) Suggested Positions:

Long the May $550 call (GOOG1121E550) Entry @ $3.00

Entry on April 25th at $525.25
Earnings Date 04/14/11 (confirmed)
Average Daily Volume = 3.3 million
Listed on April 23rd, 2011


Intuit - INTU - close: 55.03 change: -0.32

Stop Loss: 53.45
Target(s): 57.50, 59.75
Current Option Gain/Loss: -29.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
04/25 update: Many of the short-term technical oscillators for INTU are starting to roll over. I am growing more cautious on this trade. Currently I'm expecting a dip back toward what should be support near $54.00. Readers may want to wait for a bounce from $54.00 instead of buying the initial dip.

I would keep our position size small to limit our risk (1/2 or less than your normal trade size). Our first target is $57.50.

- Suggested Positions -

Long the May $55.00 call (INTU1121E55) Entry @ $2.40

Entry on April 20th at $55.25
Earnings Date 05/19/11 (unconfirmed)
Average Daily Volume = 2.4 million
Listed on April 14th, 2011


Panera Bread Co. - PNRA - close: 126.88 change: +4.81

Stop Loss: 123.75
Target(s): ---.--, ---.--
Current Option Gain/Loss: + 1.4%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
04/25 update: After two weeks of churning sideways PNRA is finally on the move again. The stock rallied +3.9%. Too bad tomorrow is our last day. We're planning to exit on Tuesday at the closing bell to avoid holding over earnings. More conservative traders may want to exit immediately. Given our time frame, over the weekend I adjusted our target to exit down to $129.00. This level could get hit tomorrow.

Please note our new stop loss at $123.75.

- Suggested Positions -

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

04/25 New stop loss at $123.75
04/25 Exit tomorrow at the close (or at $129.00)
04/23 Prepare to exit on Tuesday at the close
04/16 April calls have expired @ -100%
04/04 1st Target Hit @ 129.50. The April option was at $4.82 (+135.1%) and the May option was at $5.25 (+56.7%)

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


Praxair Inc. - PX - close: 106.81 change: +0.30

Stop Loss: 103.45
Target(s): 104.75, 109.00
Current Option Gain/Loss: +84.6%, and +128.5%
2nd Position Gain/Loss: +118.1%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
04/25 update: PX spiked higher this morning and hit $107.38 before settling into a sideways trade. Our plan is to exit tomorrow (Tuesday) at the closing bell to avoid holding over earnings. Our second and final target is $109.00.

- Suggested Positions -

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

- or -

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

- Second Entry Point, April 12th, Entry April 13th -
- Keep Positions Small -

Long the May $100 call (PX1121E100) Entry @ $3.30

04/23 new stop loss @ 103.45, prepare to exit on Tuesday
04/20 new stop loss @ 101.25
04/19 1st Target Hit @ $104.75. May $100 call @ $5.90 (+51.2%), May $105 call @ $1.80 (+28.5%), 2nd position on May $100 call @ $5.90 (+78.7%)
04/12 New stop loss at $98.90
04/12 Second position on dip near $100
04/09 new stop loss @ 97.90

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


Rockwell Automation - ROK - close: 94.53 change: -0.66

Stop Loss: 90.45
Target(s): 99.50
Current Option Gain/Loss: + 4.8%
Time Frame: six trading days
New Positions: see below

Comments:
04/25 update: Tomorrow is our last day for ROK. We're planning to exit on Tuesday at the close to avoid holding over earnings. More conservative traders may want to exit immediately since ROK looks poised to dip toward $92.00 here.

(Small Positions) - Suggested Positions -

Long the May $95 calls (ROK1121E95) Entry @ $2.45

04/23 Prepare to exit on Tuesday

Entry on April 20th at $93.75
Earnings Date 04/27/11 (confirmed)
Average Daily Volume = 1.1 million
Listed on April 16th, 2011


Ross Stores Inc. - ROST - close: 72.46 change: +0.20

Stop Loss: 69.75
Target(s): 77.25, 79.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see Trigger

Comments:
04/25 update: ROST erased Friday's loss with another bounce from the $72.00 level. More aggressive traders may want to consider bullish positions now. I am suggesting we buy calls on a breakout with a trigger to open positions at $73.55. We do not want to hold over the mid May earnings report so I am suggesting we use the May calls, which expire after the 20th.

If triggered our first target is $77.25. Our secondary target is $79.50. FYI: The Point & Figure chart for ROST is bullish with a $97 target.

Trigger @ $73.55

- Suggested Positions -

Buy the May $72.50 calls (ROST1121E72.5) current ask $1.75

Entry on April xxth at $ xx.xx
Earnings Date 05/19/11 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on April 23rd, 2011


Stericycle Inc. - SRCL - close: 94.24 change: +1.08

Stop Loss: 88.95
Target(s): 94.50, 98.50
Current Option Gain/Loss: +108.0%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
04/25 update: Take profits in our SRCL trade. The high today was $94.49. Our first target has been $94.50. I am suggesting we go ahead and take some money off the table now. We will plan on exiting the rest of our position on Wednesday, April 27th, at the closing bell to avoid holding over the earnings report.

- Suggested Positions -

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

04/25 Take Profits Now. Option @ $5.20 bid (+108%)
04/23 New stop loss @ 89.45
04/20 New stop loss @ 88.95, new first target @ 94.50
04/16 new stop loss @ 87.75
04/04 New stop loss @ 86.75
04/02 New stop loss @ 85.75

chart:

Entry on March 30th at $88.93
Earnings Date 04/27/11 (confirmed)
Average Daily Volume = 479 thousand
Listed on March 29th, 2011


Vertex Pharmaceuticals - VRTX - close: 48.04 change: -1.33

Stop Loss: 45.95
Target(s): 51.85, 58.50
Current Option Gain/Loss: -16.0%
Time Frame: about 2, maybe 3 weeks
New Positions: see below

Comments:
04/25 update: Ouch! Last Thursday's big gain in VRTX has vanished with a sharp decline lower. It would appear investors are nervous about the results from an FDA panel this week. An FDA advisory panel will look at hepatitis C treatments from both VRTX and rival Merck (MRK) soon. Positive comments about MRK's treatment today sent shares of VRTX lower. The action in VRTX is very worrisome. More conservative traders will want to seriously consider an early exit immediately. I am not suggesting new positions at this time. FYI: VRTX's drug will be reviewed on Thursday.

If VRTX fails to hit our stop or target then we'll plan on exiting ahead of the May 3rd earnings report. Our first target is $51.85. Our second, much more aggressive target is $58.50.

- Very Small Bullish Positions -

Long the May $50.00 calls (VRTX1121E50) Entry @ $2.50

Entry on April 10th at $48.28
Earnings Date 05/03/11 (confirmed)
Average Daily Volume = 2.1 million
Listed on April 9th, 2011


Whole Foods Market Inc. - WFMI - close: 65.88 change: -0.42

Stop Loss: 61.70
Target(s): 64.75, 69.00
Current Option Gain/Loss: +51.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/25 update: Given the lackluster market on Monday I am not surprised to see shares of WFMI failing at resistance near its early April highs. The stock could see a dip closer to $64 soon. I am not suggesting new positions at current levels. Our final target is $69.00. More conservative traders may want to adjust their stops higher.

- Suggested Positions -

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

04/16/11 April calls have expired @ -100%
04/13/11 New stop loss @ 61.70
04/02/11 new stop loss @ 59.90
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 05/04/11 (confirmed)
Average Daily Volume = 1.9 million
Listed on March 19th, 2010



PUT Play Updates

Apollo Group Inc. - APOL - close: 39.94 change: +0.14

Stop Loss: 42.55
Target(s): 38.15, 35.50
Current Option Gain/Loss: +10.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
04/25 update: APOL tried to bounce again but failed this morning and spent the rest of the day hovering on either side of the $40.00 mark. I am not suggesting new positions at this time. Our profit targets are $38.15 and $35.50.
The Point & Figure chart for APOL is bearish with a $31 target.

- Suggested Positions -

Long the May $40.00 puts (APOL1121Q40) Entry @ $1.24

04/19 New stop loss @ 42.55

Entry on April 13th at $41.21
Earnings Date 06/30/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on April 12th, 2011


CLOSED BULLISH PLAYS

Church & Dwight Co. Inc. - CHD - close: 78.09 change: -1.67

Stop Loss: 79.45
Target(s): 84.75, 89.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see Trigger

Comments:
04/25 update: I am giving up on CHD. We have been waiting for a breakout higher but instead shares are moving lower. The stock showed relative weakness this morning and closed at new four-week lows. Our trade never opened and I'm removing CHD as a candidate.

Trigger @ $81.35 - never hit!

chart:

Entry on April xxth at $ xx.xx
Earnings Date 05/10/11 (unconfirmed)
Average Daily Volume = 390 thousand
Listed on April 16th, 2011


SL Green Realty Corp. - SLG - close: 79.50 change: +0.79

Stop Loss: 73.99
Target(s): 79.95
Current Option Gain/Loss: +59.0%
Time Frame: just a few days
New Positions: see below

Comments:
04/25 update: Target achieved. SLG rallied to $79.99 before paring its gains. Our target to exit was $79.95. Our May $80.00 calls were trading at $1.75 (bid).

- Small Bullish Positions -

May 80.00 call (SLG1121E80) Entry @ $1.10, exit $1.75 (+59.0%)

04/25 Target Hit @ 79.95, Option @ +59%
04/23 Prepare to exit on the 27th.

chart:

Entry on April 20th at $77.76
Earnings Date 04/27/11 (confirmed)
Average Daily Volume = 800 thousand
Listed on April 19th, 2011