Option Investor
Newsletter

Daily Newsletter, Thursday, 4/12/2012

Table of Contents

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

Market Wrap

Earnings Season Expectations Trumps Data

by Thomas Hughes

Click here to email Thomas Hughes
Economic data weighed on the markets early this morning but seemed to be shrugged off in anticipation of this seasons earnings reports. The market is eagerly awaiting this quarters numbers which have started off OK. Expectations got a boost today when speculation that China's GDP is outpacing estimates. Financial and materials stock led the markets today on renewed hopes of global economic expansion.



Futures were lukewarm today and the market was fairly quiet at the open. Today's economic data was not viewed negatively in the long term. Initial claims for unemployment was a surprise today but the number is skewed due to the Easter holiday. The number is likely to be revised with next weeks data. This weeks number on initial jobless claims jumped 13,000 from last weeks upwardly revised 367,000 to a total of 380,000. Analysts had been expecting claims to decline, a trend which is expected to continue from here. The four week moving average of initial unemployment claims climbed 4,250 to 368,000.


Continuing claims, which lags initial claims by a week, continued to fall. This number fell by 98,000 to 3,251,000 from last weeks revised data.


Total claims for unemployment also fell. Total claims were 6,952,876, 18% lower than the same time period last year.


Other economic data released today was met without fanfare. The Producer Price Index remained flat for the month while core PPI gained .3%, hotter than previously expected. Also, the trade balance shrank by 12% as exports hit a record high. At home, foreclosure rates dropped to the lowest quarterly level since 2007.

The European markets closed higher by more than 1% today, buoyed by US economic data. The FTSE 100 index led with a 1.6% gain followed by the Xetra Dax, 1.18%, and the CAC 40, 1.11%.Earlier, shares had been positive but flat from yesterday on concerns of widening debt issues. Yields on Italian three year bonds have risen more than a percent in the last month on growing concerns the country will continue to struggle with debt. The surprising gain in unemployment claims added to this and other fears the Eurozone debt issues were spreading.

News from Asia was quiet today ahead of tomorrow's expected release of first quarter gdp figures from China. China is expected to release the numbers overnight and there is talk of 9% growth versus the generally expected 8.4% and China's own estimates of growth around 7.5%. China's bank lending has recently reached a new high as signs of credit easing is beginning to gain traction and supporting the chance China could be growing faster than expected.

Royal Dutch Shell (RDS/A) was in the spotlight all day as news from reported oil spill in the Gulf of Mexico claimed attention. A ten square mile spill was reported in overnight news and response teams were sent out to investigate. Shares opened lower today on the US market but traded up on high volume throughout the day as traders awaited further news. Shell stated that it was confident the slick was not from its wells. The stock gained on the days initial loss with high volume.

Google (GOOG) was also in the spotlight as traders and investors awaited the company's earnings release which came after the bell. The stock jumped over 1% at market open and gained throughout the day on strong volume. Google's 1st quarter earnings per share, $10.08, were better than the expected $9.65 per share. Revenue was inline with expectations. The stock traded heavily after hours, surging as much as $10 on the release. Cost per click was down for the quarter but total paid clicks is on the rise. Google also announced a planned 2:1 stock split.

Google, daily

Other earnings releases of note today include Fastenal (FAST), RiteAid (RAD) and several regional banks. Fastenal reported first quarter 2012 earnings net earnings per share increased by over 25% from the same period last year to $0.34 per share. This was driven by an increase in new stores and same store sales growth. Fastenal is expecting to open more new stores in 2012. The company will be struggling with higher fuel prices which rose by over 10% in the quarter. Consensus estimate was for $0.35 per share, the narrow miss sent the stock down by over 2% in intra day trading. Today's decline was met with heavy volume. The stock has turned bearish in the short term, making a new lower low.

Fastenal, daily

Rite Aid improved results from last year but failed to turn a profit. The pharmacy and health care retailer reduced yearly losses in fiscal 2012 and projects that 2013 will be about the same. Sales increases in 2012 were attributed to an increase in same store traffic and an extra week in the reporting period. Same store sales increased by 2% in the period and Rite Aid expects the growth to remain flat, in the 1.5-2% range in fiscal 2013. The stock traded down around 1% today but regained the loss. Trading remains below the short term moving average but momentum is rolling over.

Rite Aid, Daily

Commerce Bancshares Inc (CBSH) gained more than 2% in today's trading and crossed above the 30 day moving average. The move came on record quarterly earnings. The company earned $0.74 per share in the first quarter, an 11% gain over last year and 7 cents above consensus estimates. Gains were based on increases in all business segments and are expected to continue into the current year. Investment banking, mortgage lending and deposit accounts were all up.The gains failed to spark support and the stock fell in the afternoon to close below the the short term moving average.

Commerce Bancshares, daily

The financial sector was one of today's leaders. The financial Spyder (XLF) gained more than 1.80% and closed above the short term moving average. The sector has been trading up all year and is still above trend.

Financial Spyder, daily

JP Morgan and Wells Fargo are both reporting tomorrow and are expected to release the information before the opening. Both stocks traded higher today ahead of the reports and are moving up from their short term moving averages toward recent highs.

JP Morgan, daily

Wells Fargo, daily

Energy stocks also led today's market. The energy Spyder (XLE) gained over 2%, erasing the last two days losses. The sector has been trending sideways for more than twelve months as warm weather, low natural gas and high crude prices affect revenue and profits.

Energy Spyder, daily

Today's gain in energy was led by Rowan Companies (RDC) and Peabody Energy (BTU). Rowan shares moved up on announced plans that it would keep its stock listed on the New York Stock exchange. The company is moving its headquarters to England but will continue to list class A shares in the US which will allow it to maintain its position in the S&P 500. Share price jumped over 9% today on high volume to close above the 30 day moving average.

Rowan Companies, daily

Peabody Energy gained over 7% in today's trading. The signs of strength from China, which is the worlds largest consumer of coal, boosted the entire energy complex and coal stocks in particular.

Peabody Energy, daily

The materials sector was also strong today. The materials Spyder (XLB) gained over 2.8%. Renewed hope of global expansion helped in this sector as well.

Materials Spyder (XLB), daily

Freeport McMoRan (FCX) was a leader among materials stocks. The company gained nearly 6% in today's trading. Freeport McMoRan is scheduled to release earnings next week.

Freeport McMoRan, daily

The market remains active for initial public offerings. Out of five scheduled openings three actually made it to open this week. Erickson Air-Cran (EAC), maker and operator of heavy lift crane and transport helicopters opened this week at the expected share price of $8. This stock had been scheduled to open last week but postponed. The stock has remained stable around $8 since its opening yesterday but trading remains thin.

Erickson Air-Cran, two days

Aleris (ARS), manufacturer of aluminum products, postponed their opening to a later date. BrightSource Energy (BRSE) withdrew their opening altogether. This puts the solar energy company back at square one in the transition to public sale.

Forum Energy Technology (FET) was hot this morning. Opening was projected between $18-$20 but ramped up to $22.50 at open. The stock traded steadily between $22 and $22.50 throughout the morning and then fell to close at $21.75 with 2.3 million shares traded. Forum Technology is an oil field products company servicing on and off shore needs.

Forum Energy Technology, One Day

MRC Global (MRC) priced between $21-$23 but actually opened below the range at $20.50. The stock found quick support and traded up over $21 by mid-morning. The company distributes PVF products to the energy industry and closed its first day at $21.04.

MRC Global, one day

Oaktree Capital (OAK), an investment management firm focused on alternative markets, also opened at the low end of its projected range. The stock traded up throughout the morning on weak volume and ended the day at $42.39.

Oaktree Capital, one day

Acme Packet received an upgrade from Barclay's. The stock was moved to overweight from equal weight. The company is scheduled to release earnings May 2nd. The companies revenues in the fourth quarter and full year grew by 18% and 33% last year. Consensus estimates for earnings this quarter are $0.17 per share compared to last years $0.27. Acme could be forming support around $25.

Acme Packet, daily

Mattel (MAT) was also upgraded and gained about 2% in today's trading. The stock is expected to report an earnings increase near 40% from the previous year. Mattel has scheduled their conference call and earnings announcement for next Monday. The current average estimate is around $2.42 per share with projections for that to increase again to $2.66 in fiscal 2013. The stock is trading near 12 year highs and the trend is up.

Mattel, daily

Natural Gas Inventories were reported to have increased by 8 billion cubic feet and sent the price up by 0.76% but failed to break back above $2. The possibility that China has escaped a hard landing have also helped to elevate energy prices. The chance of increased demand from China is causing some to question projections for 2012 demand. The cost of crude gained about 0.8% in today's trading.

Gold gained over 1% today as the dollar lost ground. Unemployment claims kept the dollar down and aided the rally in gold. Gold stocks gained today,the AMEX gold index rose by over 3%.

Gold Index, daily

Rates on the 30 year bond rose slightly today.

30 year bond rates, daily

The major indexes made broad gains today. Advancing stocks beat decliners by a wide margin. Unexpectedly negative unemployment data was shrugged off as hopes for renewed growth in China spurred the rally. The broad gains brought the Dow right up to the 30 day moving average and the S&P to just above it. The rally failed to bring the Dow back above 13,000 but it did come very close.

Dow Jones Index, daily

S&P 500, daily

The Nasdaq is showing the most strength. The tech heavy index is moving above the short term moving average and is the only index above the recent up trend. Google's report could help lift tech stocks tomorrow.


It is important to keep an on earnings and economic data. Earnings, and what the related statements say, will help give an impression for the rest of the year and drive the market. China GDP numbers could cause analysts to revise world and domestic growth expectations. Tomorrow we get the consumer price index, Michigan sentiment and expected first quarter GDP numbers from China. If China does come in hotter than expected it could raise hopes for increased world and domestic growth. Look out for retail sales, leading indicators and unemployment numbers next week.

Thomas Hughes


New Option Plays

A Bounce in Healthcare

by James Brown

Click here to email James Brown


NEW DIRECTIONAL CALL PLAYS

Cigna Corp. - CI - close: 48.42 change: +0.84

Stop Loss: 46.95
Target(s): 52.25
Current Option Gain/Loss: Unopened
Time Frame: up to the early May earnings report.
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of CI have spent eight months building a base in the $40-47 range. Now the stock is bouncing from support at prior resistance. This looks like a new bullish entry point to buy calls. I want to see a little more confirmation.

Use a trigger at $48.75 as our entry. We'll start with a stop at $46.95. The $50.00 level is short-term resistance but we're aiming for $52.50. Aggressive traders could use the April calls, which expire in six trading days. I am suggesting the May calls. FYI: The Point & Figure chart for CI is bullish with a $60 target.

Trigger @ $48.75

- Suggested Positions -

buy the May $50 call (CI1219E50) current ask $0.94

Annotated Chart:

Weekly Chart:

Entry on April xx at $ xx.xx
Earnings Date 05/03/12 (confirmed)
Average Daily Volume = 3.0 million
Listed on April 12, 2012



In Play Updates and Reviews

Targets Hit

by James Brown

Click here to email James Brown

Editor's Note:

Both CAT and TSCO hit our upside targets today. We closed our JBHT ahead of earnings. OPEN was stopped out.

Current Portfolio:


CALL Play Updates

Allergan Inc. - AGN - close: 93.19 change: -0.12

Stop Loss: 92.25
Target(s): 99.50
Current Option Gain/Loss: Apr92.5c: -61.9% & Apr95c: -86.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/12 update: Warning! AGN failed to participate in the market's rebound today. That's a warning signal. We will plan to exit this position at the open tomorrow.

- Suggested Positions -

Long Apr $92.50 call (AGN1221D92.5) Entry $3.55

- or -

Long Apr $95 call (AGN1221D95) Entry $1.85

04/12/12 prepare to exit at the open tomorrow.
03/27/12 AGN hit our breakout trigger at $95.25
03/22/12 adjusted entry point strategy to include a buy-the-dip trigger at $90.50 and a breakout trigger at $95.25.
03/15/12 not open yet. New buy-the-dip trigger @ 92.25
03/14/12 not open yet. try again.

Entry on March 27 at $95.25
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on March 13, 2012


NetEase.com - NTES - close: 56.92 change: -0.63

Stop Loss: 54.45
Target(s): 64.00
Current Option Gain/Loss: Apr55c: -16.0% & Apr60c: - 64.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/12 update: It was a disappointing day for NTES. The bounce has reversed near the short-term trend of lower highs. The stock could be building a bull flag consolidation pattern but more conservative traders may want to exit early now anyway. I am not suggesting new positions at this time.

Earlier Comments:
Our multi-week target is $64.00. FYI: The Point & Figure chart for NTES is bullish with a $68 target.

- Suggested (Small) Positions -

Long Apr $55 call (NTES1221D55) Entry $2.80

- or -

Long Apr $60 call (NTES1221D60) Entry $0.70

03/26/12 sold half at the open.
exit bid on Apr. $55 call @ $0.00 (+67.8%)
exit bid on Apr. $60 call @ $1.95 (+178.5%)
03/24/12 new stop loss @ 54.45.
03/24/12 Prepare to sell half of our positions on Monday to lock in a gain.
Apr $55 call bid currently @ $5.20 (+85.7%)
Apr $60 call bid currently @ $1.95 (+178.5%)
03/22/12 readers may want to go ahead and take profits now
Apr $55 call (+50%), Apr $60 call (+100%)

Entry on March 20 at $56.11
Earnings Date 05/16/12 (unconfirmed)
Average Daily Volume = 584 thousand
Listed on March 19, 2012


O'Reilly Automotive - ORLY - close: 94.28 change: +0.46

Stop Loss: 89.45
Target(s): 98.50
Current Option Gain/Loss: Apr90c: +72.0% & May$90c: +44.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
04/12 update: ORLY inched higher on Thursday and seemed to struggle with the $94.40 level almost all day long. There is no change from my prior comments. More conservative traders may want to raise their stops toward Tuesday's low. I am not suggesting new positions at current levels.

Earlier Comments:
We have moved our target to $98.50 but more conservative traders may want to take profits near $95.00 instead. FYI: The Point & Figure chart for ORLY is bullish with a $103 target.

- Suggested Positions -

Long Apr $90 call (ORLY1221D90) Entry $2.50

- or -

Long May $90 call (ORLY1219E95) Entry $3.95

04/07/12 moved exit target to $98.50
04/03/12 new stop loss @ 89.45
03/26/12 triggered at $91.25

Entry on March 26 at $91.25
Earnings Date 04/25/12 (confirmed)
Average Daily Volume = 887 thousand
Listed on March 24, 2012


Ulta Salon, Cosmetics - ULTA - close: 94.73 change: +1.03

Stop Loss: 89.95
Target(s): 98.50
Current Option Gain/Loss: -27.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/12 update: Shares of ULTA delivered a +1% gain but shares remain under resistance near the $95.00 level. Today's move does help alleviate the very short-term down trend. Nimble traders could use a rally past $95.50 as a new bullish entry point.

Earlier Comments:
FYI: The Point & Figure chart for ULTA is bullish with a $110 target.

- Suggested Positions -

Long Apr $95 call (ULTA1221D95) Entry $1.65

04/03/12 adjusted target to $98.50
03/28/12 new stop loss @ 89.95
03/26/12 new stop loss @ 89.45
03/24/12 adjusted exit target to $97.50
03/21/12 ULTA hit our trigger at $91.25

Entry on March 21 at $91.25
Earnings Date 06/07/12 (unconfirmed)
Average Daily Volume = 759 thousand
Listed on March 20, 2012


PUT Play Updates

Apache Corp. - APA - close: 94.90 change: +2.09

Stop Loss: 97.65
Target(s): 92.00
Current Option Gain/Loss: Apr95.5p:+ 39.5% & May95p: +27.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/12 update: Ouch! APA took a nice chunk out of our unrealized gains with a +2.2% bounce today. More conservative traders may want to exit early now and lock in a gain. I am not suggesting new positions at this time.

- Suggested Positions -

Long Apr $97.50 PUT (APA1221P97.5) Entry $2.40

- or -

Long May $95 PUT (APA1219Q95) Entry $2.90

04/11/12 new stop loss @ 97.65, readers may want to take profits now with the options at +114.5% and +70.6%
04/10/12 new stop loss @ 98.50
04/09/12 new stop loss @ 99.00
04/07/12 reduced exit targets to just one at $92.00
04/07/12 new stop loss @ 100.25

Entry on March 29 at $98.32
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 2.7 million
Listed on March 28, 2012


BorgWarner - BWA - close: 83.68 change: +2.26

Stop Loss: 84.55
Target(s): 75.50
Current Option Gain/Loss: -76.0%
Time Frame: up to the April 26th earnings report
New Positions: see below

Comments:
04/12 update: Our BWA put play is in trouble. Shares outperformed today with a +2.7% bounce. There is still overhead resistance near $84.00 but BWA did rally past a few short-term resistance levels. I am not suggesting new positions at this time.

Earlier Comments:
We do want to keep our position size small. The most recent data listed short interest at 16% of the 107 million-share float. That does raise the risk of a short squeeze.

- Suggested (small) Positions -

Long Apr $80 PUT (BWA1221P80) Entry $1.25

04/10/12 triggered at $81.25

Entry on April 10 at $81.25
Earnings Date 04/26/12 (confirmed)
Average Daily Volume = 1.1 million
Listed on April 09, 2012


EQT Corp. - EQT - close: 46.60 change: +0.54

Stop Loss: 48.25
Target(s): 42.00-40.00
Current Option Gain/Loss: Unopened
Time Frame: up to its April 26th earnings report
New Positions: Yes, see below

Comments:
04/12 update: EQT opened higher and rose to a +1.1% gain but momentum was slowing this afternoon. The overall trend is still down. Nimble traders might want to consider bearish positions on a bounce near $48.00. Currently I am suggesting a trigger to buy puts at $45.70. Our target is the $42.00-40.00 zone. We'll use a stop at $48.25, just above today's high. FYI: The Point & Figure chart for EQT is bearish with a $36 target.

We want to exit prior to the April 26th earnings report.

Trigger @ 45.70

- Suggested Positions -

buy the Apr $45 PUT (EQT1221P45)

- or -

buy the May $45 PUT (EQT1219P45)

Entry on April xx at $ xx.xx
Earnings Date 04/26/12 (confirmed)
Average Daily Volume = 1.4 million
Listed on April 11, 2012


Freeport-McMoRan - FCX - close: 35.78 change: -0.53

Stop Loss: 38.25
Target(s): 31.50
Current Option Gain/Loss: Unopened
Time Frame: up to the April 18th earnings report
New Positions: Yes, see below

Comments:
04/12 update: The stock market's widespread bounce on Thursday had a big impact on FCX. Shares appeared to see a little short squeeze this morning and the stock surged to a +5.8% gain. FCX closed just under short-term resistance near $38.00. I don't see any changes from my prior comments.

Earlier Comments:
I do consider this a higher-risk trade because FCX tends to be volatile. Plus, we don't have a lot of time. FCX is due to report earnings on April 18th and we do not want to hold over the report.

I am suggesting small bearish positions if FCX trades at $35.65. Our target is $31.50.

Trigger @ $35.65 (small positions)

- Suggested Positions -

buy the Apr $35 PUT (FCX1221P35)

Entry on April xx at $ xx.xx
Earnings Date 04/18/12 (unconfirmed)
Average Daily Volume = 18.7 million
Listed on April 11, 2012


Ryder System, Inc. - R - close: 51.00 change: +0.60

Stop Loss: 52.05
Target(s): 45.50
Current Option Gain/Loss: Unopened
Time Frame: 2 to 3 weeks
New Positions: Yes, see below

Comments:
04/12 update: R's bounce today managed to push it up over its 200-dma. Yet the $51.00 level acted as overhead resistance. We're still waiting for a breakdown. I am suggesting a trigger to buy puts at $49.75 with a stop at $52.05. Our target is $45.50. We do not want to hold over the late April earnings report.

Trigger @ 49.75

- Suggested Positions -

buy the Apr $50 PUT (R1221P50)

Entry on April xx at $ xx.xx
Earnings Date 04/24/12 (unconfirmed)
Average Daily Volume = 567 thousand
Listed on April 10, 2012


Timken Co. - TKR - close: 50.20 change: +1.55

Stop Loss: 51.55
Target(s): 45.50
Current Option Gain/Loss: -52.6%
Time Frame: up to its late April earnings report
New Positions: see below

Comments:
04/12 update: Bears were on the defensive today and TKR produced a +3.1% bounce. Shares did stall near the top of the gap down an just above its 10-dma. I would look for a drop back under $49.75 as a new bearish entry point.

Earlier Comments:
Our target is $45.50 although we need to keep a careful eye on possible technical support at the 100-dma, exponential 200-dma, and the 300-dma all near the $46 area. Keep position size small.

- Suggested (small) Positions -

Long Apr $50 PUT (TKR1221P50) Entry $1.90

04/10/12 triggered at $48.90

Entry on April 10 at $48.90
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 846 thousand
Listed on April 09, 2012


Weight Watchers Intl. - WTW - close: 74.23 change: -0.72

Stop Loss: 78.25
Target(s): 70.50
Current Option Gain/Loss: + 2.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/12 update: Good news! WTW did not participate in the market's rally today. The early morning spike higher reversed and shares closed near their lows. More conservative traders might want to lower their stops.

Earlier Comments:
The plan was to keep our position size small to limit our risk. I want to warn you that WTW could be prone to short squeezes with short interest at 18.5% of the small 35 million-share float.

- Suggested (small) Positions -

Long Apr $75 PUT (WTW1221P75) Entry $2.05

04/10/12 new stop loss @ 78.25.
04/09/12 WTW gapped open lower at $73.99

Entry on April 09 at $73.99
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on April 07, 2012


CLOSED BULLISH PLAYS

Caterpillar - CAT - close: 106.44 change: +4.69

Stop Loss: 99.70
Target(s): 104.50
Current Option Gain/Loss: +77.6%
Time Frame: 1 to 2 weeks
New Positions: see below

Comments:
04/12 update: Target achieved.

Shares of CAT surged higher this morning and the stock ended the day up +4.6%. Our short-term exit target was hit at $104.50.

Earlier Comments:
This is an aggressive trade. The plan was to use small positions to limit our risk.

- Suggested (small) Positions -

Apr $105 call (CAT1221D105) Entry $0.94 exit $1.67 (+77.6%)

04/12/12 target hit
04/11/12 trade opened. CAT opened at $101.77

chart:

Entry on April 11 at $101.77
Earnings Date 04/25/12 (confirmed)
Average Daily Volume = 6.3 million
Listed on April 10, 2012


J.B.Hunt Transport - JBHT - close: 55.84 change: +1.34

Stop Loss: 53.75
Target(s): 59.50
Current Option Gain/Loss: Apr55c: + 7.4% & May$55c: +10.0%
Time Frame: exit prior to earnings on April 12th
New Positions: see below

Comments:
04/12 update: JBHT rallied sharply (+2.4%) ahead of its earnings report this evening. The stock climbed toward its recent highs. Our plan was to exit at the closing bell today to avoid holding over earnings.

- Suggested Positions -

Apr $55 call (JBHT1221D55) Entry $1.35 exit $1.40 (+ 7.4%)

- or -

May $55 call (JBHT1219E55) Entry $2.00 exit $2.20 (+10.0%)

04/12/12 planned exit at the close
04/10/12 if the trade is still open, prepare to exit on Thursday at the close

chart:

Entry on March xx at $ xx.xx
Earnings Date 04/12/12 (confirmed)
Average Daily Volume = 729 thousand
Listed on March 28, 2012


Tractor Supply - TSCO - close: 97.95 change: +5.65

Stop Loss: 89.80
Target(s): 98.00
Current Option Gain/Loss: Aprl95c: +142.8% & May95c: +73.7%
Time Frame: up to the mid April earnings report
New Positions: see below

Comments:
04/12 update: Thanks to the warm weather TSCO raised its earnings guidance this morning. The stock gapped open higher and shot to $98.78 intraday. Our exit target was hit at $98.00.

- Suggested Positions -

Apr $95 call (TSCO1221D95) Entry $1.40 exit $3.40 (+142.8%)

- or -

May $95 call (TSCO1219E95) Entry $3.05 exit $5.30 (+73.7%)

04/12/12 target hit
04/05/12 triggered at $93.25

chart:

Entry on April 05 at $93.25
Earnings Date 04/18/12 (unconfirmed)
Average Daily Volume = 578 thousand
Listed on April 03, 2012


CLOSED BEARISH PLAYS

OpenTable, Inc. - OPEN - close: 42.11 change: +1.85

Stop Loss: 42.05
Target(s): 33.00
Current Option Gain/Loss: Apr40p -77.2% & May35p: -35.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
04/12 update: We have been worried about OPEN for a few days now. The slow sink lower was not very convincing. Shares shot higher today with a +4.5% gain. Our stop loss was hit at $42.05.

Earlier Comments:
Remember, this is a higher-risk trade. Short interest on OPEN is already at 51% of the small 18.3 million share float. The stock could be prone to short squeezes. Plus, there was some speculation last week that OPEN could be a buy-out target for someone looking for exposure to the online restaurant reservation market. Rumors that OPEN could be a takeover target could always spark a short squeeze.

(small positions) - Suggested Positions -

Apr $40 put (OPEN1221P40) Entry $2.20 exit $0.50 (-77.2%)

- or -

May $35 PUT (OPEN1219Q35) Entry $1.70 exit $1.10 (-35.2%)

04/12/12 stopped out at $42.05
04/10/12 new stop loss @ 42.05
04/02/12 triggered at $39.65

chart:

Entry on April 02 at $39.65
Earnings Date 05/01/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on March 24, 2012