Option Investor
Newsletter

Daily Newsletter, Thursday, 2/14/2013

Table of Contents

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

Market Wrap

Global GDP Not Good?

by Thomas Hughes

Click here to email Thomas Hughes
Global GDP reports were a little worse than expected. The rear looking view faded from the spotlight in favor of future expectations.

Introduction

Today brought a variety of tidbits for the market to digest. Economic growth, earnings, mergers and acquisitions all had their turn on stage. Rear looking GDP figures from two of the worlds leading economies revealed the measure of what we were all expecting; economic shrinkage in the fourth quarter. The surprising amount of weakness from Japan and the Eurozone was a brief concern but quickly left the spotlight. This concern faded quickly to talk of the future expectations and new M&A activity.


U.S. economic data was very light today and revealed nothing new. The labor market is still relatively stable but some of the data continues experience volatile swings. All the talk of weakness and what to expect from the future helped keep oil and gold traders in balance. Both commodities had some intra-day volatility but flattened out before closing. All in all it was a fairly quiet day of trading. The S&P opened slightly lower and traded in a narrow 9 point range all day.

The mergers and acquisitions scene is still simmering and produced two new big deals today. Berkshire Hathaway announced a deal with 3G to purchase the number one selling ketchup brand Heinz. The deal is worth $28 billion and puts Warren Buffet in ownership of the world's top brand of the most used condiment after salt and pepper. Another big merger was that of US Air and American Airlines to form the largest U.S. air carrier by passenger miles. Pundits seem to think its a good move but with the decades of corporate shuffling the airlines have gone through I'll reserve judgment on that for a while.

The Economic Data

U.S. data was limited to unemployment claims today. Don't worry though, next week starts to heat up again with a full roster of reports. Today initial claims were reported to have dropped 27,000 to 341,000. This is from a mild upward revision of 2,000 from last weeks figures. The four week moving average was also revised up by a small amount and gained a little this week too. This weeks figures are a nice drop from the last two weeks but is still within the expected range. There is still no sign of a real improvement in labor markets here. Later in the day Goldman Sachs released forecasts predicting that housing related employment was going to pick up soon. This could help reverse labor market trends if it actually happens.


Continuing claims is a little different story. This number dropped by a much larger margin and set a new low. That is good news but this number has been the most volatile of the three important claims figures. Next week it could jump right back up. Taking this into consideration it still appears like there improvement here but it could be bottoming out just over 3.1 million. Signs of improvement here are only hints and could easily disappear as we approach the time of expected spring and Easter volatility in employment figures.


The total claims number is the one that causes me some concern. This figure has been trending up over the last few months despite steady to lower numbers of initial and continuing claims. Total claims jumped more than 325,000 to match a high set two weeks ago. This rise in total claims led us to a slight increase in the unemployment figure for January and it could do it again this month. Until the total claims trends down again I think unemployment is going to keep edging up. States with the biggest drop in claims included NC, TN and AL. States with the biggest increases were CA, TX and NY. One thing I have noticed is that the top states in both categories appear here each week but usually flip flop. Last week NC (my own home state) topped the list for increases, this week it tops the list for decreases. Until this changes on a state level the national figures will probably continue to show some volatility as well. Once the country as a whole can increase jobs in concert with each other we will start seeing a drop in unemployment levels.


Japan GDP Turns Negative

Asian markets, including Japan, closed in the green despite a surprise drop in Japanese GDP. No one was expecting robust growth but modest expectations of 0.1% were not met. The Japanese economy shrank by -0.1% but it wasn't this pseudo shocking piece of data that investors focused on. It was the future outlook. Shinzo Abe's plans to stimulate the economy through fiscal policy, yen printing and government spending seems to be working. More forward looking views of the economy are pointing to a rebound in the first quarter. Machinery orders are on the rise and so is the services sector. These signs are making investors think the stimulus is working and the GDP figure will likely reinforce plans by the government to keep it up. The fact that does appear to be working what is spurring the talk of currency war. If it works for one country why can't it work for another. According to G7 statements we don't have that to worry about though.

The dropped versus the dollar today after the news from Japan, but not as much as I might have expected. The USD/JPY currency pair is within a short term range and above another near term support line. Weakness over the last three days is helping to alleviate some of the previous overbought condition and setting the pair up for another momentum driven move. Expectations of continued aggressive easing from the bank could give this trade legs for another move up. The 92-94.50 range will be important to watch, a break above the range could keep the yen sliding.

USD/JPY

Europe Recedes Again

The European Union has receded again. The pullback was a little larger than expected but the pullback itself was fully in line with expectation. The EU GDP fell by -0.8% versus the expected -0.6% and marked the fourth quarter of negative growth. Germany was the surprise of the bunch, dropping a sharp -0.6%, far below expectations. France was another area of weakness, dropping -0.1% in the fourth quarter. France also received some negative revisions that put it in recessionary territory at the beginning of last year. This data was also brushed aside in favor of the forward looking perspective. There is still expected to be some shrinkage in the current quarter but there is also expected to signs of improvement as well. Economist expect Germany, for one, will experience a quick comeback. The pillar of the EU is expected to rebound by +0.3% in the first quarter and continue expanding into the second half. Another article cited “noticeable economic growth” in Germany for the quarter.

The Euro responded by dropping sharply versus the dollar. The EUR/USD pair fell back from resistance on the news and dropped below the short term moving average in a continuation of last weeks down leg. Technical indicators support potential short term weakness. Bearish MACD is increasing and stochastic is pointing down. The pair is still in an uptrend with trend line support around 1.3250. Underlying fundamentals of international monetary policy are not changing at the moment. I am maintaining a longer term bullish outlook on this pair unless there is significant breakdown of support.

Eur/USD

The Gold Index

Gold had a volatile day today following the releases of EU and Japanese GDP. The metal has been trading near the lower end of its 2 month range and settled down by $10 today. The charts are looking weak here, a drop for gold below $1627-$1630 could have longer term implications. The Gold Index traded to the upside today but remained below it long term down trend line. The index is entering a narrowing range bound on both sides by long term support/resistance. The technical indicators are weak and are giving me no hints of a bottom. A drop below $165 could take the index all the way down to $150.

The Gold Index

Oil And The Oil Index

Oil traded in a tight range today, closing near flat and just under $97.50. Oil is trading near the top of its two week range and 5 month highs. Expectations of a return to growth are fueling some speculation in the markets. If data continues to support the idea that the economy is stable and has growth prospects in the coming quarter oil could move up. A break above $98 could send oil up to $100. The oil index has retreated since making its 12 month high a few weeks ago. This move down closed the gap it formed when crossing a long term resistance level. This closure is good, especially since the index is maintaining the upper side of that resistance level at closing. A confirmed move from 1350 has a target of 1400.

Oil Index

Earnings, Mergers and Acquisitions

Earnings season is nearly over but there are still quite a few left. Today there were about 150 reports with two notable ones. GM missed its expectations on losses in Europe and other charges. The up takes on the report were positive earnings for the third running and strengthening U.S. markets. Net income for the quarter rose to near $1.2 billion, up about 40% from last year. European losses are blamed in part on consumers who are waiting to buy because of political uncertainty. This uncertainty will eventually lead to pent up demand in EU countries that could accelerate the economic growth currently expected for later this year. Automakers in general are having a hard time in the region and are not expecting rapid change. The stock dropped sharply on the news but halted at a long term support. MACD and stochastic are confirming support at this time but caution is still in order here. Today's candle is pretty strong and could lead to further testing of the $27.50 level.

GM

Pepsico beat earnings estimates on price hikes enacted in the quarter but guidance missed. Net income for the quarter is $1.66 billion on revenue of $19.9 billion. The positive pass through of prices is good for Pepsi and should help with future earnings growth. However, the guidance for the next year fell short of the expectations and sent the stock on a roller coaster ride. The expected 2013 EPS guidance of $4.49 only missed by a few pennies which should be easy to beat, especially is the economy does pick up. A nice little doji pattern formed today engulfing the previous black candle and piercing long term resistance. A break above $92.50 could take it up to $95, the intra-day high preceding the 2008 crash. Continued economic signs of strength could help lift Pepsico over this resistance. A failure could have the long term bearish implications of a double top matching the highs in August 2012 with the recent high.

Pepsico

American Airlines parent AMR and US Airways announced a merger deal that will create the largest U.S. based air carrier. The deal is worth $11 billion in stock and is supposed to reduce costs and increase efficiency. The deal has several obstacles such as a bankruptcy filing by AMR and others. Shares of US Airways crashed in today's trading, losing more than 10%. The move brings the stock down to a potential support and has a lot of volume behind it. It is also confirming a short term triple top. The $13.00 level could prove to be a consolidation level. It will have to be watched for sign of support or weakness. The longer term 150 day EMA is just below $13 and is the next target of support should $13 fail.

LCC

The last big nugget of M&A news was the announced purchase of HJ Heinz by Berkshire Hathaway and 3G. The deal was announced for $72.50 per share and totals $28 billion. The price is a 20% premium on the previous day's closing and provided a hefty profit to investors and traders. At one point during the day one of the Najarian brothers pointed out some questionable options activity. Whether anything is amiss is yet to be determined.

HJ Heinz

The Indexes

Futures were only mildly in the negative this morning which was a little surprising with the negative GDP figures. But, as I pointed out, more attention was paid to the forward looking statements. Expectations for improvement from this level, even if that improvement is just a better negative number, suggests there is hope and belief we are at the bottom of an economic trough. If so then the rising tide of world economic growth could continue to lift the S&P higher. At this time the S&P is in yet another critical juncture.

Last week the index crawled above the consolidation range between 1500-1515. This move came late in the week, Friday, which is a good sign for bullish sentiment. This week the index was able to hold that level but was capped at another long term resistance. This is the resistance of the intra-day, not closing, high of 12/11/2007. This is the intra-day high of the right shoulder of the H&S reversal pattern preceding the 2008 bear market. I don't think this resistance will be too heavy but it could intensify as we the index approaches the all time highs. Anyone still holding positions from that period, especially index funds, etfs and etc could be eying this as a time to get out of the market.

SPX 30 Minute Bars

A move above this point will take the S&P to 1550 and a hairsbreadth away from the all time highs around 1565. Technical indicators on the daily charts are a little mixed but this in not unusual with a market in consolidation. Longer term indicators are firmly bullish and suggest a rising market. On the daily chart the MACD is diverging from the trend, showing a weakening trend, but are not indicating a reversal yet. Another pop of bullish momentum could be all it takes to break above the current resistance.

SPX Daily Bars

The VIX is still near five year lows. Today decline brought it down to what could possibly be a support area. If the outlook for global economic strength keeps brightening fear could completely leave the market and drop the VIX down to 2010 levels just under $10. This may coincide with or lead the final push for the S&P 500 to hit the 1565 level.

VIX

Next week starts another round of economic releases. Early in the week the FOMC minutes will be released and scoured for hints into the state of the economy and what the Fed might do in the near future. There will also be housing data, the PPI, CPI, Leading Indicators and the usual weekly fare. Tomorrow is on the light side; industrial production, capacity utilization and Michigan sentiment. Earnings begin to lighten up as well. There are only about 45 releases scheduled including Campbells Soup and Smuckers.

The trend is still up and there is yet to be signs of a top. Until that happens I have to stick with the trend.

Thomas Hughes


New Option Plays

Huge Backlog of Orders

by James Brown

Click here to email James Brown


NEW DIRECTIONAL CALL PLAYS

Cameron Intl. - CAM - close: 65.49 change: +1.33

Stop Loss: 64.75
Target(s): 69.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
CAM is in the oil and gas equipment business. The company reported earnings on January 31st. They missed estimates by a penny and management actually guided Q1 earnings lower. That should have sent the stock plunging. Yet instead shares of CAM surged. The company reported strong new orders and the backlog of business has ballooned to $8.5 billion.

CAM has spent the last two weeks digesting gains and consolidating sideways in the $64-66 zone. I am suggesting a trigger to buy calls at $66.25. If triggered our short-term target is $69.75. More aggressive traders could definitely aim higher.

Trigger @ 66.25

- Suggested Positions -

buy the MAR $65 call (CAM1316c65) current ask $2.20

Annotated Chart:

Entry on February -- at $---.--
Average Daily Volume = 3.0 million
Listed on February 14, 2012



In Play Updates and Reviews

Stocks Shrug Off EU GDP Numbers

by James Brown

Click here to email James Brown

Editor's Note:

The U.S. market shrugged off bearish economic data out of the EU and continued to inch higher.

Momentum does seem to be slowing and we did see a few stocks pullback today.

We closed our SBUX trade at the open this morning.


Current Portfolio:


CALL Play Updates

AMC Networks Inc. - AMCX - close: 59.44 change: -0.32

Stop Loss: 57.90
Target(s): 64.75
Current Option Gain/Loss: Unopened
Time Frame: Exit prior to earnings on Feb. 26th
New Positions: Yes, see below

Comments:
02/14/13: AMCX spent Valentines day flirting with resistance at the $60.00 level. We are waiting for a breakout higher. I am suggesting a trigger to buy calls at $60.25. More conservative traders may want to wait for a rally past $61.00 before initiating positions because twice in January AMCX found resistance near the $61.00 level.

Please note this is a short-term trade. We do not want to hold over the company's earnings report on Feb. 26th. FYI: The Point & Figure chart for AMCX is bullish with an $86 target.

Trigger @ 60.25

- Suggested Positions -

buy the Mar $60 call (AMCX1316c60)

Entry on February -- at $---.--
Average Daily Volume = 486 thousand
Listed on February 13, 2012


BP Prudhoe Bay Royalty Trust - BPT - close: 80.68 change: +0.09

Stop Loss: 78.25
Target(s): 87.50
Current Option Gain/Loss: -17.5%
Time Frame: Exit prior to earnings in early March
New Positions: see below

Comments:
02/14/13: BPT gapped open lower this morning but managed to march its way back to positive territory. The call option never fully recovered and declined on the session. I would still consider new bullish positions in BPT with the stock above $80.00.

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

*Small Positions* - Suggested Positions -

Long Mar $80 call (BPT1316c80) entry $2.00

Entry on February 13 at $80.25
Average Daily Volume = 131 thousand
Listed on February 07, 2012


Check Point Software Tech. - CHKP - close: 51.27 change: -0.16

Stop Loss: 49.90
Target(s): 54.50
Current Option Gain/Loss: + 2.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/14/13: CHKP also spiked down at the open today but shares found support at the $51.00 level. Unfortunately the stock didn't see much of a bounce. I am not suggesting new positions at this time.

*Small Positions* - Suggested Positions -

Long Mar $50 call (CHKP1316c50) entry $1.90

02/13/13 new stop loss @ 49.90
02/06/13 new stop loss @ 49.40

Entry on February 01 at $50.25
Average Daily Volume = 2.7 million
Listed on January 31, 2012


The Cooper Companies - COO - close: 103.79 change: -0.46

Stop Loss: 99.90
Target(s): 107.50
Current Option Gain/Loss: + 0.0%
Time Frame: Exit prior to earnings on Mar. 7th
New Positions: see below

Comments:
02/14/13: COO is down two days in a row. Granted the pullback so far has been very mild but shares are still showing relative weakness versus the S&P 500. Odds are growing we'll see COO dip toward its 10-dma or the $102.50-102.00 area.

Earlier Comments:
Please note that we do want to keep our position size small because the option spreads are a little bit wide. COO is scheduled to report earnings on March 7th. We do not want to hold over the report. FYI: The Point & Figure chart for COO is bullish with a $125 target.

*Small Positions* - Suggested Positions -

Long Mar $105 call (COO1316c105) entry $2.70

Entry on February 06 at $102.60
Average Daily Volume = 303 thousand
Listed on February 02, 2012


The Home Depot - HD - close: 67.34 change: -0.11

Stop Loss: 65.80
Target(s): 69.90
Current Option Gain/Loss: -15.1%
Time Frame: Exit prior to earnings on Feb. 26th
New Positions: see below

Comments:
02/14/13: HD spent Thursday's session consolidating sideways. I would still consider new positions here but readers may want to start with a smaller position size to limit risk.

Earlier Comments:
We plan to exit prior to the company's earnings report on Feb. 26th.

- Suggested Positions -

Long Mar $70 call (HD1316c70) entry $0.66

Entry on February 13 at $67.52
Average Daily Volume = 5.9 million
Listed on February 12, 2012


Lumber Liquidators - LL - close: 63.96 change: +1.02

Stop Loss: 59.45
Target(s): 64.85
Current Option Gain/Loss: +58.0%
Time Frame: Exit PRIOR to earnings on Feb. 20th
New Positions: see below

Comments:
02/14/13: The relative strength in LL continues with a +1.6% gain today. The stock is up several days in a row and growing overbought. Readers may want to seriously consider taking profits early right now. I am adjusting our exit target down to $64.85. More aggressive traders could aim higher.

Earlier Comments:
We do not want to hold over the Feb. 20th earnings report. Shares could see a short squeeze. The most recent data listed short interest at 22% of the very small 23.9 million share float. FYI: The P&F chart is bullish with a $74 target.

- Suggested Positions -

Long Mar $65 call (LL1316c65) entry $1.55

02/14/13 adjust exit down to $64.85
02/13/13 new stop loss @ 59.45

Entry on February 12 at $61.36
Average Daily Volume = 568 thousand
Listed on February 11, 2012


Mohawk Industries - MHK - close: 107.05 change: -0.52

Stop Loss: 101.85
Target(s): 109.75
Current Option Gain/Loss: +17.8%
Time Frame: Exit PRIOR to earnings on Feb. 21st
New Positions: Yes, see below

Comments:
02/14/13: Uh-oh! Did shares of MHK just peak? The stock spiked higher to $108.80 this morning but failed to hold these gains and closed in negative territory. Was today's move a failed rally under the $110 level? Odds are good we could see MHK dip to and retest the $105.00 level as new support. More conservative traders may want to raise their stops.

Earlier Comments:
We do not want to hold over the Feb. 21st earnings report.

- Suggested Positions -

Long Mar $105 call (MHK1316c105) entry $3.65

Entry on February 12 at $105.35
Average Daily Volume = 588 thousand
Listed on February 11, 2012


3M Company - MMM - close: 102.78 change: -0.08

Stop Loss: 100.70
Target(s): 106.50
Current Option Gain/Loss: +16.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/14/13: MMM's rally is starting to look a little tired. Shares dipped to short-term technical support at the rising 10-dma this morning. Traders did buy the dip but MMM still closed negative for the session.

Earlier Comments:
I am suggesting we keep our position size small to limit our risk.

- Suggested Positions -

long Mar $100 call (MMM1316c100) entry $2.95

Entry on February 06 at $102.25
Average Daily Volume = 3.0 million
Listed on February 05, 2012


Rock-Tenn Company - RKT - close: 82.94 change: +0.52

Stop Loss: 79.45
Target(s): 84.85
Current Option Gain/Loss: +18.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/14/13: RKT continues to show relative strength. Traders bought the dip twice today at the $82.00 level and RKT rebounded to a new high. There is no change from my prior comments. We are aiming for $84.85. More aggressive traders could aim higher.

Earlier Comments:
FYI: The Point & Figure chart for RKT is bullish with a long-term $117 target.

- Suggested Positions -

Long Mar $80 call (RKT1316c80) entry $3.05

Entry on February 06 at $81.05
Average Daily Volume = 743 thousand
Listed on February 02, 2012


CBOE Volatility Index - VIX - close: 12.66 change: -0.32

Stop Loss: 11.45
Target(s): 22.00-25.00 range
Current Option Gain/Loss: -18.4%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
02/14/13: The VIX failed at its 30-dma this morning. That's the third time this morning that the VIX's bounce has reversed at its 30-dma. The index looks poised to test its lows from mid January near the 12.30 level.

Traders may want to consider alternative entry points. You could wait for a dip to 12.30 or better yet buy a bounce off the 12.30 level. One idea would be to wait for the S&P 500 index to close below its simple 10-dma again and then buy puts on the VIX.

- Suggested Positions -

Long Apr $16 call (VIX1317D16) entry $1.90

Entry on February -- at $---.--
Average Daily Volume = n/a
Listed on February 09, 2012


WESCO Intl. Inc. - WCC - close: 75.92 change: +0.41

Stop Loss: 73.25
Target(s): 79.75
Current Option Gain/Loss: + 2.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/14/13: WCC saw a small spike lower at the open but shares quickly bounced off the $75.00 level and set a new multi-year closing high. I would still consider new positions now at current levels.

Earlier Comments:
The breakout past resistance could also spark some short covering. The most recent data listed short interest at 20% of the 41 million-share float.

- Suggested Positions -

Long Mar $75 call (WCC1316c75) entry $2.40

Entry on February 14 at $75.06
Average Daily Volume = 918 thousand
Listed on February 13, 2012


Zimmer Holdings - ZMH - close: 76.34 change: +0.34

Stop Loss: 73.40
Target(s): 79.50
Current Option Gain/Loss: +28.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/14/13: ZMH continues to show relative strength with a +0.4% gain. The stock also closed above resistance at the $76.00 level, which is a bullish sign.

Earlier Comments:
I am suggesting we keep our position size small to limit our risk. FYI: The Point & Figure chart for ZMH is bullish with a long-term $89 target.

- Suggested Positions - *small positions*

Long Mar $75 call (ZMH1316c75) entry $1.60

02/09/13 new stop loss @ 73.40

Entry on February 07 at $75.24
Average Daily Volume = 1.2 million
Listed on February 06, 2012


PUT Play Updates

EV Energy Partners - EVEP - close: 55.18 change: -0.38

Stop Loss: 57.25
Target(s): 50.50
Current Option Gain/Loss: -17.8%
Time Frame: exit prior to earnings on Feb. 27
New Positions: see below

Comments:
02/14/13: It looks like EVEP's bounce is running out of steam. Shares underperformed the market with a -0.6% decline. I would wait for a new drop below $54.75 before initiating new bearish positions.

- Suggested Positions -

Long Mar $55 put (EVEP1316o55) entry $3.65

Entry on February 11 at $54.75
Average Daily Volume = 300 thousand
Listed on February 09, 2012


Blue Nile Inc. - NILE - close: 30.30 change: -0.67

Stop Loss: 32.15
Target(s): 27.00
Current Option Gain/Loss: -51.3%
Time Frame: To be determined (see below)
New Positions: see below

Comments:
02/14/13: Shares of NILE were downgraded today but that didn't stop shares from another oversold bounce. The stock really outperformed the market with a +3.3% rebound. Shares have not yet broken the short-term bearish trend of lower highs or tested what should be resistance at the $32.00 level. While the stock might rollover soon more conservative traders may want to abandon ship and exit early now.

Earlier Comments:
We want to keep our position size small to limit our risk.

*Small Positions* - Suggested Positions -

Long Mar $30 PUT (NILE1316o30) entry $1.85

02/13/13 new stop loss @ 32.15
02/11/13 more conservative traders will want to exit prior to the earnings announcement tomorrow after the closing bell. We have decided to hold the position over the report. Please note our new stop loss at $33.05 and our target at $27.00.

Entry on February 07 at $31.45
Average Daily Volume = 319 thousand
Listed on February 06, 2012


SBA Communications - SBAC - close: 67.45 change: -0.82

Stop Loss: 70.05
Target(s): 63.50
Current Option Gain/Loss: - 8.3%
Time Frame: Exit prior to earnings on Feb. 21
New Positions: see below

Comments:
02/14/13: SBAC did not cooperate with us today. The stock spiked down to a new relative low this morning and then immediately bounced. Shares rallied to a +0.9% gain and almost created a bullish reversal signal. We can watch for short-term technical resistance at its simple 10-dma.

Earlier Comments:
Our target is $63.50 although more conservative traders may want to exit near $65.00. Bear in mind that we will exit before the company's earnings report on Feb. 21st if SBAC has not hit our exit by then.

- Suggested Positions -

Long Mar $65 PUT (SBAC1316o65) entry $0.60

Entry on February 13 at $68.21
Average Daily Volume = 131 thousand
Listed on February 12, 2012


CLOSED BULLISH PLAYS

Starbucks Corp. - SBUX - close: 55.55 change: -0.28

Stop Loss: 54.75
Target(s): 59.85
Current Option Gain/Loss: - 43.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/14/13: We have been growing concerned with SBUX's performance. Last night we decided to exit positions at the open this morning. Shares of SBUX did not cooperate and the stock gapped open lower at $55.53. The option opened down as well.

- Suggested Positions -

Mar $55 call (SBUX1316c55) entry $2.51 exit $1.43 (-43.0%)

02/14/13 closed at the opening bell today
02/13/13 SBUX is not performing. We want to exit early tomorrow morning

chart:

Entry on February 01 at $56.57
Average Daily Volume = 6.8 million
Listed on January 30, 2012