Option Investor
Newsletter

Daily Newsletter, Tuesday, 9/24/2013

Table of Contents

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

Market Wrap

Filibuster = Market Buster

by Jim Brown

Click here to email Jim Brown

The market fought back from an opening decline only to be slammed at the close on news of a Senate filibuster in progress.

Market Statistics

While it is not actually a filibuster Senator Ted Cruz has vowed to talk until he is no longer able to stand in an effort to try and convert enough Senate votes to pass the current budget bill and defund Obamacare. Cruz has taken on an impossible mission in trying to prevent the bill from coming up for debate. He believes once it is opened for debate that Harry Reid will strip out the language to defund Obamacare and then try to get it passed on a simple majority vote where only 51 senators would have to approve it.

Even though he has little chance of winning the argument about bringing the bill to the floor Cruz is hoping to use the long winded speech to try and convert a handful of senators to his side before the actual vote on the passage of the bill later. Several high profile republican senators have already said they would not vote with Cruz on the first effort. However, if Cruz is successful in swaying just 2-3 democrats the final outcome could be a lot different. There are 54 democrats including 2 independents that normally vote and caucus with the democrats and 46 republicans. Cruz would have to convert 4 of the democrats and maintain all 46 of the republicans to avoid a loss in the case of a simple majority vote. Cruz can prevail whenever the rules call for a super majority of 60 votes to pass a bill. Some analysts believe he could win a rules vote during the process. Cruz was joined in the marathon speech by Mike Lee, Rand Paul and David Vitter. With four of them in rotation they could talk for a long time but their time limit is noon on Wednesday.

The market plunged at the close because the stakes are rising in the Washington political battle. The more contentious it becomes the greater the chance of a government shutdown. Even if the budget battle ends the debt ceiling battle is right behind it and that promises to be even more contentious. Investors may be starting to realize that this could get ugly. The "everything will work out" mindset may be starting to crack. Clearly anyone who understands politics knows that 3-4 weeks from now the budget resolution will be passed and the debt ceiling will have been raised or even eliminated for 2014. It is how we get from here to there that is unnerving investors.

Other than the headlines from Washington it was a relatively quiet day. Economics disappointed again but that should not be a surprise.

The Richmond Fed Manufacturing Survey for September declined from +14 to zero and the internals were not good. Nearly every component decreased significantly. New orders declined from +16 to +5, Backorders fell from -6 to -7 and the average workweek declined from +8 to -4. The gap between orders and inventories fell from +3 to -6. Employment declined from +6 to -6 and the lowest level since late 2009. This was a very negative report.

However, the Richmond Manufacturing survey has been very volatile in recent months. It is hard to draw any material conclusions until the data breaks out of the recent range. What the survey does illustrate is the lack of a sustained recovery. Orders are fluctuating wildly and growth is nonexistent.

The headline on the corresponding Richmond Services Survey rose only +1 point from 14 to 15. If you exclude retail services the number declined from 19 to 16. Retail employment rose from -10 to +5 so that is a step in the right direction. However, expected services demand over the next six-months declined from 19 to 16. The employment index did rise from +1 to +7 and the highest level in a year.


Consumer Confidence declined to 79.7 from 81.8 amid calls by analysts for a relatively weak holiday season and the growing concern over Washington headlines. Shoppers said they were less excited about the future as the number of full time jobs declines and part time jobs increase. Families are worried about decreasing incomes and the higher cost of medical insurance. Declining gasoline prices and higher home prices were unable to support confidence.

The present conditions component rose slightly from 70.9 to 73.2. However, the expectations component declined from 89.0 to 84.1. Those respondents that felt jobs were harder to get rose +2.5% to 19.7%. Those consumers that believe their income will be flat or shrink over the next six months rocketed from 72.5% to 84.6%.


Two different home price indexes showed prices rose again and according to FHFA they are up +8.8% over the last 12 months. The Case Shiller indexes showed a +12.3% gain in the 10-city composite. No real surprise here.

The calendar for the rest of the week has several reports of note but the GDP and Kansas Fed Manufacturing Survey are the biggest. The GDP is expected to decline slightly in the latest revision. The Kansas Manufacturing Survey has risen for the last two months on the strength of auto manufacturing and it should continue.


Facebook (FB) bucked the market decline with a +2.7% gain to a new historic high. The power behind the move was an upgrade to buy from neutral by Citigroup and the hike in their price target from $32 to $55.

Another plus was news that Facebook, Twitter and other banned social media websites would be allowed and accessible in a planned free trade zone in Shanghai. China heavily censors the Internet and bans sites deemed inappropriate or politically sensitive. This would be a major concession by China. The country also said they would welcome bids from foreign telecom firms for licenses to provide Internet services in the zone.

China blocked Facebook and Twitter in 2009 after the riots in the Xinjiang province where the government said they were fueled by posts on social network sites. The New York Times was blocked last year after saying that Premier Wen Jiabao had amassed a fortune while premier.

The concept behind allowing access in the free trade zone was to allow foreigners who use those services to feel at home in Shanghai. The government wants them to feel like China is an open and bustling economy. Good luck with that.


Applied Materials (AMAT) announced it was buying Tokyo Electron in an all stock transaction for $9.39 billion. The merger will combine the number 1 and 3 companies in the semiconductor equipment market. The number 2 company is ASML Holding (ASML). The merger will create a $29 billion company that could scale into the next big upgrade in chip technology. Analysts say the combined companies could speed the new innovations necessary to make that next leap in technology. Combined revenue over the last twelve months was $12.6 billion of which $7.2 billion was AMAT. The merged company will launch a $3 billion stock buyback to be executed within 12 months of the deal closing. Normally stock in the acquiring company declines on an acquisition announcement. Today AMAT shares spiked +9% on the deal because it is so complimentary.


Cypress Semiconductor (CY) was not so lucky today. The company warned for the next two quarters citing weakness in phone sales, mobile computing and Asian markets. The Q3 earnings forecast was cut to a range of 10-12 cents compared to prior guidance of 17-18 cents. Revenue was cut to a range of $184-$187 million from $201-$207 million. It was even worse for Q4. The company projected revenue of $164-$170 million and well below estimates of $203 million.

The CFO said Asian mobile handset orders were being delayed or reduced to account for slowing sales and rising inventory levels. Shares of Cypress fell -15% on the news and given the severity of the warning there may be more pain ahead.


Barclays downgraded EMC (EMC) and NetApp (NTAP) to neutral saying the share prices were approaching their price targets. The company said new product cycles were behind them and there were fewer incremental catalysts over the next several quarters to warrant multiple expansion. Both EMC and NTAP declined about -1%.

Clovis Oncology (CLVS) fell -$9 after the close after being unable to find a buyer. The developer of cancer treatments put itself up for sale and nobody showed up with an offer. The company said it contacted some potential suitors but found no buyers. Clovis said it is no longer soliciting bids and is considering alternatives. Shares of Clovis more than doubled in price in June amid takeover speculation. The company has several major drugs in initial trials but according to Clovis "they could still fail" so buyer interest is muted until there is an actual product. Clovis has no drugs in production and no revenue. That makes it a tough sale.


Linkedin (LNKD) rallied +6.24 to $246 after Evercore Partners raised the price target from $250 to $280.

Athena Health (ATHN) fell -5% to $108 after Leerink Swan downgraded the stock to market perform. The analyst still likes the stock but said the practice management and medical records space was getting saturated with providers.

Carnival Corp (CCL) fell -7.6% after earnings and guidance failed to impress. Earnings of $1.38 beat lowered estimates of $1.30 but guidance was bad. Q4 earnings were projected in a range of -3 cents to +3 cents compared to prior estimates of 9 cents. The company said revenue would be down 3% to 4% and costs higher. The major impact is the continuing trouble in the Mediterranean and lack of tourist visits to places like Egypt, Turkey, etc. Carnival is recovering from a number of ship mishaps including the Costa Concordia. That ship was finally righted last week and will be towed to a beach where it will be cut up for scrap.


JC Penny shares declined to close at $11.90 and a low not seen since 2001. Apparently JCP is looking to raise additional money either through a loan or a share sale. Would you loan money to JCP?


The yield on the ten-year treasury fell to 2.65% today and a six-week low. In theory that should be good for the equity markets because investors would be looking to shift from treasuries to stocks in search of yield. However, with tremendous uncertainty in Washington it is equities that are being sold not treasuries. The critical area on the ten-year is about 2.45% and the support from July and August. Some analysts believe investors are waiting for that level to sell treasuries again.


I am not going to dwell too much on the major indexes today because it is not the market that is sick. The declines are due to the increasingly negative headlines in Washington and they will probably continue to weigh on the market for the next week and then get worse.

Eventually passing a budget resolution is just the first step in the process. That will be ugly but the real fight will come on the debt ceiling increase. That could start by this weekend or by next week for sure. The House is going to hang an entire wish list of ornaments on the bill and then fight to keep as many as possible. The government is expected to run out of money between Oct 9th-18th so there is a real urgency to get it done. There have been 11 fights over the debt ceiling in the last 20 years so this is nothing new. The House has the responsibility for the purse strings and the debt ceiling is one of their only weapons to fight for lower spending.

The headline volatility is going to be with us for a while. The S&P declined -4 points today and most of that came at the close on the filibuster news. Weak support at 1695 was tested and held. The next support level is 1680 followed by 1630 with a speed bump at 1650.


The Dow lost -66 points and closed at a 7 day low at 15,337 after dropping -80 points in the last 90 minutes of trading. The Dow was the weakest index with two of the new additions accounting for 50% of the drop. Goldman declined -2.28 and Visa -2.90.

The Dow appears poised for a significant drop as the headlines intensify. Initial support is 15,300 but then we could easily see a drop to 14,880 if investors start getting seasick on the volatility.



The Nasdaq Composite bucked the trend. The tech index closed mildly positive with a +3 point gain on back of the gains in AMAT, FB, LNKD, PCLN, NFLX, SSYS and AMZN. The strength in the techs and small caps is refreshing and suggests that fund managers are not too worried about an end of the world scenario developing out of the budget battles.

Resistance on the Nasdaq is 3800 with initial support at 3750 followed by 3700.


The Russell 2000 punched through to a new high over 1080 intraday but could not hold it during the closing drop. The Russell still managed to gain +2.5 points to close just below 1075 and within easy striking distance of a new closing high.

You have heard me say this many times but the Russell strength is very bullish for the overall market. If this trend continues there will be a blowout once the Washington madness ends. Support is 1065 and 1050 with resistance at 1080.


Buy the debt ceiling dip! There will probably be continued weakness into the debt ceiling fight but that is the dip I would buy. The Russell 2000 and Nasdaq are pointing the way but they are handicapped by uncertainty. Once that headline fog clears I think we could see a strong move higher. Repeated earnings warnings, wars and rumors of wars, massive terrorist attacks, threats of QE cuts, etc, etc, have not been able to hold back the Russell and Nasdaq. Let's hope that trend continues. Personally I would love to see a major dip on the debt ceiling fight because I believe it would be a great buying opportunity.

Enter passively, exit aggressively!

Jim Brown

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New Option Plays

3-D Printing

by James Brown

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NEW DIRECTIONAL CALL PLAYS

3D Systems - DDD - close: 55.15 change: +1.40

Stop Loss: 52.48
Target(s): 59.75 & 64.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks and two-to-three months
New Positions: Yes, see below

Company Description

Why We Like It:
DDD is part of the new 3-D printing industry. The stock is trading at all-time highs as many investors believe this will be a big growth industry for years to come. DDD has garnered a number of bullish analyst upgrades. Yet there are also bears on this stock and DDD could see a short squeeze. The most recent data listed short interest at 33% of the 94.5 million share float.

Today's high was $56.23. We are suggesting a trigger to buy calls at $56.35. If triggered our short-term target is $59.75. Our longer-term target is $64.00. The Point & Figure chart for DDD is bullish with a $71 target.

You'll notice that I am listing both the November calls and the 2014 January calls.

Trigger @ 56.35

- Suggested Positions -

Buy the NOV $60 call (DDD1316k60) current ask $2.60

- or -

Buy the 2014 Jan $60 call (DDD1418a60) current ask $4.30

Annotated Chart:

Entry on September -- at $---.--
Average Daily Volume = 4.1 million
Listed on September 24, 2013



In Play Updates and Reviews

Four Down Days In A Row

by James Brown

Click here to email James Brown

Editor's Note:

The stock market continues to sink following the post-FOMC meeting spike higher. The S&P 500 index is now down four days in a row.

COST has been removed. RRGB was stopped out.
SFUN and COO have been triggered.


Current Portfolio:


CALL Play Updates

Actavis, Inc. - ACT - close: 139.33 change: +0.73

Stop Loss: 134.70
Target(s): 148.50
Current Option Gain/Loss: -33.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/24/13: The bounce in ACT continued on Tuesday but shares remain stuck under the $140 level. More conservative traders might want to adjust their stops closer to the $136.00 level.

- Suggested Positions -

Long Oct $145 call (ACT1319j145) entry $1.50*

09/21/13 Shares of ACT were volatile right at the closing bell on Friday (09/20/13). Expected more volatility on Monday morning
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on September 19 at $139.50
Average Daily Volume = 985 thousand
Listed on September 18, 2013


Anadarko Petroleum - APC - close: 94.71 change: +0.60

Stop Loss: 92.25
Target(s): 99.50
Current Option Gain/Loss: -23.9%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
09/24/13: APC spiked up toward the $96.00 level intraday before paring its gains. Shares still outperformed the major indices with a +0.6% gain today. I am not suggesting new positions.

- Suggested Positions -

Long Oct $95 call (APC1319j95) entry $3.05*

09/21/13 new stop loss @ 92.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on September 11 at $94.25
Average Daily Volume = 2.55 million
Listed on September 09, 2013


Hanesbrand Inc. - HBI - close: 63.41 change: -0.19

Stop Loss: 62.25
Target(s): 68.50
Current Option Gain/Loss: -32.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/24/13: HBI spiked lower this morning thanks to a downgrade. Yet traders bought the dip again near yesterday's low and short-term support around the $62.50 level. I am not suggesting new positions at this time.

Earlier Comments:
The late July high near $65.60 could be short-term overhead resistance. I would not be surprised to see HBI stall or pullback on its initial test of this level.

- Suggested Positions -

Long Oct $65 call (HBI1319j65) entry $1.40

09/21/13 new stop loss @ 62.25

Entry on September 16 at $63.25
Average Daily Volume = 612 thousand
Listed on September 10, 2013


Jarden Corp. - JAH - close: 49.66 change: +0.61

Stop Loss: 47.75
Target(s): 54.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
09/24/13: JAH displayed relative strength with a +1.24% gain today. Yet the rally stalled at round-number resistance near the $50.00 mark. There is no change from my earlier comments.

Earlier Comments:
I am suggesting a trigger to buy calls at $50.25. If triggered our target is $54.50. More aggressive traders could aim higher.

I am suggesting the October calls but you might want to consider buying the 2014 January calls instead.

Trigger @ 50.25

- Suggested Positions -

buy the Oct $50 call (JAH1319j50)

Entry on September -- at $---.--
Average Daily Volume = 1.9 million
Listed on September 21, 2013


Magna Intl. - MGA - close: 84.43 change: +0.65

Stop Loss: 81.90
Target(s): 89.50
Current Option Gain/Loss: +20.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/24/13: MGA also displayed relative strength today with a +0.77% gain. The rally did stall at short-term resistance near $85.00. I need to warn you that tomorrow morning could be a little volatile. There were headlines, which appeared to surface after the closing bell, where MGA disclosed that German officials, armed with a search warrant, attended a Magna operating division in Germany in connection to an antitrust investigation. I don't see any afterhours drop in MGA's stock but that doesn't mean we won't see a knee jerk move lower. The press release about the event didn't have a lot of details.

- Suggested Positions -

Long Oct $85 call (MGA1319j85) entry $1.20

09/21/13 new stop loss @ 81.90
09/16/13 trade opened on gap higher at $82.76
trigger was $82.65

Entry on September 16 at $82.76
Average Daily Volume = 545 thousand
Listed on September 14, 2013


NetSuite Inc. - N - close: 107.20 change: +0.89

Stop Loss: 104.75
Target(s): 109.75
Current Option Gain/Loss: +52.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/24/13: Shares of N bounced from the $106 area and outperformed the market with a +0.8% gain. I am suggesting traders remain cautious. The rebound struggled with short-term resistance near $108. I am not suggesting new positions.

- Suggested Positions -

Long Oct $105 call (N1319j105) entry $2.75*

09/18/13 new stop loss @ 104.75, adjust exit target to $109.75
09/17/13 new stop loss @ 103.75
09/14/13 new stop loss @ 102.40
09/12/13 readers may want to take profits now
09/11/13 new stop loss @ 101.45
09/10/13 new stop loss @ 99.45
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on September 09 at $101.05
Average Daily Volume = 294 thousand
Listed on September 03, 2013


Northrop Gruman - NOC - close: 95.95 change: +0.09

Stop Loss: 94.75
Target(s): 99.50
Current Option Gain/Loss: (Oct97.5c:+118.1%) & 2014j100c: -12.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/24/13: Hmm... many of the defense-related names produced decent bounces today. NOC's bounce was rather anemic. Shares just hovered near the $95.00 level. This could be a warning signal. More conservative traders may want to exit early now!

- Suggested Positions -

Oct $97.50 call (NOC1319j97.5) entry $1.10 exit $2.40*(+118.1%)

- or -

Long 2014 Jan $100 call (NOC1418a100) entry $2.16

09/18/13 closed the Oct. $97.50 calls @ the open
*option exit price is an estimate since the option did not trade at the time our play was closed.
09/17/13 prepare to exit the Oct. $97.50 calls at the open tomorrow
09/17/13 new stop loss @ 94.75, adjust exit target to $99.50
09/16/13 new stop loss @ 94.25
09/14/13 new stop loss @ 93.30

Entry on September 12 at $95.25
Average Daily Volume = 1.2 million
Listed on September 11, 2013


Starbucks Corp. - SBUX - close: 76.55 change: +1.19

Stop Loss: 73.90
Target(s): 79.00
Current Option Gain/Loss:(Oct75c:+ 93.2%) & 2014Jan75c: +43.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/24/13: SBUX shot higher this morning and traded above $77.00 before trimming its gains. The relative strength is encouraging. More conservative traders might want to raise their stop. I am not suggesting new positions at this time.

- Suggested Positions -

Oct $75 call (SBUX1319j75) entry $1.18 exit $2.28 (+93.2%)

- or -

Long 2014 Jan $75 call (SBUX1418a75) entry $3.25

09/19/13 new stop loss @ 73.90
09/18/13 new stop loss @ 73.40, adjust exit to $79.00
this morning we closed the Oct. $75 calls at the open.
09/17/13 prepare to exit the October $75 calls at the open tomorrow
09/17/13 new stop loss @ 72.40
09/14/13 new stop loss @ 71.75
09/11/13 SBUX at new highs. Cautious traders may want to lock in some gains.

Entry on September 05 at $72.35
Average Daily Volume = 3.0 million
Listed on September 04, 2013


SouFun Holdings - SFUN - close: 48.93 change: -1.05

Stop Loss: 47.90
Target(s): 57.50
Current Option Gain/Loss: -37.1%
Time Frame: exit prior to October expiration
New Positions: see below

Comments:
09/24/13: I have to urge caution here. Our new trade on SFUN has been triggered but the stock isn't cooperating. Our plan was to buy calls on a breakout over $51.00 with a trigger to buy calls at $51.10. SFUN gapped open higher at $51.14 and then promptly collapsed back below the $50 level. Shares underperformed the market with a -2.1% decline. The low today was $48.63. Our stop loss is at $47.90. I would wait for a new rally above $51.00 before considering new positions.

Earlier Comments:
This is an aggressive, higher-risk trade. I am suggesting we use small positions to help limit our risk. The recent high near $53.50 could be resistance but we're aiming for $57.50. The Point & Figure chart for SFUN is bullish with a $63 target.

*small positions* - Suggested Positions -

Long Oct $55 call (SFUN1319j55) entry $1.75*

09/24/13 trade opened on gap higher at $51.14. Trigger was 51.10
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on September 24 at $51.14
Average Daily Volume = 1.2 million
Listed on September 23, 2013


PUT Play Updates

Alliant Techsystems - ATK - close: 97.20 change: +2.04

Stop Loss: 98.05
Target(s): 90.25
Current Option Gain/Loss: -50.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/24/13: Defense names bounced and ATK outperformed the market with a +2.1% gain. In spite of the big bounce the rally stalled at the new short-term (less than two-week) trend line of lower highs. We are adjusting our stop loss down to $98.05. If ATK rolls over back below its 50-dma (near 96.40) I would consider new positions.

Earlier Comments:
Our target is $90.25. More aggressive traders may want to aim for the rising 100-dma instead. I do consider this a slightly more aggressive, higher-risk trade because we're using a wider stop loss, just above Friday's intraday high.

- Suggested Positions -

Long Oct $95 PUT (ATK1319v95) entry $2.80

09/24/13 new stop loss @ 98.05

Entry on September 23 at $94.75
Average Daily Volume = 434 thousand
Listed on September 21, 2013


The Cooper Companies - COO - close: 127.79 change: -1.46

Stop Loss: 131.75
Target(s): 124.00
Current Option Gain/Loss: + 2.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/24/13: Our new trade on COO has been triggered. Shares opened lower at $129.24 and quickly hit our suggested entry point at $128.90. COO underperformed the market with a -1.1% decline.

- Suggested Positions -

Long Oct $125 PUT (COO1319v125) entry $2.00

Entry on September 24 at $128.90
Average Daily Volume = 280 thousand
Listed on September 23, 2013


The Fresh Market, Inc. - TFM - close: 48.13 change: -0.26

Stop Loss: 50.05
Target(s): 42.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
09/24/13: TFM tried to bounce this morning but the rally failed under its 10-dma. Shares are inching closer to a breakdown below support. There is no change from my prior comments.

Earlier Comments:
The September 4th low was $47.71. I am suggesting a trigger to buy puts at $47.50. If triggered our target is $42.00. I am suggesting we keep our position size small because TFM can be a little bit volatile. Plus the most recent data listed short interest at 13% of its small 40.1 million share float.

FYI: The Point & Figure chart for TFM is bearish with a $39 target.

Trigger @ 47.50

- Suggested Positions -

buy the Oct $45 PUT (TFM1319v45) current ask $0.40

Entry on September -- at $---.--
Average Daily Volume = 591 thousand
Listed on September 16, 2013


Western Digital Corp. - WDC - close: 64.68 change: +1.41

Stop Loss: 65.60
Target(s): 60.15
Current Option Gain/Loss: -28.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/24/13: Ouch! After yesterday's bearish breakdown below the 100-dma there was no follow through lower today. Instead WDC shot higher at the open and continued to climb almost all day. WDC outperformed the market with a +2.2% gain. Shares do remain below the bearish trend of lower highs. I am not suggesting new positions at this time.

Earlier Comments:
our target is $60.15. I would keep our position size small to limit risk. More aggressive traders may want to aim lower. The Point & Figure chart for WDC is bearish with a $52 target.

*small positions* - Suggested Positions -

Long Oct $60 PUT (WDC1319v60) entry $1.22

09/23/13 trade opened on gap down at $63.24.
suggested trigger was $63.50

Entry on September 23 at $63.24
Average Daily Volume = 2.2 million
Listed on September 21, 2013



Longer-Term Play Updates



Chicago Bridge & Iron - CBI - close: 66.36 change: +0.10

Stop Loss: 59.75
Target(s): 74.50
Current Option Gain/Loss: +72.5%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
09/24/13: It was a quiet session for CBI with shares hovering near the $66 level.

*Small Positions* - Suggested Positions -

Long 2014 Jan $65 call (CBI1418A65) entry $2.55

09/21/13 new stop loss @ 59.75
09/11/13 new stop loss @ 57.65
07/20/13 new stop loss @ 55.75
06/29/13 CBI might be poised to dip into the $57-55 zone again.
06/24/13 triggered @ 56.75
06/22/13 adjust entry trigger to $56.75
06/15/13 entry strategy change: change the breakout trigger at $65.25 to a buy-the-dip trigger at $56.50. Adjust the stop loss to $53.75.
Adjust the option strike to the 2014 Jan. $65 call

Entry on June 24 at $56.75
Average Daily Volume = 1.8 million
Listed on June 01, 2013


Vanguard FTSE Europe ETF - VGK - close: 54.70 change: -0.15

Stop Loss: 50.95
Target(s): 58.50
Current Option Gain/Loss: +16.6%
Time Frame: exit PRIOR to 2014 March option expiration
New Positions: see below

Comments:
09/24/13: Both the S&P 500 and the VGK have declined four days in a row. The VGK did try and bounce from its 10-dma this morning but the rebound rolled over under the $55.00 level midday.

Look for support in the $53.00-53.50 zone.

Earlier Comments:
We are taking a multi-month time frame with this trade. If we are triggered our target is $58.50 but we'll adjust it as the trade progresses. FYI: The Point & Figure chart for VGK is bullish with a $63 target.

- Suggested Positions -

Long 2014 Mar $55 call (VGK1422L55) entry $1.80*

09/11/13 trade opens. VGK @ 53.60
*option entry @ 1.80 is an estimate. Ask closed at $1.75 yesterday
09/10/13 entry trigger met. open positions tomorrow.
09/10/13 new stop loss @ 50.95
08/24/13 adjust the option strike from 2013 Dec $55 to $2014 Mar $55.

Entry on September 11 at $---.--
Average Daily Volume = 3.0 million
Listed on August 10, 2013


CLOSED BULLISH PLAYS

Costco Wholesale Corp. - COST - close: 116.34 change: -1.23

Stop Loss: 116.90
Target(s): 127.50
Current Option Gain/Loss: Unopened
Time Frame: Exit PRIOR to earnings on October 9th
New Positions: Yes, see below

Comments:
09/24/13: COST has broken down from its recent trading range. The stock looks vulnerable to more selling pressure. Our trade has not opened yet so we're removing COST as a bullish candidate. The suggested entry trigger was $120.30.

Trade did not open.

09/24/13 removed from the newsletter

chart:

Entry on September -- at $---.--
Average Daily Volume = 1.5 million
Listed on September 19, 2013


Red Robin Gourmet Burgers - RRGB - close: 68.18 change: -0.39

Stop Loss: 67.90
Target(s): 74.75
Current Option Gain/Loss: -73.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/24/13: The stock market's afternoon weakness was too much for RRGB. The stock broke down under short-term support near $68.00 and hit our stop loss at $67.90 before paring its losses. The option saw a serious drop near the closing bell.

- Suggested Positions -

Oct $70 call (RRGB1319j70) entry $2.25 exit $0.60 (-73.3%)

09/24/13 stopped out

chart:

Entry on September 18 at $70.25
Average Daily Volume = 126 thousand
Listed on September 17, 2013