Option Investor
Newsletter

Daily Newsletter, Sunday, 7/22/2012

Table of Contents

  1. Leaps Trader Commentary
  2. Portfolio
  3. New Plays
  4. Play Updates
  5. Watch

Leaps Trader Commentary

A Minefield of Issues

by James Brown

Click here to email James Brown

The stock market's midweek rally is losing steam. Friday's widespread decline chopped off most of the week's gains, while small caps have been underperforming. Investors seemed to be ignoring the most recent parade of disappointing economic numbers in favor of earnings news. Thus far about 120 of the S&P 500's components have reported earnings and 67% of them have beaten Wall Street's lowered estimates. Yet renewed worries about Spain sparked some profit taking in stocks and the yield on Spanish 10-year bonds closed the week at 7.2%. The euro currency closed at a new two-year low. For the week the S&P 500 is up +0.4%, the NASDAQ composite is up +0.5%, the Dow Industrials +0.3% and the small cap Russell 2000 index lost -1.1%.

Economic data continues to disappoint but the big event was Fed Chairman Bernanke's semi-annual testimony before Congress. He spoke before Senate on Tuesday and the House on Wednesday. While Bernanke didn't say anything new he did suggest that deflation remains a possibility. Many are still expecting the Fed to offer some form of new stimulus. The only problem is that if the Federal Reserve doesn't act this July it's going to be a long six weeks until the next meeting in September.

The Fed's Beige book report suggested the economy grew at a moderate pace but employment growth remains tepid. The CPI data was flat. Industrial production came higher than expected at +0.4%. The New York Empire State manufacturing survey was better than estimated. Yet everything else was a disappointment. June retail sales data, the Philly Fed, the existing home sales, weekly initial jobless claims and leading indicators all fell below estimates.

We have been fortunate that traders were focused on Q2 earnings news. Analysts estimates have been lowered so much that many companies have managed to beat the estimate. Unfortunately, they are beating the profit estimate but missing the revenue estimate. That means corporations are meeting their numbers by cost cutting, not new business. That's troubling as we look ahead with the economy slowing down. The rising U.S. dollar has been a negative impact on many of the multi-national companies as they convert profits back into dollars. The rising dollar also makes their products more expensive overseas and less competitive. Spain seems to be closer to the financial abyss than we thought. Rumors started late in the week that Spain's regional government of Valencia would soon ask the national government for a bailout. This is the second regional government that's expressed their dire need for help. Meanwhile at the same time Spain lowered their growth forecasts for 2012 and 2013 and said their country would remain in recession throughout 2013.

Compounding matters with Spain was news the European Central Bank (ECB) would no longer accept Spanish bonds as collateral for loans. This is a big deal. If banks can't use Spanish bonds as collateral then any demand for them, which was already soft, will dry up completely. The yield on Spain's 10-year bond soared past the key 7% mark and ended the week with a yield at 7.2%. Many consider the 7% level to be unsustainable and a signal that Spain will soon request a bailout before defaulting on its debts. The trouble is that Spain is considered too big to bailout. This news helped spark a -5.8% plunge in the Spanish stock market on Friday.

Adding to the distress in Europe was a news report that the IMF is about ready to give up on the Eurozone. It seems there is too much risk for problems in one country to spill over into another but not enough of a fiscal union to solve these problems. Pouring salt on this wound was another story out this weekend that the IMF has officially given up on Greece and would no longer provide any additional aid monies to the struggling country. This probably guarantees that Greece will be in default again in September unless someone else steps in to backstop Greece.

Meanwhile back in the U.S. we are suffering a serious drought. It's the worst drought in over 20 years with 42 states affected. Forecasters are expecting this drought to last into October. This is killing the corn and soybean crops. The price of corn is naturally skyrocketing. Unfortunately about 70% of the products we purchase in the supermarket are made with some form of corn. Animals eat corn as feed. Manufacturers use corn and corn syrup for thousands of items. We can expect prices in our local supermarket to rise as agricultural commodities rise in price.

Major Indices:

On Friday the 13th the S&P 500 shot higher on what looked like short covering. Stocks paused to catch their breath on Monday and then the rally continued for another three days. The S&P 500 managed to hit resistance at the 1380 level on Thursday. Friday's sharp drop has pushed it all the way back to support/resistance at 1360.

If this pullback continues then the next support level is probably 1340. Beyond that potential support at 1320 and then the simple 200-dma near 1315. I am worried that if the S&P 500 closes under the mid July low of 1325 then the July peak will look like a lower high. That would suggest we're due for a lower low, which means a test of or a drop past the June lows near 1280.

Daily chart of the S&P 500 index:

We should be worried about the NASDAQ. The index did manage to breakout past resistance near 2950 and the 100-dma but it didn't last. Now it seems the NASDAQ has created a lower high. There is potential support near 2900 and 2850. Just like the S&P 500, I am worried that a close under the NASDAQ's July low will signal a drop back toward the June lows or worse.

Daily chart of the NASDAQ Composite index:

The small cap Russell 2000 index underperformed the major indices on a weekly basis with a -1.1% decline. It too has formed a lower high. Odds are we will see the $RUT retest key support at the 780 level again. A close under 780 would be very bearish but there is a lot of congestion with possible technical support at the 50-dma and 200-dma in the 770-780 area. So we might need to wait for a close under 770 as a clearly bearish signal.

Daily chart of the Russell 2000 index

Looking ahead on the economic and event calendar it's a quiet week for economic data. The focus will remain on Q2 earnings results and then the Q2 GDP estimate out on Friday. If the GDP estimate misses estimates it could spark another market sell-off. If you consider the nearly constant parade of less than expected economic reports over the last several weeks the odds of the GDP number coming in low are probably pretty good.

Meanwhile we have a very, very busy week for earnings results. Yet there are two companies that will hog the spotlight. Apple Inc. (AAPL) and Facebook (FB). AAPL reports earnings on July 24th. Wall Street expects a profit of $10.38 a share. Facebook reports on July 26th and estimates are for 11 cents a share. If AAPL misses or issues soft (weak) guidance it could be the catalyst that sends the market a lot lower!

Economic and Event Calendar

- Monday, July 23 -
(nothing significant) but Q2 earnings season continues

- Tuesday, July 24 -
(nothing significant)

- Wednesday, July 25 -
new home sales for June

- Thursday, July 26 -
Weekly Initial Jobless Claims
Durable Goods Orders
Pending home sales

- Friday, July 27 -
Q2 GDP estimate
University of Michigan Consumer Sentiment (final estimate for July)

The Week Ahead:

Looking ahead we will have to wade through dozens and dozens of earnings news and a renewed focus on Greece and Spain. If the ECB is giving up on Spain (no more loans as collateral) and the IMF is giving up on Greece (no more aid) then the situation just got a lot worse for the Eurozone.

No wonder investor sentiment is so bearish. According to the AAII sentiment survey the number of investors who are bullish has plunged to just 22.2%. Last week it was 30%. The long-term average is 39% bullish. Bullish sentiment has been under the long-term average for 16 weeks in a row! That hasn't happened in almost 20 years. Now the contrarian will point to this and say, "Ah hah! Sentiment is so low that now is the time to buy stocks." In the past when we see extreme lows in bullish sentiment it typically signals a market bottom is near. Yet stocks just hit a new relative high on Thursday, not a new low.

The volatility index (VIX), which is the traditional fear gauge, is at 16 with the 15-14 area being multi-year lows. If investors were "fearful" the VIX would be spiking past 25 toward the 30 area. So the VIX is clearly not showing any fear - but investors obviously don't like stocks if you follow the sentiment data.

Now add the calendar to the mix. Historically the three worst months of the year are September, February, and August, in that order. So we are facing two of the worst three months of the year. If that wasn't bad enough we're also facing a presidential election in the U.S. Plus, we will soon be facing the U.S. debt ceiling issue again. You may remember last year in August when politicians were arguing about the U.S. debt ceiling and let it expire. The market saw a huge multi-week drop. Now with the elections this November the debt ceiling issue will become even more polarizing.

Overall the stock market is facing a barrage of bad news and major obstacles in our way. That doesn't mean that individual stocks can't rally. There are always exceptions. Yet the wider market, which influences 75% of a stock's move, is trying to navigate a minefield of issues that could send the market lower. Don't even get me started on the fiscal cliff scheduled for January 2013 (I've mentioned it in previous wraps).

If we see a bullish opportunity, I would be very cautious when it comes to initiating positions and start with a small position size to limit your exposure. There is the distinct possibility that stocks are a lot lower in September. I'd rather preserve cash to initiate positions this fall and ride any Q4 rebound than nurse a losing trade between now and then.

- James


Portfolio

Portfolio Update

by James Brown

Click here to email James Brown


Current Portfolio


Portfolio Comments:

The U.S. market managed to ignore bad news with a three-day rally but traders started taking profits on Friday.

As planned we closed our UNH trade on Monday morning (July 16th) and we closed our RAI at the close on Friday (July 20th).

You'll notice several new candidates from our watch list.

We want to exit our EBAY trade and exit our 2013 LLY calls at the open on Monday!

There were no stop loss changes this week.

Disclaimer: At any given time the author may have positions in any or all of any companies mentioned in the Leaps Newsletter.

--Position Summary Table--
Table lists Directional CALL or PUT/LEAPS only.
Insurance puts, if applicable, are not shown.

Red symbol/name represents a play or option position exited or closed this week.





New Plays

Plus, Plus, Plus...

by James Brown

Click here to email James Brown

Editor's Note:

(July 21st, 2012)

The S&P 500 managed to tag a new relative high only to reverse sharply into the weekend and July option expiration. Now we are nearing two of the worst three months of the year (August and September). Plus, the situation in Europe with Spain and Greece is getting worse, not better. Plus, we will soon be hearing about the U.S. debt ceiling issue again. Plus, the U.S. is in the middle of the worst drought in over 20 years, which is sending agricultural commodities soaring. This will impact consumer spending, which powers 70% of the U.S. economy.

Believe it or not our watch list continues to generate new trades. We just had five watch list candidates graduate to the active trade list this past week. So we're not adding anything new tonight.

Here is a list of stocks currently on my radar screen as potential candidates to keep an eye on:

XHB, WFC, SLB, MMM, QCOM, XOM, CVX, RIG, CCJ, TGT, OXY, KS,


Play Updates

Closing RAI with Gains

by James Brown

Click here to email James Brown

Editor's Note:

We have added several new candidates from our watch list.
CVS, MON, PFE, UNP, USB


Closed Plays


RAI and UNH were closed as planned.


Play Updates


Abbott Labs - ABT - close: 65.06

Comments:
07/21/12 update: ABT tagged another new record high earlier in the week but shares started to see some profit taking by Wednesday afternoon. ABT has been slowly slipping lower since then and closed down about 40 cents for the week. I would expect the $63 level and/or the 50-dma to offer some support if the market sees a correction.

It's worth noting that ABT reported earnings on July 18th and beat Wall Street's estimates by a penny. Revenues were in-line with estimates and ABT reaffirmed its prior guidance. I am not suggesting new positions at this time.

Earlier Comments:
Before we continue I want to warn you that trading the drug makers or biotech stocks has an industry-specific danger. You never know when an FDA approval might get denied or delayed. Or some clinical trial data might disappoint. Headlines like these can send a stock gapping down. On the other hand positive news could send it soaring.

- Suggested Positions -
JUL 02, 2012 - entry price on ABT @ 64.22, option @ 1.91
symbol: ABT1319A65 2013 JAN $65 call - current bid/ask $ 2.52/ 2.56

- or -

JUL 02, 2012 - entry price on ABT @ 64.22, option @ 4.28
symbol: ABT1418A65 2014 JAN $65 call - current bid/ask $ 4.55/ 4.80

07/14/12 ABT is due to report earnings on July 18th
07/02/12 ABT opened at $64.22
06/29/12 ABT closed @ 64.47. Plan was to wait for a close over $63.50 and buy calls the next day. We will open positions on Monday, July 2nd.

Current Target:$74.00
Current Stop loss: 59.40
Play Entered on: 07/02/12
Originally listed on the Watch List: 06/23/12


Allergan Inc. - AGN - close: 85.15

Comments:
07/21/12 update: Ouch! What happened to AGN? The stock lost more than $5 on the week. Shares are down about 10 points from its July highs. The problem is I don't see any specific news behind this sell-off!

In the last two weeks AGN has broke down under support near $88, near its 200-dma, and now its 300-dma. The stock closed on Friday near potential support at $85.00. If there is any follow through lower on Monday we will see AGN hit our stop loss at $84.50.

The stock tried to bounce on Thursday but it just collapsed on Friday. I am not suggesting new positions at this time.

FYI: AGN is due to report earnings on August 1st.

Earlier Comments:
Option spreads are wide for these LEAPS. We want to keep our position size pretty small to limit our risk.

- Suggested Positions -
OCT 17, 2011 - entry price on AGN @ 85.46, option @ 5.10
symbol: AGN1319A100 2013 JAN $100 call - current bid/ask $ 0.80/ 1.10

07/21/12 AGN has plunged lower in the last two weeks and sits just above our stop loss at $84.50
05/02/12 AGN missed earnings estimates by a penny, guided lower
04/28/12 Exit strategy adjustment! We are not selling half at $99.00. Instead we'll aim for $109.00 to exit positions. See tonight's note for details on alternative exits
03/31/12 adjusted exit strategy. Sell half at $99.00 and sell the remainder at $109.00
03/10/12 new stop loss at $84.50
02/02/12 earnings in-line but guided lower for 2012
01/28/12 earnings are due on Feb. 2nd. Readers might want to raise their stop or consider some sort of hedge prior to the report.
12/24/11 new stop loss @ 81.60
12/10/11 spreads on our 2013 calls are getting wider!
11/19/11 Taking an aggressive stance on our stop loss and moving it down to $77.45
10/22/11 Earnings are coming up. Readers might want to consider raising their stop loss. We are keeping ours at $79.45.

Current Target:$109.00
Current Stop loss: 84.50
Play Entered on: 10/17/11
Originally listed on the Watch List: 09/24/11


American Intl. Group - AIG - close: 31.03

Comments:
07/21/12 update: AIG isn't making much progress. The stock tried to breakout from its $30-32.50 trading range on Tuesday but the rally reversed. Now AIG is back in the middle of this range and looks headed for support near $30 again. More conservative traders may want to raise their stops closer to $30.

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

FYI: AIG is due to report earnings on August 2nd.

- Suggested Positions - (small positions @ first)
May 18, 2012 - entry price on AIG @ 28.25, option @ 3.40
symbol: AIG1319A30 2013 JAN $30 call - current bid/ask $ 3.65/ 3.80

- or -

May 18, 2012 - entry price on AIG @ 28.25, option @ 4.20
symbol: AIG1418A35 2014 JAN $35 call - current bid/ask $ 4.20/ 4.40

06/16/12 new stop loss @ 26.95
05/18/12 triggered at $28.25
05/05/12 The U.S. government is planning to sell 164 million shares at $30.50 and AIG will probably gap down on this news.
Move the trigger down to $28.25, and move the stop loss to $25.75.
04/28/12 adjust buy-the-dip trigger to $30.00 and stop to $27.40

Current Target:$ 39.00
Current Stop loss: 26.95
Play Entered on: 05/18/12
Originally listed on the Watch List: 04/07/12


Amarin Corp. - AMRN - close: 15.16

Comments:
07/21/12 update: Shares of AMRN saw a spike on Thursday after the company's website accidentally posted a webpage showing their heart drug had been approved by the U.S. FDA. According to then news, the FDA is not scheduled to announce a decision on this drug until July 26th.

The overall trend in AMRN remains bullish and readers may want to consider new positions on a close above $15.50 or $16.00. However, keep in mind that if the FDA does not approve this new heart drug the stock could plunge on the headline.

Earlier Comments:
There has been some speculation that AMRN is a takeover target, which has fueled some of the sharp rallies higher. Currently the Point & Figure chart is bullish with a $15.00 target. Our long-term target is $17.50. FYI: We want to keep our position size small. AMRN can be a volatile stock. There are 2014 options available but the spreads are too wide.

- Suggested Positions - (small positions)
Jun 26, 2012 - entry price on AMRN @ 13.52, option @ 3.36
symbol:AMRN1319A15 2013 JAN $15 call - current bid/ask $ 3.90/ 4.30

06/26/12 trade opened: option @ 3.36
06/25/12 closed over our trigger (13.25) AMRN closed @ 13.39
06/23/12 adjust entry. wait for AMRN to close over $13.25 (instead of $13.00)

Current Target:$ 17.50
Current Stop loss: 11.40
Play Entered on: 06/26/12
Originally listed on the Watch List: 06/09/12


Apache Corp. - APA - close: 85.08

Comments:
07/21/12 update: APA posted a decent gain for the week but I remain cautious here. The rally stalled on Thursday as APA filled the gap down from July 6th. Furthermore the action over the last several weeks still looks like a potential bear-flag pattern. More conservative traders may want to raise their stop loss closer to the $81.50 area. I am not suggesting new positions.

FYI: APA is due to report earnings on August 2nd.

- Suggested Positions -
Jun 18, 2012 - entry price on APA @ 87.10, option @ 3.45
symbol: APA1319A100 2013 JAN $100 call - current bid/ask $ 1.69/ 1.77

- or -

Jun 18, 2012 - entry price on APA @ 87.10, option @ 6.43
symbol: APA1418A100 2014 JAN $110 call - current bid/ask $ 4.15/ 4.40

Current Target: $109.00
Current Stop loss: 79.75
Play Entered on: 06/18/12
Originally listed in the New Plays 06/16/12


Bank of America - BAC - close: 7.07

Comments:
07/21/12 update: BAC reported earnings on July 18th. The company beat estimates by five cents but missed the revenue number with revenues at $22.2 billion versus the $23.2 estimate. Investors decided to sell the news. BAC's stock has produced a bearish reversal under the $8.00 level and its 300-dma and exponential 200-dma. The current three-day sell-off looks pretty ugly. More conservative traders may want to abandon ship right now!

I am not suggesting new positions at this time.

Earlier Comments:
Currently we do not have a specific exit target. The plan has been to exit in the $12.00-15.00 zone.

- Suggested Positions -

AUG 29, 2011 - entry price on BAC @ 8.10, option @ 1.50
symbol: BAC1319A10 2013 JAN $10 call - current bid/ask $ 0.14/ 0.15
(No stop loss on this position)

(2nd Position, bought the dip at $5.15)

NOV 23, 2011 - entry price on BAC @ 5.15, option @ 0.35
symbol: BAC1319A10 2013 JAN $10 call - current bid/ask $ 0.14/ 0.15
(no stop loss on this position)

07/21/12 BAC reported earnings this past week and investors have decided to sell the news. The stock looks vulnerable here and readers may want to exit early!
05/19/12 BAC has pulled back to the 61.8% retracement
03/17/12 BAC has broken out from its multi-week trading range. Broken resistance near $8.30 should be new support.
...look for earlier comments in prior updates...

Current Target: $12.00-to-$15.00
Current Stop loss: see details above
Play Entered on: 08/29/11
Originally listed in the New Plays 08/27/11


Bristol Meyers Squibb - BMY - close: 35.42

Comments:
07/21/12 update: Hmm... BMY eked out a gain for the week in spite of Friday's -2.0% decline. I am worried that this past week may have produced the second peak to a bearish double top pattern. Readers may want to just take profits now and exit early. I would expect a drop back toward $35.00 on a short-term basis and if the market starts to sink then we could see BMY retesting the $34 area. I am not suggesting new positions at this time.

This company is due o report earnings on July 25th.

- Suggested Positions -
SEP 19, 2011 - entry price on BMY @ 30.53, option @ 1.20
symbol: BMY1319A35 2013 JAN $35 call - current bid/ask $ 1.75/ 1.79

07/21/12 Uh-oh! BMY may be forming a bearish double top pattern.
07/14/12 new stop loss @ 32.75
06/30/12 adjusted exit target to $38.50
06/23/12 there was no follow through on the bearish reversal. BMY has rallied toward its 2011/2012 highs.
06/16/12 BMY has created a bearish reversal under resistance
06/09/12 new stop loss @ 31.90
05/26/12 new stop loss @ 31.45
02/11/12 adjust stop loss to $30.90
01/03/12 planned exit, sell half, bid on 2013 Jan $35 call @ 2.58 (+115%)
...(I have deleted earlier 2011 comments on BMY, you can see them in older updates)

Current Target: $38.50
Current Stop loss: 32.75
Play Entered on: 09/19/11
Originally listed on the Watch List: 09/10/11


CH Robinson Worldwide - CHRW - close: 56.96

This is a bearish PUT option trade.

Comments:
07/21/12 update: The oversold bounce in CHRW has reversed with a sharp -4.3% plunge on Friday. The stock looks poised for more weakness but shares might churn sideways until the company reports earnings. CHRW is scheduled to report earnings on July 24th, after the closing bell. Meanwhile UPS reports earnings on July 24th, before the opening bell, and could influence trading in CHRW. I am not suggesting new positions at this time.

Our multi-month target is a drop to $50.50. We want to keep our position size small to limit our risk.

- Suggested (small) Positions -
May 07, 2012 - entry price on CHRW @ 60.61, option @ 3.00
symbol:CHRW1319M55 2013 JAN $55 PUT - current bid/ask $ 3.30/ 3.60

07/14/12 raising the risk on this trade by adjusting the stop loss to $63.25.
06/02/12 new stop loss @ 62.25

Current Target: $50.50
Current Stop loss: 63.25
Play Entered on: 05/07/12
Originally listed in the New Plays 05/05/12


Colgate-Palmolive Co. - CL - close: 103.90

Comments:
07/21/12 update: CL just spent the last few days churning sideways. That is until Friday's -1% decline. I would expect CL to continue moving sideways until they report earnings on July 26th. Readers may want to seriously consider taking profits ahead of the earnings report instead of holding over the announcement.

I am not suggesting new positions at this time.

- Suggested Positions -
MAR 16, 2012 - entry price on CL @ 95.48, option @ 2.92
symbol: CL1319A100 2013 JAN $100 call - current bid/ask $6.70/6.85

- or -

MAR 16, 2012 - entry price on CL @ 95.48, option @ 5.57
symbol: CL1418A100 2014 JAN $100 call - current bid/ask $10.45/11.45

07/14/12 new stop loss @ 99.00, readers may want to take profits now.
options are at +155% and +98%
06/30/12 new stop loss @ 95.75
06/16/12 readers may want to take profits now. options @ +98%, +78%
06/09/12 new stop loss @ 92.45
06/02/12 correction continues. look for a dip toward $94
05/26/12 Still expecting a correction into the 96-94 zone.
05/19/12 CL looks poised to see a correction toward $96-94
05/05/12 new stop loss @ 91.75
04/26/12 CL reports earnings that are in-line with estimates.
03/31/12 CL is performing well but expect resistance at the $100 level and a possible pullback.

Current Target: $109.00
Current Stop loss: 99.00
Play Entered on: 03/16/12
Originally listed on the Watch List: 03/10/12


CVS Caremark Corp. - CVS - close: 45.08

Comments:
07/21/12 update: Ouch! It was a bad week for CVS. The stock gapped down sharply on Thursday on news that its rival Walgreens (WAG) had finally worked out a deal with Express Scripts (ESRX). The two companies had been arguing over contracts and CVS was picking up business in the meantime.

Our plan was to buy calls the day after CVS closed above $48.50. It just so happens that CVS closed above our trigger on July 18th. So our entry was the gap down on July 19th at $45.98. We are adjusting our stop loss down to $42.45. I am not suggesting new positions at this time. We will re-evaluate next week.

Our long-term target is $57.50 for the 2014 calls.

FYI: CVS is due to report earnings on Aug. 7th.

- Suggested Positions -
Jul 19, 2012 - entry price on CVS @ 45.98, option @ 0.93
symbol: CVS1319A50 2013 JAN $50 call - current bid/ask $0.70/0.75

- or -

Jul 19, 2012 - entry price on CVS @ 45.98, option @ 1.70*
symbol: CVS1418A55 2014 JAN $55 call - current bid/ask $1.32/1.46

*entry price on the 2014 option is an estimate since the option didn't trade on the 19th.
07/19/12 trade opens as CVS gaps lower at $45.98 on news
07/18/12 CVS closed above our trigger at $48.50

Chart of CVS:

Current Target: $57.50
Current Stop loss: 42.45
Play Entered on: 07/19/12
Originally listed on the Watch List: 07/14/12


Discover Financial - DFS - close: 34.91

Comments:
07/21/12 update: Trading in DFS was a little bit bumpy but shares only lost about five cents for the week. The stock should have short-term support near $34.00 and then again near its 50 and 100-dma in the $33 area. Readers may want to wait for DFS to test and then bounce off these levels before considering new bullish positions.

NOTE: Rivals Visa (V) reports earnings on July 25th and MasterCard (MA) reports earnings on Aug. 1st. These results could have a big influence on DFS.

- Suggested Positions -
JUL 05, 2012 - entry price on DFS @ 35.28, option @ 2.15
symbol: DFS1319A37 2013 JAN $37 call - current bid/ask $1.65/1.80

- or -

JUL 05, 2012 - entry price on DFS @ 35.28, option @ 3.40
symbol: DFS1418A40 2014 JAN $40 call - current bid/ask $2.55/3.10

07/05/12 trade opens with DFS at $35.28
07/03/12 DFS closes at $35.45, above our trigger @ 35.00
06/30/12 removed the buy-the-dip trigger.
06/23/12 adjusted entry point strategy to two different entries
06/16/12 DFS is scheduled to report earnings on June 19th.

Current Target: $ 42.50
Current Stop loss: 31.75
Play Entered on: 07/05/12
Originally listed on the Watch List: 06/02/12


eBay Inc. - EBAY - close: 44.85

Comments:
07/21/12 update: It was a good week for EBAY thanks to the earnings report. EBAY reported earnings on July 18th. Wall Street was expecting 55 cents on $3.36 billion in revenue. EBAY delivered a profit of 56 cents a share on $3.4 billion. The company reaffirmed prior guidance. The Paypal unit continues to shine but investors were impressed with growth in the Ebay marketplace division. Their mobile business is surging.

The stock gapped open higher on Thursday with a rally from about $40.50 to almost $44.00. The intraday high on Friday was $45.48.

NOTE: I am suggesting we go ahead and take profits now! We were aiming for $46.50 but I'd rather lock in a gain now. We'll close positions on Monday morning. Current bid on our 2014 Jan $40 calls is $10.40.

- Suggested Positions -
Mar 12, 2012 - entry price on EBAY @ 36.36, option @ 5.11
symbol: EBAY1418A40 2014 JAN $40 call - current bid/ask $10.40/10.55

07/21/12 Prepare to exit our remaining positions on Monday morning
07/14/12 cautious traders may want to exit prior to earnings
06/23/12 new stop loss @ 37.75
06/09/12 adjusted target to $46.50
05/14/12 closed 2013 Jan $40 calls with a bid at $4.80 (+68.4%)
05/12/12 exit the 2013 Jan $40 calls at the open on Monday. Currently the bid is $4.90
(I have removed prior comments. You can find them on older updates)

Current Target: $46.50
Current Stop loss: 37.75
Play Entered on: 03/12/12
Originally listed in the New Plays 03/10/12


Coca-Cola Company - KO - close: 77.03

Comments:
07/21/12 update: KO reported earnings on the 17th. The company beat estimates by three cents with $1.22 a share. Revenues also beat with $13.09 billion for the quarter. The stock saw an initial pop higher above $78 but spent the rest of the week drifting lower. There is no change from my prior comments.

We remain long-term bullish here but I am not suggesting new positions at this time. More conservative traders may want to raise their stop loss.

Earlier Comments:
We will plan to exit positions prior to KO's proposed 2-for-1 split scheduled for August.

- Suggested Positions (start with small positions) -
Mar 29, 2012 - entry price on KO @ 72.35, option @ 3.60
symbol: KO1418A75 2014 JAN $75 call - current bid/ask $ 6.00/ 6.15

06/30/12 new stop loss @ 71.80
05/14/12 sold half of our 2014 Jan $75 calls on Monday at the open
the bid opened at $6.20 (+72.2%)
05/12/12 prepare to sell half at the open on Monday morning to take some money off the table. Current bid is $6.55.
04/28/12 new stop loss @ 69.75
More conservative traders may want to take profits now, bid @ $5.90
04/25/12 KO's BoD has recommended a 2-for-1 split subject to shareholder approval in July. Split to occur in August.

Current Target: $87.00
Current Stop loss: 71.80
Play Entered on: 03/29/12
Originally listed on the Watch List: 03/17/12


Eli Lilly - LLY - close: 44.17

Comments:
07/21/12 update: LLY managed to hit another new multi-year high this past week. The stock has already started to see some profit taking. The $43 level should offer some short-term support. This coming week could actually spark more profit taking when LLY reports earnings on July 25th.

NOTE: I am suggesting we exit our 2013 Jan $45 calls at the open on Monday. Their current bid is $2.26.

We will adjust our exit strategy on the 2014 calls to exit when LLY hits $48.50.

I am not suggesting new positions at this time.

- Suggested (SMALL) Positions -
Jan 05, 2012 - entry price on LLY @ 39.50, option @ 1.19
symbol: LLY1319A45 2013 JAN $45 call - current bid/ask $ 2.26/ 2.31

- or -

Jan 05, 2012 - entry price on LLY @ 39.50, option @ 2.75
symbol: LLY1418A45 2014 JAN $45 call - current bid/ask $ 3.05/ 3.20

07/21/12 prepare to exit the 2013 Jan $45 calls on Monday morning
07/21/12 adjust exit target for 2014 calls to $48.50
06/30/12 new stop loss @ 39.75
06/23/12 LLY is hitting new multi-year highs.
06/09/12 new stop loss @ 38.75
04/25/12 LLY beat earnings estimates by 12c and raised guidance
03/17/12 LLY's close over $40.00 looks like a new bullish entry point
01/28/12 new stop loss @ 37.75

Current Target: $48.50 (2014)
Current Stop loss: 39.75
Play Entered on: 01/05/12

Originally listed on the Watch List: 12/17/11


Monsanto Co. - MON - close: 87.52

Comments:
07/21/12 update: It was a bullish week for MON with the stock surging almost four points to a new two-year high. Our plan was to open positions after MON closed above $85.25. Shares closed at $85.50 on July 16th. Our trade opened the next morning with MON at $85.84. At this point MON looks a little short-term overbought. Readers may want to wait for a dip near $85.00 again before initiating new positions.

Current stop loss is $79.90.

- Suggested Positions -
Jul 17, 2012 - entry price on MON @ 85.84, option @ 4.35
symbol: MON1319A90 2013 JAN $90 call - current bid/ask $ 5.10/ 5.20

- or -

Jul 17, 2012 - entry price on MON @ 85.84, option @ 6.50
symbol: MON1418A100 2014 JAN $100 call - current bid/ask $ 6.60/ 7.00

07/17/12 trade opens with MON at $85.84
07/16/12 MON closes above our entry requirement ($85.25)

Chart of MON:

Current Target: $99.50
Current Stop loss: 79.90
Play Entered on: 07/17/12
Originally listed on the Watch List: 07/14/12


Merck & Co - MRK - close: 43.41

Comments:
07/21/12 update: MRK hit another new multi-year high on Tuesday, trading over $44.00. Shares have since started to retreat. The stock is overbought and due for a correction. Thus, readers may want to consider an early exit now to lock in gains. MRK is going to report earnings soon on July 27th and the announcement might be an excuse to sell the stock to take profits.

I am not suggesting new positions at this time.

- Suggested Positions -
Jun 25, 2012 - entry price on MRK @ 39.91, option @ 3.14
symbol: MRK1418A40 2014 JAN $40 call - current bid/ask $ 5.20/ 5.30

07/14/12 new stop loss @ 39.49
07/14/12 Readers will want to seriously consider taking profits now.
MRK is at $43.47, option @ 5.15 (+93.9%)
06/25/12 MRK gap down at $39.91
06/22/12 MRK met our entry point requirement with a close over $40.00. Launch positions on Monday morning (conservative traders can wait for a dip to the 10-dma instead).

Current Target: $47.50
Current Stop loss: 39.49
Play Entered on: 06/25/12

Originally listed on the Watch List: 05/05/12


Microsoft - MSFT - close: 30.12

Comments:
07/21/12 update: MSFT managed a gain for the week but the action on Friday looks bearish. The company delivered a strong earnings report on July 19th. Wall Street was looking for earnings of 62 cents on revenues of $18.2 billion. MSFT delivered 73 cents with revenues coming in at $18.6 billion. This report came out on Thursday afternoon, after the close. Shares gapped open higher on Friday morning near $31.00 and promptly fell. The move on Friday is a failed rally near resistance at $31 and a bearish engulfing candlestick reversal pattern. I would expect a new short-term correction back to $29. I am not suggesting new positions at this time.

- Suggested Positions -
Jun 01, 2012 - entry price on MSFT @ 28.50, option @ 1.69
symbol:MSFT1319A30 2013 JAN $30 call - current bid/ask $ 1.84/ 1.87

- or -

Jun 01, 2012 - entry price on MSFT @ 28.50, option @ 3.05
symbol:MSFT1418A30 2014 JAN $30 call - current bid/ask $ 3.45/ 3.50

06/18/12 MSFT announces the "surface" line of tablets
06/01/12 triggered at $28.50
05/19/12 adjust the trigger to $28.50, stop to $26.45
05/05/12 adjust the trigger to $29.00
04/28/12 adjust buy-the-dip trigger to $29.50, stop to $26.75

Current Target: $32.75 & 34.75
Current Stop loss: 26.45
Play Entered on: 06/01/12
Originally listed on the Watch List: 04/14/12


Pepsico, Inc. - PEP - close: 69.96

Comments:
07/21/12 update: PEP has continued to consolidate sideways in the $69.50-71.00 range. I am expecting the stock to break out one way or the other following its earnings report on July 25th. I would wait to see how investors react to the earnings news before considering new bullish positions. Earnings estimates are at $1.09 a share.

- Suggested Positions -
Jul 02, 2012 - entry price on PEP @ 70.34, option @ 2.85
symbol: PEP1418A75 2014 JAN $75 call - current bid/ask $ 2.27/ 2.40

07/02/12 PEP opened at $70.34
07/02/12 launch positions at the open
06/29/12 PEP meets our entry requirement with a close above $70.25.

Current Target: $79.00
Current Stop loss: 65.75
Play Entered on: 07/02/12
Originally listed on the Watch List: 05/26/12


Pfizer Inc. - PFE - close: 23.70

Comments:
07/21/12 update: PFE is another watch list candidate that has graduated to our play list. The plan was to wait for PFE to close over $23.40 and then buy calls the next day. Shares met our requirement on the 17th with a close at $23.62. Our trade opened on the 18th with PFE at $23.53. The stock has been pretty strong the last seven days. Readers may want to wait for a dip back toward the $23.25-23.00 zone and buy calls there or wait until after the company reports earnings on July 31st and see how investors react to the news before initiating positions.

PFE is due to report earnings on July 31st.

Our long-term target is $28.00.

- Suggested Positions -
Jul 18, 2012 - entry price on PFE @ 23.53, option @ 1.30
symbol: PFE1418A25 2014 JAN $25 call - current bid/ask $ 1.24/ 1.32

07/18/12 trade opens. PFE @ 23.53
07/17/12 PFE meets our entry requirements (close over $23.40)
06/23/12 removed the 2013 call. We'll only play the 2014s
04/28/12 do not launch positions prior to the earnings report on May 1st.

Chart of PFE:

Current Target: $28.00
Current Stop loss: 20.95
Play Entered on: 07/18/12
Originally listed on the Watch List: 04/21/12


The TJX Companies - TJX - close: 44.31

Comments:
07/21/12 update: It was a quiet week for TJX with the stock churning sideways. Shares have drifted back to the $44.00 level. If the market starts to dip we can expect TJX to fall back toward technical support near its 50-dma around $42.50ish. Wait for a dip to the 50-dma before considering new positions. TJX is due to report earnings on August 14th.

- Suggested Positions -
Jun 20, 2012 - entry price on TJX @ 43.62, option @ 2.53
symbol: TJX1319A45 2013 JAN $45 call - current bid/ask $ 2.60/ 2.70

- or -

Jun 20, 2012 - entry price on TJX @ 43.62, option @ 5.10
symbol: TJX1418A45 2014 JAN $45 call - current bid/ask $ 5.10/ 5.30

07/05/12 TJX beats June same-store sales estimates and raises guidance
06/20/12 trade opens
06/19/12 TJX closed above our entry requirement (above $43.25)

Current Target: $49.75
Current Stop loss: 39.75
Play Entered on: 06/20/12

Originally listed on the Watch List: 06/16/12


Union Pacific Corp. - UNP - close: 119.60

Comments:
07/21/12 update: The last couple of days have been volatile for UNP. The company reported earnings on July 19th, before the opening bell. UNP delivered a profit of $2.10 a share on revenues of $5.22 billion. Analysts were expecting $1.96 on revenues of $5.23 billion. Shares rallied to new record highs with a breakout past resistance near $120 on this news. Our plan was to wait for UNP to close over $121.00 and then buy calls the next day. Our trade opened on Friday morning with UNP's gap open lower at $122.10. Friday's decline in UNP looks like it was a combination of the market's decline and a downgrade on the stock.

I would still consider new positions now or you could wait for a new bounce back above $121.00 again.

- Suggested Positions -
Jul 20, 2012 - entry price on UNP @ 122.10, option @ 3.80
symbol: UNP1319A130 2013 JAN $130 call - current bid/ask $ 3.00/ 3.25

- or -

Jul 20, 2012 - entry price on UNP @ 122.10, option @ 6.40
symbol: UNP1418A140 2014 JAN $140 call - current bid/ask $ 5.30/ 5.95

Chart of UNP:

Current Target: $139.00
Current Stop loss: 111.75
Play Entered on: 07/20/12
Originally listed on the Watch List: 06/30/12


U.S. Bancorp - USB - close: 33.60

Comments:
07/21/12 update: This U.S. banking stock has rallied to new multi-year highs. The company reported earnings on July 18th and beat estimates by a penny. Revenues also came in above expectations. Our plan was to wait for USB to close over $33.50, which happened on Thursday. Our trade opened Friday morning. I would still consider new positions now or you can wait for a dip into the $33.00-32.50 zone. Our long-term target is $39.50.

- Suggested Positions -
Jul 20, 2012 - entry price on USB @ 33.62, option @ 1.39
symbol: USB1319A35 2013 JAN $35 call - current bid/ask $ 1.34/ 1.39

- or -

Jul 20, 2012 - entry price on USB @ 33.62, option @ 3.10
symbol: USB1418A35 2014 JAN $35 call - current bid/ask $ 3.05/ 3.25

07/20/12 trade opens Friday morning
07/19/12 USB closes above our trigger <33.50
07/14/12 adjusted strategy: wait for a close over $33.50, stop 29.90
06/30/12 readers might want to consider an alternative entry point
06/23/12 adjust entry trigger to $29.00, stop to 26.40
06/02/12 adjust entry trigger to $28.00

Chart of USB:

Current Target: $39.50
Current Stop loss: 29.90
Play Entered on: 07/20/12
Originally listed on the Watch List: 05/19/12


Visa, Inc. - V - close: 125.75

Comments:
07/21/12 update: Both Visa and MasterCard rallied on Monday morning in reaction to news that the two companies had settled a seven-year lawsuit with U.S. merchants. The stock spent the rest of the week consolidating sideways and filled the gap with the Thursday-Friday dip. Now we are approaching Visa's earnings report coming up on July 25th. I would wait until after we see how the market reacts to Visa's earnings before considering new bullish positions.

Earlier Comments:
Our long-term target is $149.00 (although we'll likely exit our 2013 calls before V reaches our target).

- Suggested Positions -
JUL 03, 2012 - entry price on V @ 126.49, option @ 5.85
symbol: V1319A135 2013 JAN $135 call - current bid/ask $ 5.00/ 5.15

- or -

JUL 03, 2012 - entry price on V @ 126.49, option @ 11.95
symbol: V1418A140 2014 JAN $140 call - current bid/ask $10.40/11.10

07/16/12 V pops on news of a settlement in 7-year lawsuit
07/03/12 trade opens with Visa at $126.49
07/02/12 Visa closes above our trigger @ 125.50

Current Target: $149.00
Current Stop loss: 117.45
Play Entered on: 07/03/12
Originally listed on the Watch List: 06/30/12


Valero Energy - VLO - close: 25.54

Comments:
07/21/12 update: VLO continues to march higher and is now up seven weeks in a row. The breakout past resistance near $25.00 is bullish. However, I would not be surprised to see VLO churn sideways for a few days while investors wait for the company to report earnings on July 31st.

- Suggested Positions -
JUL 05, 2012 - entry price on VLO @ 24.90, option @ 2.54
symbol: VLO1319A25 2013 JAN $25 call - current bid/ask $ 2.78/ 2.83

- or -

JUL 05, 2012 - entry price on VLO @ 24.90, option @ 2.60
symbol: VLO1418A30 2014 JAN $30 call - current bid/ask $ 2.73/ 2.95

07/05/12 trade opened with VLO gapping down at $24.90
07/03/12 VLO closed at $25.01, above our trigger (24.50)
06/30/12 adjust entry strategy: wait for close over $24.50, stop 22.45

Current Target: $29.75
Current Stop loss: 22.45
Play Entered on: 07/05/12
Originally listed on the Watch List: 06/23/12


CLOSED Plays


Reynolds American Inc. - RAI - close: 46.12

Comments:
07/21/12 update: Last week we adjusted our exit strategy to close our RAI positions on Friday, July 20th. The long-term trend is up but RAI looks overbought here and due for a correction.

- Suggested Positions -
Nov 18, 2011 - entry price on RAI @ 40.02, option @ 2.00
symbol: RAI1319A42.5 2013 JAN $42.50 call - exit $4.00 (+100%)

07/20/12 planned exit on Friday at the close
07/14/12 new exit strategy: stop loss @ 44.90. We will plan to exit on Friday, July 20th at the closing bell
07/07/12 new stop loss @ 41.40, readers may want to take profits now!
06/16/12 RAI has broken out to new all-time highs. It could be time to look for new bullish positions. Consider the 2014 calls.
05/26/12 new stop loss @ 39.35
05/05/12 the oversold bounce is reversing. readers may want to exit lower
04/24/12 RAI reports earnings and misses. Shares spike lower!
03/10/12 another close over $42.50 could be used as a bullish entry point.
01/28/12 RAI and the rest of the tobacco stocks are underperforming. Readers might want to exit early now given RAI's relative weakness.

Chart of RAI:

Current Target: $49.00
Current Stop loss: 44.90
Play Entered on: 11/18/11
Originally listed on the Watch List: 10/22/11


UnitedHealth Group - UNH - close: 55.41

Comments:
07/21/12 update: Last weekend we decided to throw in the towel on UNH and exit positions Monday morning (July 16th). UNH opened at $55.18 on Monday.

- Suggested Positions -
Feb 15, 2012 - entry price on UNH @ 54.53, option @ 3.25
symbol: UNH1319A60 2013 JAN $60 call - exit $2.08 (-56.2%)

- or -

Feb 15, 2012 - entry price on UNH @ 54.53, option @ 5.00
symbol: UNH1418A60 2014 JAN $60 call - exit $5.25 (+ 5.0%)

07/16/12 closed on Monday morning
07/14/12 exit at the open on Monday
07/07/12 UNH is acting weak. Readers may want to exit early
06/28/12 The U.S. Supreme Court upheld Obamacare's new healthcare law. UNH experienced some sharp intraday volatility
06/09/12 Investors might want to consider buying short-term July puts to protect yourself from a negative reaction to the upcoming Court decision.
05/26/12 Don't forget - the Supreme Court ruling on Obamacare is in June
04/19/12 UNH reported earnings that beat estimates and raised guidance
03/31/12 new stop loss @ 52.75. Adjust exit to $64.00
03/24/12 action this past week has turned bearish. expecting a correction toward the $50 area.

Chart of UNH:

Current Target: $64.00
Current Stop loss: 52.75
Play Entered on: 02/15/12

Originally listed on the Watch List: 02/11/12



Watch

REITs & Media

by James Brown

Click here to email James Brown

Editor's Note:

Our watch list has been working very well lately. We had five candidates make the jump to our active trade list this past week.



New Watch List Entries

HCP - HCP, Inc.

TWX - Time Warner


Active Watch List Candidates

CAT - Caterpillar Inc.

CLX - The Clorox Co.

DIS - Walt Disney Co.

JPM - JPMorgan Chase

SBUX - Starbucks Corp.


Dropped Watch List Entries

CVS, MON, PFE, UNP, USB all graduated to the play list.

I have removed SYK.



New Watch List Candidates:


HCP, Inc. - HCP - close: 45.19

Company Info

HCP is a REIT focused on the healthcare industry. Many of the REITs have been showing relative strength. HCP has rallied to new record highs. We don't want to chase it here. I am suggesting we buy calls on a dip at $42.00. The pullback may not happen immediately but HCP is due to report earnings on July 31st and the news could spark some profit taking.

If triggered on a dip at $42.00 we'll use a stop loss at $39.45. Our long-term target is 48.50 but that might be too optimistic since HCP does not have 2014 calls.

Buy-the-Dip trigger: $42.00 (stop loss 39.45)

BUY the 2013 Jan $45 call (HCP1319a45) current ask $2.35

Chart of HCP:

Originally listed on the Watch List: 07/21/12


Time Warner - TWX - close: 38.86

Company Info

Shares of this media giant have rallied to new multi-year highs. Yet TWX remains under resistance near $40.00. I am suggesting we wait for TWX to close over $40.50 and then buy calls the next day. I prefer the 2014 calls over the 2013 ones.

FYI: TWX is due to report earnings on August 1st.

Breakout trigger: Wait for a close over $40.50 (stop 37.25)

BUY the 2013 Jan $42 call (TWX1319A42) current ask $0.97

- or -

BUY the 2014 Jan $45 call (TWX1418A45) current ask $2.06

Chart of TWX:

Originally listed on the Watch List: 07/21/12


Active Watch List Candidates:



Caterpillar Inc. - CAT - close: 80.95

Comments:
07/21/12 update: CAT managed an oversold bounce off its July 12th lows but shares remain in a down trend. That might change if the company beats the earnings estimate or raises guidance. CAT is due to report earnings on July 25th, before the opening bell.

The stock currently has technical resistance at its 50-dma near $86.40. I am adjusting our entry point requirements. Instead of waiting for a close over $90.50 we will launch positions if CAT can close over $88.00 instead. We'll adjust the stop loss to $79.90.

Our long-term target is the $110-115 zone (although we'll exit the 2013 calls before CAT hits our final target).

Breakout trigger: Close over $88.00, stop loss @ 79.90

BUY the 2013 Jan $95 call (CAT1319A95)

- or -

BUY the 2014 Jan $100 call (CAT1418A100)

07/21/12 adjusted entry point to wait for a close over $88.00, stop loss 79.90

Originally listed on the Watch List: 07/07/12


The Clorox Co. - CLX - close: 72.74

Comments:
07/21/12 update: CLX has been consolidating sideways all week as it flirts with short-term resistance in the $73.50 area. I don't see any changes from my prior comments. I am suggesting we wait for CLX to close over $75.50 and then buy calls the next day.

FYI: CLX has a strong 3.5% dividend yield. The next dividend payment is August 9th with the stock trading ex-dividend on July 23rd, 2012. It should be about 64 cents.

NOTE: CLX is due to report earnings on Aug. 2nd.

Breakout trigger: Wait for a close over $75.50 (stop 71.75)

BUY the 2013 Jan $75 call (CLX1319A75)

- or -

BUY the 2014 Jan $80 call (CLX1418A80)

Originally listed on the Watch List: 07/14/12


Walt Disney Co. - DIS - close: $48.59

Comments:
07/21/12 update: Media giant DIS continues to march higher. Shares rallied toward resistance near $50 this past week. If you look at the weekly chart this pullback from $50 looks like a potential top. Since my market outlook is still bearish I would expect DIS to correct soon.

I am suggesting we buy call LEAPS on a dip at $45.00 with a stop loss at $41.75. Our long-term target is $54.50.

Buy-the-Dip trigger: $45.00 (stop 41.75)

BUY the 2014 Jan $50 call (DIS1418A50)

Originally listed on the Watch List: 06/16/12


JPMorgan Chase - JPM - close: 33.90

Comments:
07/21/12 update: Hmm... There was no follow through on the July 13th rally. JPM has been slowly slipping lower all week. It looks like shares might resume their down trend. We are going to reinstate the buy-the-dip entry near $30 plan.

Buy calls on a dip at $30.25 with a stop loss at $27.75. I prefer the 2014 calls but more aggressive traders could use the 2013 calls instead.

Buy-the-Dip trigger: $30.25 (stop loss @ 27.75)

BUY the 2013 Jan $33 call (JPM1319a33)

- or -

BUY the 2014 Jan $35 call (JPM1418A35)

Originally listed on the Watch List: 05/19/12


Starbucks Corp. - SBUX - close: 51.96

Comments:
07/21/12 update: SBUX was sort of churning higher most of the week but gave it all back with a -4.1% plunge on Friday. The stock is once again testing support near $51 and its 150-dma. I don't see any changes from my prior comments.

SBUX has been stuck in a $51-56 trading range. Wait for a close over $56.25 and then buy calls the next day with a stop loss at $50.75. Our long-term target is $69.00.

FYI: Earnings are July 26th.

Breakout Trigger: wait for a close over $56.25, stop loss 50.75

BUY the 2013 Jan $60 call (SBUX1319A60)

- or -

BUY the 2014 Jan $65 call (SBUX1418A65)

06/30/12 adjust strategy to wait for a close over $56.25, new stop @ 50.75, adjust option strikes.
05/19/12 adjust stop loss to $45.75

Originally listed on the Watch List: 05/05/12


Stryker Corp. - SYK - close: 51.38

Comments:
07/21/12 update: It was an ugly week for SYK with shares falling on its earnings report. The company missed estimates by a penny. The close under support near $52 and its 200-dma is bearish. Our plan was to wait for SYK to close over $56.50 but that's unlikely to happen any time soon.

I am removing SYK from the watch list.

07/21/12 removed from the watch list.

Originally listed on the Watch List: 06/30/12