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VLO $46.33 - Valero

That was an ugly week. Valero hit a new 4-week high on Tuesday at $54 and then collapsed to trade at $46.27 at Friday's close. The problem was the high price of oil. With prices that high the crack spreads go to zero because they can't raise the price of gasoline fast enough to compensate for the spike. I set the stop at $45.

Breakout trigger: $51 hit 5/19
Position: 2010 $60 LEAP YPY-AL @ $7.20

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PDE $44.78 +0.84 Pride International

Merrill upgraded them on Friday to a buy with a $55 price target saying they were still not being valued as a deep-water play. They also mentioned the takeover potential.

Zacks recently reiterated a buy rating on PDE on Friday based on their $9.4 billion backlog and their emergence as a pure play deepwater driller. They have sold off their non-core assets to leverage the deepwater play. The market is still valuing them as a shallow water jackup play and they are no longer in that sector. They are a strong takeover target given their small size and sector.

Position: Jan 2009 $50 Call PDE-AJ @ $3.70

I went with a Jan call instead of a LEAP because an acquisition would limit LEAP appreciation. I wanted to be close to the current price with a cheap option.

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FWLT $75.76 -.41 Foster Wheeler

Still holding the high ground on no news. No complaints!

Breakout trigger: $71 Hit 5/13

Position: 2010 $80 LEAP Call LWM-AP @ $16.80

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CRR $54.20 +6.51 - Carbo Ceramics

Carbo rallied sharply on news that Smith industries (SII) was buying W-H Energy (WHQ) for $3.2 billion. CRR is a major take over target.

Breakout trigger: $48 Hit 5/12

Position: Dec $50 Call CRR-LJ @ $5.80

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JEC $88.67 -6.11 Jacobs Engineering

The gains from the prior weeks have been reversed and JEC broke strong support at $90 on Friday. I am hoping it was just the market forces on a black Friday. I lowered the stop to $85 with support at $86.

Breakout trigger: $90 Hit May 5th

Position: 2010 $100 LEAP Call WEU-AT @ $16

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PBR $68.07 -2.43 Petrobras

Petrobras declined early in the week after news broke that estimated the cost of drilling the Tupi field at between $100 billion and $250 billion. That is a monster expense but 33 billion barrels of recoverable oil would be worth $4.5 trillion at today's prices. Brazil is even going to acquire a $600 million nuclear submarine to protect the fields and drilling platforms.

I suspect that once the field is proven beyond a shadow of a doubt they will have no trouble raising the money.

Every dip is a buying opportunity.

** See portfolio listing for any stop loss **

Breakout trigger: $125.50 hit 4/28

Position: 2010 $150 LEAP Call YMO-AV @ $22.10

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NE $63.19 +.05 - Noble Corp

Noble rallied off the RBC conference presentation and was up strong on Friday morning before profit taking sent them fractionally negative. No complaints!

Noble recently won a $4 billion contract to drill for Petrobras off the coast of Brazil. This is a monster payday and just one area of exploration for Noble.

** See portfolio listing for any stop loss **

Breakdown trigger $56.00 hit 4/29

Position: 2010 $70 LEAP Call YVJ-AN @ $8.10

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RIG $143.50 -6.69 - Transocean *** Stopped ***

RIG has fallen $20 over the last 3 weeks on no news. Everybody is recommending them but the pain continues. Stopped at $145 on Tuesday.

Breakdown trigger: $150 Hit 4/29

Position:
Long 2010 $170 LEAP Call YDR-AN @ $24.00 exit 22.85, -1.15
Shrt 2010 $230 LEAP Call YDR-AW @ $8.50 exit 9.50, -1.00

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NOV $83.57 +.25 - National Oilwell Varco

Down $2.34 on Friday but was up for the week giving us a breakeven. On a -400 point day that is good for me. Zacks reiterated their buy on NOV and raised their price target to $100.

** See portfolio listing for any stop loss **

Breakdown trigger: $67 Hit 4/30

Position: NOV $80 Call NOV-KP @ $5.40

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FLS $134.34 -4.18 - Flowserve

No news and the -$4 for the week only put them at the bottom of recent support after their $15 gain back in May.

** See portfolio listing for any stop loss **

Breakout trigger: $110 Hit 4/16

Position: OCT $120 Call FLS-JD @ $10.40


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Covered LEAP Calls
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AAPL $185.64 -3.11 Apple Inc *** Covered LEAP Call ***

Apple is expected to announce the 3G iPhone at 10:AM on Monday. The hype will be huge and we are so deep in the money it will not make any difference.

No change. Over $150 we are at max profits.

Position:
Long: AAPL @ open of $177.52 (Jan-14th open)
Short: 2009 $150 LEAP Call VAA-AW (APV-AJ) @ $20.80
Breakeven: AAPL @ $136.12

Position changes:
Closed $200 LEAP Short @ $9.40 ($30.00 - 9.40 = gain +20.60)
Replaced with $150 LEAP short @ $20.80
AAPL cost basis $177.52 - $41.40 (20.60 + 20.80) = 136.12
Breakeven: AAPL @ $136.12

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RIMM $131.41 -7.46 Research in Motion

RIMM gained +7 last week and lost $7 this week. No problem, we are at max profits.

No change. We are at max profits over $110.

If we continue holding the position until January and let it get called away your profit will be $34.80 when the stock is called away for $110.

Alert entry 11/12 @ $102.60

Covered LEAP Call:

LONG RIMM @ $102.60 (cost $102.60 -9.10 $150 LEAP = 93.50)
SHORT 2009 $110 LEAP Call VHO-AB @ $18.30 on 1/14/08

Closed: 1/14
SHORT 2009 $150 LEAP Call XTB-AJ @ $18.50, close $9.40 +9.10
 

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