Dropped Plays


CRS, DBA, and HES have all hit our stop loss.


Play Updates


Editor's Note:

My strategy comments from last week still apply. The S&P 500 looks poised to move lower after breaking support at 880. Readers will want to consider buying short-term puts (August puts, not Julys) on their individual holdings or on the S&P 500 as a hedge against any serious sell-off.


ACGY $ 9.14 -0.26 -- Acergy S.A.

It was a rough week for ACGY with a big drop last Monday. Shares have been bouncing from the $9.00 level the last few days. With the S&P 500 on the verge of a significant breakdown I'm not suggesting new positions in ACGY. Should the market and ACGY sell-off we can look for potential support near $8.00 (and its 100-dma) and near $7.00 (near its 200-dma). Investors need to be aware that ACGY is expected to report earnings on Wednesday, July 15th but it's still an unconfirmed date.

Investors are nervous about earnings this season. I am suggesting that to protect ourselves we by an appropriate amount of July $7.50 puts. I would wait to buy them on Tuesday afternoon just before the close. They're currently bid/ask .00/0.10. They could even be cheaper on Tuesday. This way if ACGY reports an earnings disaster and the stock sells off sharply we're somewhat protected. If they don't then these puts will expire worthless. If ACGY sells off and the puts rise in value we want to sell them for a profit before Friday's closing bell (expiration).

I'm not suggesting new LEAPS positions at this time. Our stop is at $6.95. Our plan is to exit in the $14.50-15.00 zone.

April 25th, 2009 - entry price on ACGY @ 7.61, option @ 1.05
symbol: QLS-AB, 2010 JAN $10 LEAP call - current bid/ask $1.20/1.50
-stop loss on ACGY @ 6.95

Chart of ACGY


ACI $14.26 -0.09 -- Arch Coal Inc.

ACI almost hit our stop loss last Wednesday. The sell-off in oil is affecting the rest of the energy sector and coal stocks are plunging. ACI dipped to $13.00 on Wednesday and tested its longer-term trendline of higher lows. Will this hold as support? It might but if the S&P 500 really begins to breakdown odds are good we'll be stopped out. On the other hand crude oil looks very oversold here and is due for a bounce, which should boost energy stocks. The Point & Figure chart has turned bearish and is currently forecasting a $7.00 target.

More aggressive traders may want to move their stop loss under the late April low ($12.52) or the early March low ($11.77). I am not suggesting new bullish positions at this time but we'll be watching for a bounce from its trendline (see chart). FYI: If you do open new positions I would buy the $15 or $20 strikes instead.

FYI: ACI is due to report earnings on July 24th.

May 14th, 2009 - entry price on ACI @ 16.00, option @ 1.30
symbol: ACI-AE, 2010 JAN $25 LEAP call - current bid/ask .25/0.35
-stop loss on ACI @ 12.85

-or-

May 14th, 2009 - entry price on ACI @ 16.00, option @ 2.40
symbol: OSE-AF, 2011 JAN $30 LEAP call - current bid/ask .80/1.10
-stop loss on ACI @ 12.85

Chart of ACI:


BAC $11.88 -0.09 - Bank of America Corp.

Financial stocks could see a lot of volatility this week as we start to see second quarter earnings results. BAC will report on Friday morning (July 17th) before the market opens. Since that is also the last day July options are trading if offers a unique opportunity to protect ourselves. I don't know where BAC is going to be trading on Thursday but I would strongly consider buying a slightly out of the money put for pennies at the close on Thursday. That way if BAC disappoints and surges lower we can profit from the quick move and offset some of the losses in our longer-term position. If BAC trades higher on earnings then we didn't spend much on our puts and they expire worthless.

I'm not suggesting new LEAPS positions at this time. Wait and watch for a potential correction toward $10.00 or even the $9.00 (50% retracement) level.

I want to remind readers that this is a long-term, two-year trade. Our exit target is the $30-40 zone.

Jan 25th, 2009 - entry price on BAC @ 6.24, option @ 2.38
symbol: VBA-AB, JAN 2011 $10 LEAP call - current bid/ask $4.55/4.65
-stop loss on BAC @ none.

Chart of BAC


CRM $37.26 +0.44 -- Salesforce.com

I remain concerned over the new trend of lower highs and lower lows developing on CRM. Shares dipped toward support near $35.00 last week and the oversold bounce was fueled by very, very low volume. Once again I'm suggesting readers consider an early exit. If the NASDAQ continues to correct then CRM will likely break support at $35.00. There is potential support at $32.50, which is why we have our stop at $32.45. I am not suggesting new LEAPS positions at this time. Traders may want to consider raising their stop closer to $35.00 if you not interested in exiting early. Our exit target to sell our LEAPS position is $49.00.

April 1st, 2009 - entry price on CRM @ 30.00, option @ 4.30
symbol: CRM-AH, JAN 2010 $40 LEAP call - current bid/ask $3.80/4.00
-stop loss on CRM @ 32.45.
(note: readers have reported getting a better entry price than $4.30)

-or-

April 1st, 2009 - entry price on CRM @ 30.00, option @ 2.00
symbol: CRM-AI, JAN 2010 $45 LEAP call - current bid/ask $2.05/2.20
-stop loss on CRM @ 32.45.

Chart of CRM:


DBC $20.74 -0.16 -- PowerShares DB Commodity Index (ETF)

The same sell-off in commodities that closed our play on the DBA pulled the DBC down to our entry point in the $21.50-20.00 zone. This is a long-term bet on a rise in demand for commodities and weakness in the U.S. dollar. I'm setting our stop loss at $18.90. More conservative traders may want to consider a stop closer to $20.00. I would still consider opening new positions in the $20-21 zone but look for signs of a bounce first. Considering the market's weakness the better bet would be to wait for a dip near $20.00 and then look for a bounce. Our long-term target is $30.00.

FYI: The DBC is an ETF on the Deutsche Bank Liquid Commodity index using futures on light sweet crude oil, heating oil, aluminum, gold, corn and wheat.

July 6th, 2009 - entry price on DBC @ 21.50, option @ 4.28
symbol: VCZ-AT, 2011 JAN $20 LEAP call - current bid/ask $3.50/4.10
-stop loss on DBC @ 18.90.

-or-

July 6th, 2009 - entry price on DBC @ 21.50, option @ 2.62
symbol: VCZ-AY, 2011 JAN $25 LEAP call - current bid/ask $1.85/2.15
-stop loss on DBC @ 18.90.

Chart of DBC:


DO $77.95 -0.11 -- Diamond Offshore

As expected DO did slip to the $75.00 level. Oil and oil service stocks have actually tried to bounce late last week in spite of the ongoing sell-off in crude oil futures. Overall the short-term trend is still down and unfortunately we're still long the 2010 Jan. $100 calls. We wanted to exit these on a bounce near $81.00 but the bounce hasn't happened yet. If DO hits $81.00 before it hits $72.50 we'll exit this position. Otherwise we'll keep it.

Right now the plan is to buy LEAPS again on a dip in the $72.50-70.00 zone. However, considering the market's recent weakness investors would be better off to wait for the dip and then look for a bounce up and out of this zone to launch positions. If DO does hit our new trigger at $72.50 I would buy the 2010 Jan. $80 LEAPS or the 2010 $90 LEAPS. We'll use a stop at $67.45, which might be a little tight but I'd rather limit our risk. We want to sell our position at $99.00.

July 2nd, 2009 - entry price on DO @ 80.08, option @ 7.30
symbol: KWJ-AT, 2010 JAN $100 LEAP call - current bid/ask $3.50/4.00
- stop loss on DO @ 67.45

**We want to sell these on a bounce at $81.00 to cut our losses early.

-NEW- Buy the dip trigger: $72.50

BUY 2010 JANUARY $80 CALL (symbol: KWJ-AP)
-or-
BUY 2010 JANUARY $90 CALL (symbol: KWJ-AR)

Chart of DO:


DXO $3.48 -0.12 -- Deutsche Bank Double-long Oil ETN

The sharp correction in oil naturally hit the DXO pretty hard. This double-long ETF has pulled back toward potential support near $3.50. I am suggesting readers buy this dip in the $3.50-3.00 zone. Since oil has shown no signs of slowing down you might want to wait for the lower half of that range (3.25-3.00) as your entry point.

Prior comments on this play:
The DXO is our long-term oil position. When we say long-term we're talking two or three years (or more). Currently the plan is to build a long-term position averaging down on dips. The $2.50 region is the sweet spot to buy the DXO. Anything under $2.50 is a gift. I want to repeat that this is not a trade. It's a multi-year investment. Currently our exit target is the $25.00 to $30.00 zone.

The Crude oil double-long ETN (exchange-traded note) offers investors two times the leveraged exposure to the monthly performance of the Deutsche Bank optimum yield crude oil index plus the monthly TBill index return.

Basically, when oil was $147 a barrel this ETN was $29.65. If oil returns to the $150 range over the next few years this ETN could rally to $30 for a 1500% return. This ETN does not expire. It can be used in IRAs and has no margin requirements like crude oil futures.

ETN Info:

Deutsche Bank ETN Fact Sheet

Deutsche Bank Pricing Description

Our plan called for buying this ETN instead of the options.

Current position in the DXO = $2.15 entry (no stop loss at this time)

Chart of DXO


ERTS $20.97 +0.16 -- Electronic Arts

Thus far support at the $20.00 level is holding but with the consumer still struggling I'm suspect anything related to the consumer discretionary sector will see more weakness ahead. I am not suggesting new positions at this time.

We have two targets. We want to take part of the position off the table at $29.00. Take the rest off at $34.00.

April 20th, 2009 - entry price on ERTS @ 18.00, option @ 1.08
symbol: WZW-AE, JAN 2010 $25 LEAP call - current bid/ask $1.20/1.35
-stop loss on ERTS @ 17.95.

-or-

April 20th, 2009 - entry price on ERTS @ 18.00, option @ 0.70
symbol: WZW-AF, JAN 2010 $30 LEAP call - current bid/ask .35/0.45
-stop loss on ERTS @ 17.95.

Chart of ERTS:


FAS $37.46 -1.44 - Direxion Fincl.Bull 3x ETF

Nope. Sorry. We did not just make a 400% gain last week. Direxion, the company who launched these triple-leveraged ETFs decided to do a 1-for-5 reverse split on the FAS and a 1-for-10 reverse split on the FAZ, which is the triple-leveraged inverse financial ETF. On Thursday morning the value of the FAS went from $7.50 to $39.00. If you want all the details here is a link to the company's press release for this reverse split: http://www.direxionshares.com/pdfs/RS_070209.pdf

Now instead of expecting a dip towards $6.00 we can look for a dip towards $30.00. I'm not suggesting new bullish positions at this time.

Note: We're going to start to see some earnings out of the financial sector this week and we can expect a lot of volatility as investors digest the news.

Currently we have sold one third of our position at $12.00 (post-split price of $60.00) and we plan to sell another third at $120.00. We'll re-evaluate our final target for the last third of our position as needed.

The triple-leveraged FAS is based off the $RIFIN index. The $RIFIN has broken through significant resistance at the 600 level this past week. Broken resistance should start acting as new support.

Our plan called for buying the ETF instead of the options.

Current position in the FAS = $2.64 entry (stop loss: 2.64)
post-split prices are: $13.20 entry (stop loss: 13.20)

Exit 1/3 position @ 12.00 (+354%) /post-split: 60.00

Chart of FAS

Chart of RIFIN (Russell 1000 financial services)


FCX $46.64 -0.05 - Freeport McMoran

There are two opposing patterns in FCX. First is the longer-term bullish up trend of higher lows. Second is the bearish head-and-shoulders pattern that has formed over the last two months. Furthermore the recent weakness has been fueled by strong volume. Which pattern will prevail? I warned readers about the H&S pattern in FCX and if it closes under $45.00 it could portend a drop all the way down to $30.00.

I am not suggesting new bullish LEAPS positions and considering the weak posture of the wider market more conservative traders may want to just exit early right now and cut their losses. Our long-term target is $69.00.

FYI: Earnings are due out on July 21st.

June 22nd, 2009 - entry price on FCX @ 46.00, option @ 6.00
symbol: FCX-AK, 2010 JAN $55 LEAP call - current bid/ask $4.65/4.80
-stop loss on FCX @ 39.45
-or-
June 22nd, 2009 - entry price on FCX @ 46.00, option @ 10.00
symbol: OBQ-AL, 2011 JAN $60 LEAP call - current bid/ask $ 7.70/ 7.95
-stop loss on FCX @ 39.45

Chart of FCX:


FSLR $143.10 -3.01 -- First Solar

Support? What support? FSLR didn't see any support where it should have near $160 and the $150 levels. Solar energy stocks have been plunging in the wake of oil's decline. Now FSLR is back under its 200-dma again. We are not suggesting new positions.

Here's a repost of our April 30th, 2009 trade recap:

The covered-call trade is now at maximum profit. We bought FSLR at $128.00 and sold the 2010 $150 LEAP for $40.70. After the April 30th move odds are almost guaranteed that we'll be called out but we have to leave it in our portfolio until we are. Profit if called is $40.70 for the call option we sold and a $22 rise in the stock price (from $128 to $150). Together that's a $62.70 gain on a $128 investment (+48.9%).

Our put-spread play is a position we plan on holding until expiration in January 2010. We bought the 2010 $100 LEAP put for $32.90. We sold the 2010 $250 LEAP put for $135.70. Our net credit was $103 into our account. If you covered on April 30th by buying back the $250 LEAP put (at the time trading around $80.00) our profit would only be about $23.00. That's not our plan. We're holding this position until January 2010 and will buy back the $250 LEAP put then with the expectation it will be worth even less (as the stock continues to climb).

Covered Call position:

Long 100 shares of FSLR @ $128.00
Short 2010 $150 LEAPS Call LZL-AA @ $40.70
Profit if called is $40.70 in option premium + $22 in stock (+49%)

Put Spread position:

Long 2010 $100 LEAPS Put LQM-MT @ $32.90
Short 2010 $250 LEAPS Put LZL-MJ @ $135.70, net credit $103

Currently the 2010 Jan. $100 put is worth $7.60.
The 2010 Jan. $250 put is worth $107.00.
If you're curious the 2010 Jan. $150 call is at $21.40.

Chart of FSLR


GLBL $5.18 -0.07 -- Global Industries

The trend in oil service stocks has been down as oil crashes. GLBL is testing the $5.00 level, which should offer some round-number, psychological support. The new trend is bearish and unless you're willing to endure a drop back toward the $4.25-4.00 zone I suggest readers take profits now. FYI: The Point & Figure chart has turned bearish and is forecasting a $2.00 target.

I am not suggesting new bullish positions at this time. Please note that our stop loss is at $3.95. Readers might want to consider the use of a higher stop loss or an early exit to lock in a gain. Our target to exit is $8.85.

Our plan called for buying the stock instead of the options. Our entry point to buy GLBL was hit on January 6, 2009

Current position in GLBL = $4.10 entry (stop loss: 3.95)
Current target to exit is $8.85.

Chart of GLBL:


GT $10.98 +0.27 -- Goodyear Tire & Rubber Co.

GT has tested round-number support at $10.00 and bounced. Unfortunately the new three-week trend is a bearish one and it's shaping up to be a bearish channel. I'm not suggesting new positions at this time. The recent weakness was enough to reverse the P&F chart into a new sell signal with a $6.00 target. Our long-term target is $25.00.

June 6th, 2009 - entry price on GT @ 12.94, option @ 2.20
symbol: GT-AC, 2010 $15 LEAP call - current bid/ask .65/0.75
-stop loss on GT @ 9.90.
-or-
June 6th, 2009 - entry price on GT @ 12.94, option @ 2.65
symbol: VYR-AD, 2011 $20 LEAP call - current bid/ask .75/1.10
-stop loss on GT @ 9.90.

Chart of GT:


HOS $19.80 -0.13 -- Hornbeck Offshore Services

Continuing weakness in oil and the energy stocks is not good news for our HOS play. Oil service stocks tend to be higher-beta names, which means they're more volatile. Right now HOS is hovering around the $20.00 level and its converging 100-dma and 200-dma. Sadly these are now acting as overhead resistance. I am not suggesting new LEAPS positions at this time. The stock should have additional support at $18.00, which is why our stop loss is at $17.85. Our long-term target is $35.00.

June 27th, 2009 - entry price on HOS @ 21.20, option @ 4.90
symbol: WVG-AD, 2010 JAN $20 LEAP call - current bid/ask $3.10/3.90
-stop loss on HOS @ 17.85
-or-
June 27th, 2009 - entry price on HOS @ 21.20, option @ 2.70
symbol: WVG-AE, 2010 JAN $25 LEAP call - current bid/ask $1.65/1.95
-stop loss on HOS @ 17.85

Chart of HOS:


INTC $16.04 +0.02 -- Intel Corp.

Investors should be a little concerned about the semiconductors. Without strength in the semis the tech sector and the NASDAQ are going to struggle. That might change if Intel can put a positive spin on their earnings report. Intel is due to report earnings on Tuesday, July 14th after the closing bell. Wall Street expects a profit of 8-cents a share. Traders might want to consider buying a little protection. July options expire after Friday. We can probably buy the July $15 puts for 10-cents (or less) on Tuesday. If Intel disappoints shares will probably drop toward $15.00 and we can easily make a profit on the puts to offset any temporary losses in the LEAPS. If Intel rises then the LEAPS expire worthless and we didn't spend much.

I'm not suggesting new LEAPS positions until after we see how the stock reacts to earnings. Our target is the $24-26 zone.

FYI: Shares of Intel don't move very fast. Readers might want to consider turning this play into a calendar spread to further maximize your gains.

June 13th, 2009 - entry price on INTC @ 16.31, option @ 1.36
symbol: VNL-AD, 2011 LEAP $20 call - current bid/ask $1.27/1.35
-stop loss on INTC @ 14.40.

Chart of INTC:


JOYG $31.14 -0.42 -- Joy Global Inc.

Commodities and related stocks have suffered a lot over the last few weeks. Shares of JOYG have rolled over into a new down trend. Concerns over the pace of the economic rebound and a sideways move in the dollar have left copper prices tumbling. I would not be surprised to see JOYG dip toward $27.50 and its rising 100-dma. If you're looking for a new bullish entry point then wait for a dip near $28.00-27.50. I would also consider buying the $35 LEAPS instead. Our stop loss on this play is at $24.75. Our first target is $48.50.

June 22nd, 2009 - entry price on JOYG @ 33.00, option @ 3.80
symbol: JQY-AH, 2010 JAN $40 LEAP call - current bid/ask $2.35/2.55
-stop loss on JOYG @ 24.75
-or-
June 22nd, 2009 - entry price on JOYG @ 33.00, option @ 6.90
symbol: ZMC-AH, 2011 JAN $40 LEAP call - current bid/ask $5.40/6.00
-stop loss on JOYG @ 24.75

Chart of JOYG:


KSU $15.46 +0.31 -- Kansas City Southern

The transportation index and the railroad sector is struggling with overhead resistance at the 200-dma and a new trend of lower lows. Investors are worried that the economic recovery is too slow and that shipments are down. Rival railroad company CSX reports earnings on Monday, July 13th after the closing bell. Their results and guidance could have a big impact on KSU. I am not suggesting new LEAPS positions at this time. Our long-term target is the $27.50-30.00 zone.

May 9th, 2009 - entry price on KSU @ 17.01, option @ 0.90
symbol: LJR-AE, 2010 LEAP $25 call - current bid/ask .25/0.35
-stop loss on KSU @ 13.90.

Chart of KSU:


MDR $16.89 -0.44 - McDermott Intl. Inc.

The correction in MDR has been very painful with shares off 33% from their recent highs. Last week I warned readers to expect a dip toward $16.00 and that's what MDR delivered. This is probably a new bullish entry point but until we see some show of strength I'm not suggesting new positions at this time. I'm adjusting our stop loss to $14.75. Our target to exit is a move into the $30.00-35.00 zone.

April 4th, 2009 - entry price on MDR @ 15.56, option @ 2.70
symbol: MDR-AD, 2010 $20 LEAP call - current bid/ask $1.75/1.85
-stop loss on MDR @ 14.75.

Chart of MDR:


MSFT $22.39 -0.05 -- Microsoft Corp.

There has been a lot of positive talk about how the coming release of Windows 7 will spark a new hardware cycle upgrade just in time for what should be the recovery in 2010. That's great news for MSFT. However, short-term the market looks weak. Readers may want to wait for a dip near $20.00 before launching new LEAPS positions.

This is going to be a very long-term play as MSFT doesn't move very fast in spite of its recent performance. My long-term target is the $30 region.

June 2nd, 2009 - entry price on MSFT @ 21.60, option @ 2.20
symbol: VMF-AE, 2011 Jan. $25 call - current bid/ask $2.46/2.54
-stop loss on MSFT @ 18.40.

Chart of MSFT:


MT $29.70 -0.17 -- ArcelorMittal

Steel and metal stocks are breaking down as investors grow concerned about a double-dip recession and the slow pace of recovery. We could easily see MT dip back toward the $25.00 level. I'm not suggesting new positions at this time. Our long-term target is the $50 region. We'll use a stop loss at $24.45.

June 17th, 2009 - entry price on MT @ 30.50, option @ 2.70
symbol: LLU-AH, JAN 2010 $40 call - current bid/ask $2.35/2.45
-stop loss on MT @ 24.45.

-or-

June 17th, 2009 - entry price on MT @ 30.50, option @ 2.00
symbol: LLU-AJ, JAN 2010 $50 call - current bid/ask .60/0.80
-stop loss on MT @ 24.45.

Chart of MT:


NYX $24.44 +0.37 -- NYSE Euronext

Some of the exchange stocks have been getting crushed on fears of tighter regulations. NYX wouldn't be affected to the extent that ICE or CME would be but shares are still trading lower. Last week I told readers to expect a breakdown and a dip near $23.50. NYX did break but only traded to $23.70. This could be support but I'm not suggesting new positions at this time. The market still looks vulnerable. I'd rather wait for a dip near $22.00-21.00 before considering new positions. Our long-term target is the $35.00-40.00 zone.

Apr. 11th, 2009 - entry price on NYX @ 21.51, option @ $1.81
-- YVX-AU, 2010 $30.00 LEAP call - current bid/ask $1.57/1.61
-stop loss on NYX at $19.95

Chart of NYX:


PBR $36.25 -0.01 -- Petroleo Brasiliero

Oil stocks have been hit very hard as oil plunges on demand fears. PBR has broken its longer-term bullish up trend and is now testing support near $35.00 and its 100-dma. Since oil shows no signs of slowing down I would wait for a dip near $31.00-30.00 before considering new LEAPS positions on PBR. If we do launch new positions near $30 I would buy the $35 or $40 LEAPS. The plan is to sell half our position at $49.50 and the rest at $57.50.

Apr. 4th, 2009 - entry price on PBR @ 35.10, option @ $2.80
symbol: PMJ-AJ, 2010 $50.00 LEAP call - current bid/ask .85/1.00
-stop loss on PBR at $29.00

Chart of PBR:


PEP $54.71 +0.03 -- PEPSICO Inc.

Murphy's law likes to show up a lot in the stock market. Shares of PEP managed to breakout over resistance near $57.00, hit our trigger to buy LEAPS at $57.25, and then the stock immediately reversed lower. At this time I would wait for a dip near $52.50 before considering new bullish positions. Our long-term target is the $65-70 zone. We'll use a stop loss at $51.50. This is an 18-month bet.

July 7th, 2009 - entry price on PEP @ 57.25, option @ $4.50(estimate)
symbol: VP-AL, 2011 $60.00 LEAP call - current bid/ask $3.40/3.80
-stop loss on PEP at $51.50

Chart of PEP:


PCU $19.27 -0.20 - Southern Copper Corp.

The sell-off in commodities continues to weigh on shares of PCU. If the stock market continues to sell-off we are in danger of being stopped out. More conservative traders might want to raise their stops toward the $18.00 level even though I'm expecting a dip toward $17.00. I'm not suggesting new bullish positions at this time. Our target is $30.00.

April 20th, 2009 - entry price on PCU @ 19.00, option @ 1.95
symbol: YPV-AE, JAN 2010 $25 LEAP call - current bid/ask $1.10/1.25
-stop loss on PCU @ 16.45.

Chart of PCU:


RIG $69.03 +0.75 -- Transocean Ltd.

Right on cue RIG has continued to contract. The stock did test the $65.00 level last week. While it's trying to bounce the trend in oil is still down. I would wait for some semblance of a bounce in crude oil and another dip or better yet a bounce in RIG from the $62.50-65.00 zone again.

July 3rd, 2009 - entry price on RIG @ 70.50, option @ 5.40
symbol: RIG-AP, JAN 2010 $80 call - current bid/ask $4.50/4.80
-stop loss on RIG @ 59.90.

-or-

July 3rd, 2009 - entry price on RIG @ 70.50, option @ 3.90
symbol: RIG-AZ, JAN 2010 $85 call - current bid/ask $3.20/3.50
-stop loss on RIG @ 59.90.

Chart of RIG:


SGY $6.70 +0.07 -- Stone Energy Corp.

SGY is another energy stock that is suffering under the collapse of oil. Shares dipped to $5.83 last week. I would not buy this bounce. Wait for stronger support in the $5.50-5.00 zone. Then we'll reconsider bullish positions. Our stop loss is $4.90. Our target is $14.75.

June 22nd, 2009 - entry price on SGY @ 6.35, option @ 0.75
symbol: YLO-AB, 2010 JAN $10 LEAP call - current bid/ask .65/0.85
-stop loss on SGY @ 4.90

-or-

June 22nd, 2009 - entry price on SGY @ 6.35, (buying the stock)
-stop loss on SGY @ 4.90

Chart of SGY:


SLB $50.51 +0.29 -- Schlumberger Ltd.

SLB is trying to bounce from technical support at its 100-dma near $48.00. Unfortunately with oil still falling I am not willing to buy this bounce in SLB. I am concerned that we could see SLB fall even further towards the $47.50-45.00 zone.

Currently our exit strategy has three parts. The plan is to sell one third of our position at $59.00, which was originally our first target. We'll sell another one third at $69.00. We'll exit our final third at $77.50.

April 20th, 2009 - entry price on SLB @ 45.01, option @ 3.00
symbol: SLB-AL, JAN 2010 $60 LEAP call - current bid/ask $3.20/3.40
-stop loss on SLB @ 44.90.

1st exit @ $59.00 (1/3 of position) option @ $7.25 (+141% estimate)

Chart of SLB:


UNG $12.30 -0.19 - U.S. Natural Gas ETF

The sell-off in UNG has stalled as this ETF tries to find support in the $12.25-12.00 zone. I am not suggesting new long-term LEAPS positions at this time.

Big picture natural gas is in the process of making long-term lows here but that doesn't mean the commodity won't get more oversold first Our long-term target is the $25-30 zone.

June 16th, 2009 - entry price on UNG @ 16.26, option @ 3.90
symbol: ZZM-AT, JAN 2011 $20 LEAP call - current bid/ask $1.75/2.05
-stop loss on UNG @ no stop

Weekly Chart of UNG:


UYG $3.42 -0.08 - ProShares Ultra Financials (2x) ETF

Nothing has changed for the UYG. Financials are still correcting. I am still expecting a dip toward $3.00 but we don't want to launch new positions until we see signs of a bullish reversal. This ETF could get even more volatile as we start to hear second quarter earnings this week.

Please note that we have set our stop loss on UYG at breakeven at $1.50. More conservative traders might want to consider a stop near $2.00 or $2.25.

Don't forget that the UYG trades off the DJUSFN index.

The plan is to hold the UYG for 18 to 24 months or longer. We'll evaluate potential exit points along the way.

Our strategy called for buying the ETF instead of the options.

Current position in the UYG = $1.50 entry (stop loss: 1.50)

Chart of UYG:


VOD $18.50 -0.15 -- Vodafone Group

Our LEAPS play on VOD has been triggered. The stock dipped toward the bottom of its trading range near $18.00. Our entry point to buy LEAPS was at $18.25. There is no need to rush. I would consider opening positions anywhere in the $18.25-18.00 zone. We're using a stop loss at $16.90 but more conservative traders might want to use a tighter stop with the market looking so vulnerable. Our target is the $27.50 region.

July 10th, 2009 - entry price on VOD @ 18.25, option @ 1.10
symbol: VOD-AD, 2010 JAN $20 LEAP call - current bid/ask $1.15/1.25
-stop loss on VOD @ 16.90

Chart of VOD:


WFR $16.61 +0.48 -- MEMC Electronic Materials Inc.

Solar energy names have been crumbling as the energy sector follows crude oil lower. WFR tested support at $15.00 and has produced a decent oversold bounce. The question now is whether or not the bounce can breakout past new resistance at the 100-dma and 200-dma near $17.00. The market looks weak so I would expect another pull back toward $15.00. Considering buy LEAPS on another dip or bounce from $15.00. If you do launch new positions I would buy the $20 strike. Our target is the $30.00 region.

June 23rd, 2009 - entry price on WFR @ 17.50, option @ 2.50
symbol: CJC-AD, 2010 JAN $20 LEAP call - current bid/ask $1.75/1.90
-stop loss on WFR @ 14.75

-or-

June 23rd, 2009 - entry price on WFR @ 17.50, option @ 3.43
symbol: ZET-AE, 2011 JAN $25 LEAP call - current bid/ask $2.25/2.40
-stop loss on WFR @ 14.75

Chart of WFR:


DROPPED Plays

CRS $16.87 -0.21 -- Carpenter Technology

For a LEAPS play we had a relatively tight stop on CRS. The stock hit our trigger to buy LEAPS near $20.00 in the middle of June but then shares proceeded to form a bearish head-and-shoulders pattern. Now that CRS has broken down from that pattern it is forecasting a drop towards $14.00 or lower. CRS hit our stop loss at $17.45 on Wednesday, July 8th.

June 17th, 2009 - entry price on CRS @ 20.25, option @ 3.00
symbol: CRS-LE, DEC 2009 $25 call - exit July 8th @ .55
-stop loss on CRS @ 17.45.

-or-

June 17th, 2009 - entry price on CRS @ 20.25, option @ 1.90
symbol: CRS-LF, DEC 2009 $30 call - exit July 8th @ 0.65
-stop loss on CRS @ 17.45.

Chart of CRS:


DBA $23.95 -0.23 -- PowerShares DB Agriculture ETF

Commodities have continued to correct sharply and the DBA accelerated lower last week. Shares broke their trendline of higher lows and hit our stop loss at $23.90 closing this play on Tuesday, July 7th.

May 23rd, 2009 - entry price on DBA @ 27.63, option @ 1.50
symbol: DBA-AD, 2010 JAN $30 LEAP call - closed July 7th @ 0.50
-stop loss on DBA @ 23.90.

-or-

May 23rd, 2009 - entry price on DBA @ 27.63, option @ 2.25
symbol: ZBV-AI, 2011 JAN $35 LEAP call - closed July 7th near $1.00
-stop loss on DBA @ 23.90.

Chart of DBA:


HES $47.50 -1.07 -- HESS Corp.

The sell-off in oil continues and HES broke down under support in the $49-50 zone early last week. HES hit our stop loss at $49.00 on July 6th. This breakdown under support is very bearish and the P&F chart now points to a $40.00 target.

April 1st, 2009 - entry price on HES @ 52.50, option @ 7.30
symbol: IGG-AN, 2010 $70 LEAP call - stopped July 6th @ 1.65
-stop loss on HES @ 49.00.

Chart of HES: