The market has begun to correct and it could last another couple of weeks. Now is a good time to double check your stop loss placement.


Closed Plays


None, there were no closed plays.


Play Updates


ACGY $12.39 +0.54 -- Acergy S.A.

ACGY continues to show relative strength and closed at new highs for 2009. More conservative traders may want to use a tighter stop loss.

I'm not suggesting new LEAPS positions at this time. Our plan is to exit in the $14.50-15.00 zone although I'm starting to suspect that ACGY could go higher.

April 25th, 2009 - entry price on ACGY @ 7.61, option @ 1.05
symbol: QLS-AB, 2010 JAN $10 LEAP call - current bid/ask $2.75/3.10
-stop loss on ACGY @ 7.60

Chart of ACGY


ACI $21.86 -0.25 -- Arch Coal Inc.

Many of the coal stocks have started to correct. I would expect a dip back toward $20.00, which as broken resistance should be new support.

Our long-term target is the $30 region. If you do launch new positions I would buy the 2010 January $20 calls or 2011 January $25 calls rather than the ones originally listed below.

May 14th, 2009 - entry price on ACI @ 16.00, option @ 1.30
symbol: ACI-AE, 2010 JAN $25 LEAP call - current bid/ask $1.50/1.60
-stop loss on ACI @ 15.95

-or-

May 14th, 2009 - entry price on ACI @ 16.00, option @ 2.40
symbol: OSE-AF, 2011 JAN $30 LEAP call - current bid/ask $2.85/3.00
-stop loss on ACI @ 15.95

Chart of ACI:


ANR $34.87 -0.98 - Alpha Natural Resources, Inc.

ANR, another material-related stock, has pulled back from $40 toward support near $35 and it 50-dma.

We still have a trigger at $30.50 to buy the second half of our LEAPS position but that may not happen. We might want to up that toward $32.00. Our long-term target is the $45.00-50.00 zone.

Aug. 25th, 2009 - entry price on ANR @ 34.00, option @ 5.10
symbol: HIC-AG, 2010 JAN $35 LEAP call - current bid/ask $6.40/6.60
-stop loss on ANR @ 29.50

Symbol just changed from ANR-AG to HIC-AG

bought 1/2 LEAP position on 08/25/09 (option price @ 5.10)
plan to buy 2nd half when ANR hits $30.50.

-or-

Aug. 25th, 2009 - entry price on ANR @ 34.00, option @ 7.00
symbol: VJV-AH, 2011 JAN $40 LEAP call - current bid/ask $7.20/7.80
-stop loss on ANR @ 29.50
bought 1/2 LEAP position on 08/25/09 (option price @ 7.00)
plan to buy 2nd half when ANR hits $30.50.

Chart of ANR:


BAC $16.60 -0.38 - Bank of America Corp.

Financials stocks have been leading the market lower. BAC has been under performing the last three days after its failed rally near $18.00. Last week I suggested that BAC could retest the $16.00 level and that appears to be the next stop near its 50-dma.

More conservative traders may want to take some money off the table now and scale back in on a dip. However, 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 $7.90/8.00
-stop loss on BAC @ 9.75

Chart of BAC


BG $61.07 +0.23 -- Bunge Limited

The intermediate downtrend hasn't changed. BG has broken down under its long-term trendline of higher lows (support). If the market continues to sink BG will most likely break the $60.00 level. If that happens then look for a test of the 200-dma currently near $56.75, which would stop us out. More aggressive traders may want to put their stops under the $55.00 mark.

I'm not suggesting new positions at this time. Wait for a move over $65.00 before considering new positions. Our target is the $85-90 zone. We have a tight stop loss at $57.49.

Sep 15th, 2009 - entry price on BG @ 63.00, option @ 5.90
symbol: BGW-DN, 2010 APR $70 LEAP call - current bid/ask $3.70/4.00
-stop loss on BG @ 57.49

Chart of BG:


CLF $32.37 -0.23 -- Cliffs Natural Resources Inc.

CLF is starting to correct after failing near $35.00. Wait for a bounce in the $28.00-30.00 zone before considering new bullish positions.

Our long-term target is the $40.00-45.00 zone. More aggressive traders may want to aim for $50. Readers might also want to consider the 2011 January LEAPS instead.

Sept. 5th, 2009 - entry price on CLF @ 26.19, option @ 4.84
symbol: CLF-AE, 2010 JAN $25 LEAP call - current bid/ask $ 8.70/ 8.90
-stop loss on CLF @ 22.24 (FYI: Gap open entry)

Chart of CLF:


CNX $44.29 -1.09 -- Consol Energy Inc.

CNX almost made it to $50.00 last week but shares have begun to correct. I see potential support at $42.00 and again near $40.00. I'd consider new bullish positions on a bounce near $40.00.

CNX has already hit our first target at $48.50. We will plan to sell the second half or our position at $57.50.

Sep 1st, 2009 - entry price on CNX @ 36.50, option @ 5.75
symbol: CNX-AG, 2010 JAN $35 LEAP call - current bid/ask $11.00/11.20
-stop loss on CNX @ 34.75

Target hit 09/16/09 @ 48.50, option price $14.50 (+152%)

-or-

Sep 1st, 2009 - entry price on CNX @ 36.50, option @ 7.80(estimate)
symbol: VTL-AH, 2011 JAN $40 LEAP call - current bid/ask $12.60/13.10
-stop loss on CNX @ 34.75

Target hit 09/16/09 @ 48.50, option price $15.40 (+97%)

Chart of CNX


CRS $23.91 -0.56 -- Carpenter Technology Corp.

Nothing has changed from my previous comments. I'm still expecting a pull back toward the $22.00-20.00 zone and would consider new bullish positions on a bounce near $20.00. Our long-term target is the $35.00-40.00 zone.

Sep 1st, 2009 - entry price on CRS @ 20.50, option @ 3.10
symbol: CRS-CD, 2010 MAR $20 LEAP call - current bid/ask $5.40/5.60
-stop loss on CRS @ 17.50

Chart of CRS:


DISH $18.82 +0.73 -- Dish Network Corp.

DISH continues to show relative strength. I'm not suggesting new positions at this time. If the stock does correct look for support near $17.00 or the 100-dma. Our long-term target is the $25.00-30.00 zone.

August 22nd, 2009 - entry price on DISH @ 17.18, option @ $3.20
symbol: HSW-AC, 2010 JAN $15 call - current bid/ask $4.40/4.60
-stop loss on DISH @ 15.45.

Chart of DISH:


DO $91.25 -0.39 -- Diamond Offshore

DO's recent pull back is now testing its long-term trendline of higher lows and round-number support at $90.00. Readers will want to double check how much risk their taking and reconsider raising their stop loss. I'm leaving the stop at $79.45 for now but you might want to raise your stop closer to $84-85.

Our first target is $109.00. We can expect resistance about every $5.00 at $95, $100, etc. Readers might want to consider the 2011 January calls if you're launching new positions.

FYI: New January 2010 options have been added with the normal DO- root symbol. If you're going to buy new option positions I'd use these new symbols. The new 2010 January $90 call is DO-AA. The new 2010 January $100 call is DO-AC.

If you're curious about the KWJ- root symbol the CBOE created them back in February 2009 to account for DO's special cash dividend in March 2009. There was another special cash dividend in July 2009 and the KWJ series now represents 100 shares of DO plus $562.50 in cash.

Sep 2nd, 2009 - entry price on DO @ 86.50, option @ 12.30
symbol: KWJ-AR, 2010 JAN $90 LEAP call - current bid/ask $11.60/11.90
-stop loss on DO @ 79.45

-or-

Sep 2nd, 2009 - entry price on DO @ 86.50, option @ 5.20
symbol: KWJ-AT, 2010 JAN $100 LEAP call - current bid/ask $6.30/6.50
-stop loss on DO @ 79.45

Chart of DO:


EMR $38.92 -0.46 -- Emerson Electric Co.

EMR has begun to correct and readers may get another entry point soon. I would still consider new bullish positions on a dip in the $38.00-37.00 region. EMR doesn't move super fast so I'm listing the 2011 LEAPS.

Sept. 8th, 2009 - entry price on EMR @ 38.00, option @ $4.50
symbol: VHH-AH, 2011 JAN $40 call - current bid/ask $4.50/4.80
-stop loss on EMR @ 33.50.

Chart of EMR:


FAS $77.69 -2.39 - Direxion Fincl.Bull 3x ETF

FAS gave us another shot at profits near $90.00 before correcting with the financials this week. The next couple of weeks could be volatile as the market slides toward support.

I am not suggesting new bullish positions in FAS at this time.

Previous Comments on FAS:
Currently we have sold one third of our position at $60.00 (pre-split price of $12.00) and we plan to sell another third at $120.00. Honestly, I'm thinking we may want to take profits at $90.00 but we'll make that decision when the FAS gets there. We'll re-evaluate our final target for the last third of our position as needed. FYI: On July 9th, 2009 the FAS performed a 1:5 reverse split.

FYI: The FAS is based off and moves with the Russell 1000 Financial Services index.

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

Current position in the FAS = $2.64 entry (stop loss: 7.00)
post-split prices are: $13.20 entry (stop loss: 35.00)

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

Chart of FAS

Chart of RIFIN (Russell 1000 financial services)


FCX $66.69 -1.41 - Freeport McMoran

Now that the dollar is trying to bounce traders are rushing in to take profits in the mining stocks. Gold was unable to hold the $1,000 level and copper broke down from a multi-week consolidation.

Short-term the trend in FCX is down and I'd expect a drop toward the $60 level. FCX has already hit our first target at $66.00. Our second and final target is $77.00. More conservative traders may want to use a stop closer to $55 or higher.

June 22nd, 2009 - entry price on FCX @ 46.00, option @ 6.00
symbol: FCX-AK, 2010 JAN $55 LEAP call - current bid/ask $14.70/14.75
-stop loss on FCX @ 49.95 *new*

09/05/09 - Take Profits (sell half) at $66.00, option @ 15.00 (+150%)

-or-

June 22nd, 2009 - entry price on FCX @ 46.00, option @ 10.00
symbol: OBQ-AL, 2011 JAN $60 LEAP call - current bid/ask $18.10/18.85
-stop loss on FCX @ 49.95 *new*

09/05/09 - Take Profits (sell half) at $66.00, option @ 18.50 (+85%)

Chart of FCX:


FSLR $152.87 + 2.25 -- First Solar

The rally has stalled at resistance. While it seems like the next move should be down I wouldn't bet on it.

We're not suggesting new positions at this time. At the moment we're long the 2010 January $100 put and we have a covered call play that should be fine if FSLR stays above $100.

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

- Update 08/15/09 -
Cover the 2010 $250 Put at $109.40. Keep the $100 put.

Currently the 2010 Jan. $100 put is worth (bid) $2.65.
If you're curious the 2010 Jan. $150 call is at $20.20.

Chart of FSLR


GT $16.02 -0.46 -- Goodyear Tire & Rubber Co.

Shares of GT are still fading and the stock looks headed toward the 50% Fibonacci retracement (see chart).

I'm not suggesting new LEAPS positions at these levels. We have two targets. The plan is to sell half at $22.75 and half at $26.75.

June 6th, 2009 - entry price on GT @ 12.94, option @ 2.20
symbol: GT-AC, 2010 $15 LEAP call - current bid/ask $2.50/2.60
-stop loss on GT @ 11.90
-or-
June 6th, 2009 - entry price on GT @ 12.94, option @ 2.65
symbol: VYR-AD, 2011 $20 LEAP call - current bid/ask $2.75/3.20
-stop loss on GT @ 11.90

Chart of GT:


HOS $26.41 +0.10 -- Hornbeck Offshore Services

HOS has spent several days consolidating under resistance at $28.00. Now shares look headed for support near $24.00. We might want to consider new bullish positions if HOS bounces near the 50-dma. Our long-term target is $35.00.

June 27th, 2009 - entry price on HOS @ 21.20, option @ 4.90
symbol: HOS-AD, 2010 JAN $20 LEAP call - current bid/ask $6.60/7.00
-stop loss on HOS @ 19.95
-or-
June 27th, 2009 - entry price on HOS @ 21.20, option @ 2.70
symbol: HOS-AE, 2010 JAN $25 LEAP call - current bid/ask $3.30/4.20
-stop loss on HOS @ 19.95

Chart of HOS:


INTC $19.37 -0.17 -- Intel Corp.

The rally in the semiconductors has stalled and Intel looks ready to lead them lower. INTC should find support near $18.00 and again at $17.00. I am not suggesting new long-term positions at this time. Our long-term 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 or diagonal 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 $2.47/2.48
-stop loss on INTC @ 15.90.

Chart of INTC:


LNN $41.74 -1.09 -- Lindsay Corp.

LNN has pulled back toward technical support at its 50-dma and exponential 200-dma. While it might be tempting to consider new positions here I would wait.

We want to sell half our LEAPS position at $49.50 and half at $59.50.

August 7, 2009 - entry price on LNN @ 41.55, option @ 8.80
symbol: NRR-AG, 2010 JAN $35 LEAP call - current bid/ask $ 7.90/ 8.60
-stop loss on LNN @ 34.50
-or-
August 7, 2009 - entry price on LNN @ 41.55, option @ 6.00
symbol: NRR-AH, 2010 JAN $40 LEAP call - current bid/ask $5.00/5.60
-stop loss on LNN @ 34.50

Chart of LNN:


MDR $24.84 -0.96 - McDermott Intl. Inc.

MDR has broke down from its narrow bullish channel. A normal correction would bring it back toward the $23.50 region. I'm not suggesting new positions at this time.

We want to sell 50% to 75% of our position at $29.75. We'll sell the remainder at $34.00. FYI: The Point & Figure chart has a $38 target.

April 4th, 2009 - entry price on MDR @ 15.56, option @ 2.70
symbol: MDR-AD, 2010 $20 LEAP call - current bid/ask $5.80/6.00
-stop loss on MDR @ 19.00

Chart of MDR:


MSFT $25.55 -0.39 -- Microsoft Corp.

After a three-week rally MSFT looks a little extend. Look for the stock to drift back toward the simple 50-dma. I'm not suggesting new long-term positions at this time.

This should be a long (18-month) trade. MSFT doesn't move that fast (normally). Investors might want to turn this into a calendar or diagonal spread, selling calls against your LEAPS position. 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 $3.50/3.60
-stop loss on MSFT @ 19.95.

Chart of MSFT:


MT $36.97 -1.23 -- ArcelorMittal

Some of the metal stocks have really begun to correct and MT sank sharply toward its long-term trend of higher lows (support0. The stock should bounce soon.

More conservative traders may want to raise their stops (near $32.50 or $34.50 could work). Our long-term target is the $50 region.

June 17th, 2009 - entry price on MT @ 30.50, option @ 2.70
symbol: MT-AH, JAN 2010 $40 call - current bid/ask $2.80/2.95
-stop loss on MT @ 29.50

-or-

June 17th, 2009 - entry price on MT @ 30.50, option @ 2.00
symbol: MT-AJ, JAN 2010 $50 call - current bid/ask $0.65/0.75
-stop loss on MT @ 29.50

Chart of MT:


NYX $28.02 -0.42 -- NYSE Euronext

NYX has also pulled back to significant support. A breakdown here would definitely be bearish. More conservative traders may want to raise their stop loss. I'm not suggesting new positions at this time. Our long-term target is the $35.00-40.00 zone.

Apr. 11th, 2009 - entry price on NYX @ 21.51, option @ $1.81
-- NZV-AD, 2010 $30.00 LEAP call - current bid/ask $1.61/1.65
-stop loss on NYX at $22.00

Chart of NYX:


PBR $44.27 +0.33 -- Petroleo Brasiliero

PBR is correcting after testing its 2009 highs last week. I would expect a dip back toward $41.00 and its trendline of support. I'm not suggesting new long-term positions at this time. 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 $1.55/1.65
-stop loss on PBR at $33.50

Chart of PBR:


PCU $29.97 -0.27 - Southern Copper Corp.

PCU has held up reasonably well considering the breakdown in copper prices last week. Unfortunately I would not expect PCU to do so well this week. The stock has produced a three-day bearish reversal patter (outlined on the chart). We can probably expect a correct back to the $27-25 zone. I'm not suggesting new long-term positions at this time. More conservative traders may want to exit completely right here!

PCU has already hit our first target at $29.75. We plan to sell the second half of our position at $34.00.

April 20th, 2009 - entry price on PCU @ 19.00, option @ 1.95
symbol: PCU-AE, JAN 2010 $25 LEAP call - current bid/ask $6.10/6.30
-stop loss on PCU @ 22.00

Target Hit @ 29.75 on 08/24/09. Sold 1/2 at $6.00 (+207%)

Chart of PCU:


PEP $58.68 +0.14 -- PEPSICO Inc.

If the market continues to slide PEP may dip toward the $56.00 level. I'm not suggesting new positions at this time. More conservative traders might want to raise their stops toward the $55 region. Our long-term target is the $65-70 zone. We'll use a stop loss at $51.50. This is an 18-month bet.

FYI: PEP is due to report earnings on October 8th.

July 7th, 2009 - entry price on PEP @ 57.25, option @ $4.50(estimate)
symbol: VP-AL, 2011 $60.00 LEAP call - current bid/ask $5.00/5.40
-stop loss on PEP at $51.50

Chart of PEP:


RAI $44.69 +0.26 -- Reynolds American Inc.

RAI's slow ride up has turned into a slow slide down. Nothing has changed from my prior comments. A normal Fibonacci retracement of the June-August rally would produce a dip towards the $43.00 or $41.75 levels.

I'm not suggesting new LEAPS positions at this time. Wait and watch for support near $42.00. We want to take some money off the table at $49.50 (sell half) and exit completely at $57.50.

July 24th, 2009 - entry price on RAI @ 42.50, option @ $1.45(estimate)
symbol: RAI-BI, 2010 FEB $45.00 LEAP call - current bid/ask $2.30/2.45
-stop loss on RAI at $39.75

or

July 24th, 2009 - entry price on RAI @ 42.50, option @ $4.50(estimate)
symbol: OWO-AH, 2011 JAN $40.00 LEAP call - current bid/ask $6.20/6.90
-stop loss on RAI at $39.75

Chart of RAI:


RIG $83.19 -0.04 -- Transocean Ltd.

Oil service stocks have been held hostage by the sell-off in oil. If the drop in oil continues we can expect RIG to slide toward its trendline of higher lows. I'm not suggesting new positions at this time. More conservative traders may want to place their stop loss closer to $75.00. Currently our upside target is $98.00.

July 3rd, 2009 - entry price on RIG @ 70.50, option @ 5.40
symbol: RIG-AP, JAN 2010 $80 call - current bid/ask $ 8.80/ 9.10
-stop loss on RIG @ 69.95.

-or-

July 3rd, 2009 - entry price on RIG @ 70.50, option @ 3.90
symbol: RIG-AZ, JAN 2010 $85 call - current bid/ask $6.30/6.50
-stop loss on RIG @ 69.95.

Chart of RIG:


SLB $59.48 +0.32 -- Schlumberger Ltd.

SLB is another oil service stock correcting. Shares should have short-term support near $58.00. Another bounce near $55 and its 100-dma may be a new entry point.

Currently our exit strategy has three parts. The plan was 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 $5.10/5.30
-stop loss on SLB @ 49.90

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

Chart of SLB:


TEX $19.55 -0.20 -- Terex Corp.

TEX is holding up pretty well. I would still look for a dip near $18.00 and its exponential 200-dma. Our upside target is the $28.00-30.00 zone.

Sept. 11th, 2009 - entry price on TEX @ 18.25, option @ 4.40
symbol: HAG-AC, JAN 2010 $15 LEAP call - current bid/ask $5.40/5.60
-stop loss on TEX @ 14.25

-or-

Sept. 11th, 2009 - entry price on TEX @ 18.25, option @ 4.10
symbol: VXQ-AD, JAN 2011 $20 LEAP call - current bid/ask $4.90/5.40
-stop loss on TEX @ 14.25

Chart of TEX:


UYG $5.67 -0.09 - ProShares Ultra Financials (2x) ETF

The financials lead the market higher and now they're leading the market lower. I still expect pull back to be shallow so watch the $5.00 zone for the UYG.

More conservative traders may want to raise their stop toward $4.00. I am not suggesting new positions at this time.

Editor's Note: The idea is to hold this ETF as a long-term investment but experienced investors may want to trade it by taking profits now and re-entering on a pull back.

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. It's true that as a leveraged ETF there will be slippage in the daily performance between UYG and the underlying index.

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

Current position in the UYG = $1.50 entry (stop loss: 3.20)

Chart of UYG:


VOD $22.77 -0.24 -- Vodafone Group

VOD has begun to correct after hitting new 2009 highs last week. Nothing has changed from my prior comments. We can expect a pull back with short-term support at $22.00 and strong support in the $21-20 zone. I'm not suggesting new long-term positions at this time. 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 $3.00/3.20
-stop loss on VOD @ 17.85

Chart of VOD:


WFR $17.29 -0.39 -- MEMC Electronic Materials Inc.

Uh-oh! I've gone from relief at the rally in WFR back to worry. The semiconductors have been under performing. Plus, if oil is sinking the solar stocks tend to follow. I'm not suggesting new positions at this time. Our long-term 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 $1.15/1.25
-stop loss on WFR @ 14.95

-or-

June 23rd, 2009 - entry price on WFR @ 17.50, option @ 3.43
symbol: ZET-AE, 2011 JAN $25 LEAP call - current bid/ask $1.95/2.30
-stop loss on WFR @ 14.95

Chart of WFR:


XIDE $7.76 +0.03 Exide Technologies

XIDE was way over due for some profit taking and it finally hit last week. Shares slipped to $7.18 on Friday. Yet the big bounce from its intraday lows almost looks like a short-term bullish entry point.

I am not suggesting new long-term positions at this time. Our long-term target is $12.00.

Sep 2nd, 2009 - entry price on XIDE @ 6.50, option @ 1.25
symbol: FRU-CU, 2010 MAR $7.5 call - current bid/ask $1.60/1.80
-stop loss on XIDE @ 4.85

-or-

Buy the stock @ 6.50, stop loss at $4.85

Chart of XIDE: