ACI $21.21 +0.21 -- Arch Coal Inc.
The December bounce in ACI has stalled but the short-term trend is still up. Investors bought the dip twice near $20.80. ACI still has technical resistance at the 50-dma and some price resistance near $22.00 and again near $24.00.
I am not suggesting new bullish positions at this time. Our long-term target is the $30 region.
May 14th, 2009 - entry price on ACI @ 16.00, option @ 2.40
symbol: OSE-AF, 2011 JAN $30 LEAP call - current bid/ask $1.50/1.60
-stop loss on ACI @ 19.40
Chart of ACI:
ANR $43.50 +0.12 - Alpha Natural Resources, Inc.
It has proven to be a strong couple of weeks for ANR. The stock broke out to new 2009 highs this past week. I'm not suggesting new bullish positions at this time. Our LEAPS positions has turned positive.
Our long-term target is the $50-60 zone.
Aug. 25th, 2009 - entry price on ANR @ 34.00, option @ 7.00
symbol: VJV-AH, 2011 JAN $40 LEAP call - current bid/ask $10.80/11.40
-stop loss on ANR @ 32.40
bought 1/2 LEAP position on 08/25/09 (option price @ 7.00)
Chart of ANR:
BAC $15.03 +0.17 - Bank of America Corp.
Financials continue to underperform the rest of the market. The sector managed a bounce on Friday but the short-term trend is still a bearish one of lower highs and lower lows. If the situation doesn't change we can expect BAC to drift toward our stop loss at $13.85. I am not suggesting new long-term LEAPS positions at this time.
Our long-term target is the $25-30 zone.
Jan 25th, 2009 - entry price on BAC @ 6.24, option @ 2.38
symbol: VBA-AB, JAN 2011 $10 LEAP call - current bid/ask $5.90/5.95
-stop loss on BAC @ 13.85
10/31/09 Sell Half -- option at $6.00 (+152%)
Chart of BAC
BQI $1.13 -0.00 -- Oilsands Quest Inc.
Oil is bouncing off its December lows but the strength in the dollar is pressuring this commodity. Crude oil prices need to be relatively high to make pulling oil out of the oil sands a worthwhile endeavor. Shares of BQI tagged the $1.05 level again. I would still consider buying the dips in the $1.05-1.00 zone but readers may want to wait for a new relative high instead.
Our long-term goal is $2.90.
Nov 27th, 2009 - entry price on BQI @ 1.05, (buy the stock)
-stop loss on BQI @ 0.89
Chart of BQI:
CHK $26.06 +1.06 -- Chesapeake Energy Corp.
The combination of a cold snap across much of the country and a huge winter storm that has started hitting the Eastern U.S. has sent natural gas prices higher. Natural gas inventories saw their biggest one-week drop in inventories, for this time of year, ever as consumer kept the heat on. The rise in natural gas helped fuel the rebound in CHK. This stock has broken out past resistance near $25.00 and its 100 and 50-dma. Investors can use this move as a new bullish entry point to buy call LEAPS.
Our long-term target is $40.00.
Oct 30th, 2009 - entry price on CHK @ 24.00, option @ 4.70
symbol: VEC-AE, JAN 2011 $25 LEAP call - current bid/ask $4.85/5.00
-stop loss on CHK @ 20.95
Chart of CHK:
CNX $47.48 +1.41 -- Consol Energy Inc.
The rebound in CNX continues. The stock ha now cleared technical resistance at its 50-dma.
I am not suggesting new bullish positions at this time. 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 @ 7.80(estimate)
symbol: VTL-AH, 2011 JAN $40 LEAP call - current bid/ask $12.90/13.50
-stop loss on CNX @ 41.00
Target hit 09/16/09 @ 48.50, option price $15.40 (+97%)
Chart of CNX
DE $54.83 +0.69 -- Deere & Co.
It's been a good week for DE with the stock bouncing back toward its 2009 highs. I am not suggesting new bullish positions at this time. We might get a new entry point on a January pull back.
Our long-term target on DE is $69.50. The Point & Figure chart is bullish with a $66 target.
Nov 18th, 2009 - entry price on DE @ 51.00, option @ 8.75(estimate)
symbol: VER-AJ, 2011 JAN $50 LEAP call - current bid/ask $10.30/10.45
-stop loss on DE @ 44.00
Chart of DE:
EMR $41.78 +0.28 -- Emerson Electric Co.
EMR, like the S&P 500, remains stuck in its sideways trading range. Although EMR has a much stronger longer-term trend of higher lows. There is no change from my prior comments.
Depending on your personal style you can buy a dip near $41.00 or look for a breakout past resistance near $43.00 as a potential entry point. Our target is $47.50.
Sept. 8th, 2009 - entry price on EMR @ 38.00, option @ $4.50
symbol: VHH-AH, 2011 JAN $40 call - current bid/ask $5.50/5.80
-stop loss on EMR @ 35.90.
Chart of EMR:
ESV $41.82 +0.10 -- ENSCO Intl. Inc.
We're not seeing much of a bounce in ESV but then oil stocks have suffered as the dollar drives oil futures lower. ESV is still hovering around its long-term trendline of higher lows. At the moment I hesitate to launch new positions with the six-week trend of lower highs in place.
Our target is the $55-60 zone.
Dec. 3rd, 2009 - entry price on ESV @ 42.50, option @ $6.80
symbol: VKS-AI, 2011 JAN $45 call - current bid/ask $5.80/6.10
-stop loss on ESV @ 37.25.
Chart of ESV:
FSLR $135.67 - 0.06 -- First Solar
The rally in FSLR has failed at its trendline of lower highs. It looks like the next move could be lower.
We only have a few weeks left before our 2010 January options expire.
I am not suggesting new positions at this time. Currently we are long the 2010 January $100 put and we have a covered call play that should be fine if FSLR stays above $90. At this point the $100 put, part of an old spread, is nearly worthless.
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%)
if FSLR is above $150.00.
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) $0.50.
If you're curious the 2010 Jan. $150 call is at $ 1.59.
Chart of FSLR
FST $22.34 +0.15 -- Forest Oil Corp.
Shares of FST have displayed impressive relative strength with a rally in spite of weakness in the oil sector. The stock looks a little short-term overbought here.
Our long-term target is $37.50.
Oct 15th, 2009 - entry price on FST @ 23.85, option @ 7.40
symbol: OJG-AD, 2011 $20 LEAP call - current bid/ask $5.90/6.30
-stop loss on FST @ 16.85
Chart of FST:
GHM $21.55 +0.80 -- Graham Corp.
GHM is really extending its gains. The stock out performed on Friday thanks to some positive analyst comments and a $25 price target. Shares are certainly moving a lot faster than expected. I am raising our stop loss to $15.75. Sadly the lack of volume is producing some HUGE spreads in the LEAPS options. Really, the spreads are so big they look like an error. When you choose to exit you may not want to use a market order.
Right now our target to exit is $24.00 but we may want to add a second, higher target.
Oct 26th, 2009 - entry price on GHM @ 15.15, option @ 2.65
symbol: GHM-FC, 2010 JUNE $15 call - current bid/ask $4.30/9.20
-stop loss on GHM @ 15.75
- or -
Oct. 26th 2009 - entry price on GHM (the stock) @ 15.15
- stop loss on GHM @ 15.75
Chart of GHM:
GNK $22.10 -0.56 -- Genco Shipping
The Baltic Dry Goods index has fallen two weeks in a row and looks like it's down about four out of the last five weeks. That's putting pressure on GNK and the stock is consolidating with a bearish trend of lower highs. At this point I would considering buying call LEAPS on a bounce from the 200-dma or a breakout over $25.00.
Our plan was to use small positions to keep our risk limited.
Our long-term target is $39.00.
Nov 21st, 2009 - entry price on GNK @ 25.46, option @ 5.00
symbol: OKJ-AF, 2011 $30 LEAP call - current bid/ask $2.85/3.20
-stop loss on GNK @ 19.65
Chart of GNK:
HON $39.15 change: -0.39 - Honeywell Intl. Inc.
The last three days has seen HON turn bearish. The stock is testing very minor support in the $38-39 zone. If this continues I'd watch for stronger support near its 100-dma or the exponential 200-dma (near 36.50). Astute readers will note that shares have been selling off following HON's recent earnings guidance on Dec. 16th. It could just be normal profit taking after hitting 2009 highs. I'd wait for a strong bounce from support or a new high to open positions.
Our first target to take profits is at $49.00. Our second target is at $54.00. We'll use a stop loss at $35.75 although more conservative traders may want to use a stop closer to $38.00.
Dec 11th, 2009 - entry price on HON @ 41.00, option @ 3.25
symbol: VAD-AI, 2011 $45 LEAP call - current bid/ask $2.25/2.40
-stop loss on HON @ 35.75
Chart of HON:
INTC $19.63 +0.56 -- Intel Corp.
Shares of INTC have continued to underperform their peers in the semiconductor sector. The stock was sinking most of the week but managed a bounce on expiration Friday.
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 $2.15/2.22
-stop loss on INTC @ 16.90.
Chart of INTC:
MTW $10.01 +0.39 -- Manitowoc Inc.
It has been a good week for MTW. Shares did rebound from technical support at their 100-dma and now the stock is challenging round-number support/resistance at the $10.00 mark. If shares can clear the new trend of lower highs it might be time to consider new positions but not yet.
Our long-term target is $17.00.
Oct 30th, 2009 - entry price on MTW @ 9.10, option @ 2.61
symbol: VMT-AB, 2011 JAN $10 call - current bid/ask $2.65/2.80
-stop loss on MWT @ 7.90
- or -
Oct. 30th 2009 - entry price on MTW (the stock) @ 9.10
- stop loss on MTW @ 7.90
Chart of MTW:
ORCL $24.34 +1.46 -- Oracle Corp.
ORCL reported better than expected earnings on Thursday night and offered generally upbeat guidance for the current quarter. The news garnered at least one analyst upgrade. Shares gapped open higher at $24.01 and hit $24.74 intraday. Our plan was to buy call LEAPS if ORCL hit $24.05, which happened Friday morning so the play is open. However, odds are decent that ORCL will fill the gap so traders may want to wait for a dip toward $23.50 before launching positions. Our stop loss is at $21.75. Our long-term target is $29.75.
FYI: Shares of ORCL don't move very fast. Readers might want to consider turning this play into a calendar or diagonal spread to further maximize your gains.
Dec. 18th, 2009 - entry price on ORCL @ 24.05, option @ 2.55
symbol: VOC-AE, 2011 LEAP $25 call - current bid/ask $2.56/2.60
-stop loss on ORCL @ 21.75.
Chart of ORCL:
PBR $46.56 -0.61 - Petroleo Brasiliero
Our PBR trade appears to be in trouble. Shares broke very significant support at the long-term up trend of higher lows this past week. The selling stalled when PBR hit the rising 100-dma. More conservative traders may want to exit early since we don't have much time left. I am not suggesting new bullish positions.
I'm suggesting we sell half our position at $54.50. We'll sell the second half at $59.50.
Apr. 4th, 2009 - entry price on PBR @ 35.10, option @ $2.80
symbol: PMJ-AJ, 2010 $50.00 LEAP call - current bid/ask $0.56/0.60
-stop loss on PBR at $44.40
Chart of PBR:
PEP $59.48 -0.56 -- PEPSICO Inc.
Wow! The sell-off in PEP has turned into a route with investors fleeing the stock. I expressed concern last week when PEP broke down under the bottom of its rising channel. The stock has retreated sharply on strong volume, erasing weeks of gains in just a few days. There was some news that the Pepsi division was not going to advertise in the next Super Bowl but the Frito Lay (snack food) unit is still expected to advertise.
The sharp, high-volume decline is very bearish. Traders may want to raise their stops toward Friday's low (58.77).
I'm not suggesting new bullish positions at this time.
Our exit target is the $69.90 mark.
July 7th, 2009 - entry price on PEP @ 57.25, option @ $4.50(estimate)
symbol: VP-AL, 2011 $60.00 LEAP call - current bid/ask $4.80/5.00
-stop loss on PEP at $54.95
Chart of PEP:
RAI $53.13 +0.32 -- Reynolds American Inc.
It was a very quiet week for RAI. The stock moved 13 cents for the week. The trend is up but momentum has obviously slowed. Don't be surprised to see some profit taking. The $50 level should be support.
Readers may want to take profits early.
I'm not suggesting new positions at this time.
Our second and final target is $57.50.
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 $13.10/13.60
-stop loss on RAI at $47.45
Sold Half on 10/19 @ 49.50, option @ $8.90 (+97%)
Chart of RAI:
RGLD $48.13 +1.13 -- Royal Gold Inc.
Continued strength in the dollar is dragging gold futures lower but the commodity and the gold miners managed a bounce on Friday. It looks like I was right to worry that RGLD may break support at $50.00. Shares did so on Thursday. I would look for a dip or a bounce near $45.00 as our next entry point. More aggressive traders could buy Friday's bounce from the 100-dma.
Our long-term target to exit is $64.50.
Nov. 7th, 2009 - entry price on RGLD @ 50.70, option @ 7.50
symbol: ZMO-AL, 2011 JAN $60 LEAP call - current bid/ask $5.00/5.40
-stop loss on RLGD @ 41.95
Chart of RGLD
TEX $19.21 -0.11 -- Terex Corp.
TEX has finally started to bounce with a breakout higher last Wednesday. If the stock can breakout over its 50-dma near $21.00 we might want to consider new bullish positions. Currently I'm not suggesting new bullish positions. Our final target is $29.50.
Sept. 11th, 2009 - entry price on TEX @ 18.25, option @ 4.10
symbol: VXQ-AD, JAN 2011 $20 LEAP call - current bid/ask $4.00/4.30
-stop loss on TEX @ 17.75
Sell half (10/24/09), option at $7.50 (+82.9%)
Chart of TEX:
UNH $31.54 -0.28 -- UnitedHealth Group Inc.
As the healthcare bill gets closer to passing in the Senate the healthcare stocks have rallied higher. Shares of UNH hit our trigger to buy call LEAPS at $31.55 on Wednesday. Our play is open. If you're patient we might get a better entry point on a dip back toward $30.00, which should be support.
Keep in mind that the debate could always change again making this a more aggressive, higher-risk trade. I'd keep positions relatively small to limit your risk.
Our long-term target is $42.50.
Dec 16th, 2009 - entry price on UNH @ 31.55, option @ 3.80
symbol: VUH-AG, 2011 JAN $35 LEAP call - current bid/ask $3.95/4.05
-stop loss on UNH @ 27.25
Chart of UNH:
UYG $5.51 +0.15 - ProShares Ultra Financials (2x) ETF
UYG gained one cent on the week. I remain concerned because financials are still underperforming the rest of the market and the trend of lower highs is unchanged. If something doesn't change soon we could get stopped out at $5.25 before the year is out.
I am not suggesting new bullish positions at this time.
Our second and final target is $9.50.
FYI: The UYG trades off the DJUSFN index.
Our strategy called for buying the ETF instead of the options.
Current position in the UYG = $1.50 entry (stop loss: 4.80)
10/14/09 Exit - Sell Half @ 6.31 (gap open exit, +320%)
Chart of UYG: