Closed Plays


None. No closed plays this week.


Play Updates


ACI $21.65 +0.20 -- Arch Coal Inc.

ACI managed to post a gain for the week. More importantly the stock held support near $20.00 and its rising 200-dma. The coal sector also garnered some bullish analyst comments on Friday. In last week's update I said I was tempted to buy call LEAPS again. Now I'm even more tempted. Shares have held support near the $20 level for nearly two weeks now. I am suggesting new positions now. I prefer the January 2012 $25 calls (see below). More conservative traders can wait for a move over $22.00 or its 50-dma (23.00) before initiating new positions.

Our exit strategy hasn't changed. Our final target is $34.75.

May 14th, 2009 - entry price on ACI @ 16.00, option @ 2.40
symbol: OSE-AF, 2011 JAN $30 LEAP call - current bid/ask $1.15/1.30
-stop loss on ACI @ 18.99

--2nd Entry--
Feb 13th, 2010 - entry price on ACI @ 21.65, option @ 4.40
symbol: YEP1221A25 2012 JAN $25 LEAP call - current bid/ask $3.80/4.40
-stop loss on ACI @ 18.99

Chart of ACI:


Berkshire Hathaway Inc. - BRK.B - $76.90 +0.21

BRK.B rallied more than 4% on the week as investors bought the stock ahead of its inclusion into the S&P 100 and S&P 500 indices. Friday saw massive volume of 316 million shares as mutual funds added BRK.B to their portfolios. On a short-term basis I'm concerned that BRK.B may be forming a double top since the rally stalled at its early February highs. Don't be surprised if shares contract. This is a long-term hold for us. I suspect you have time to be patient and wait for your entry point. I would target a dip in the $73-70 zone as a possible entry.

Our first target is $90.00. Our second target is $99.50

Feb 6th, 2010 - entry price on BRK.B @ 73.57, option @ 4.80
symbol: 2011 JAN $80 XPB1122A80 LEAP call - current bid/ask $5.50/6.70
-stop loss on BRK.B @ 64.95

Feb 6th, 2010 - entry price on BRK.B @ 73.57, option @ 6.50
symbol: 2012 JAN $85 WDW1221A85 LEAP call - current bid/ask $6.90/8.60
-stop loss on BRK.B @ 64.95

Chart of BRK.B:


CHK $24.96 -0.17 -- Chesapeake Energy Corp.

CHK is still holding support near $24.00 and its 200-dma. More aggressive traders might want to go ahead and launch new positions here. I am suggesting a trigger at $26.55 to open new bullish positions. If you do open positions I would use the January 2012 $30 call LEAPS. Don't forget that CHK is due to report earnings on Feb. 17th after the market's closing bell. Shares could see some volatility following the report. Our long-term target is still $40.00.

Oct 30th, 2009 - entry price on CHK @ 24.00, option @ 4.70
2nd entry Feb. 6th, 2009 - entry on CHK @ 24.52, option @ 3.80
symbol: VEC-AE, JAN 2011 $25 LEAP call - current bid/ask $3.80/3.90
-stop loss on CHK @ 20.95

Chart of CHK:


CNX $49.36 +0.87 -- Consol Energy Inc.

The oversold bounce in CNX continued and shares reclaimed technical resistance at the 100-dma and 50-dma. We're not out of the woods yet. CNX still has potential resistance near $50.00. The $45.00 level may be new support. If we get another dip and bounce near $45.00 we can probably use it as a new entry point. More conservative traders may want to wait for a clsoe over $51.00.

CNX hit our first target back in September. Currently the plan is to sell another portion of our position at $58.50. Our third and final target is $64.90.

Sep 1st, 2009 - entry price on CNX @ 36.50, option @ 7.80(estimate)
symbol: VTL-AH, 2011 JAN $40 LEAP call - current bid/ask $13.60/14.10
-stop loss on CNX @ 41.45

1st Target hit 09/16/09 @ 48.50, option price $15.40 (+97%)

Chart of CNX


EMR $46.21 -0.32 -- Emerson Electric Co.

Shares of EMR are still holding on to their gains. Traders bought the dip near $44.50 and the stock is close to hitting its 52-week highs again. We have nothing to complain about here. I am not suggesting new positions at this time. Our plan is to sell half of our position at our original target of $47.50. We'll sell the rest at $54.50.

Please note our new stop loss at $39.75.

Sept. 8th, 2009 - entry price on EMR @ 38.00, option @ $4.50
symbol: VHH-AH, 2011 JAN $40 call - current bid/ask $7.90/8.50
-stop loss on EMR @ 39.75

Chart of EMR:


FST $26.50 +0.85 -- Forest Oil Corp.

The rebound in FST continues. A bounce in crude oil prices certainly didn't hurt this past week. Shares of FST continue to outperform their peers. There are five trading days left until FST reports earnings on Feb. 22nd after the closing bell. Readers should expect some volatility following the report. Jim is expecting crude oil to bottom in the next week or two. If we see FST dip and retest support near $24 or its 50-dma we might want to use it as an entry point. 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 $8.50/8.90
-stop loss on FST @ 19.49

Chart of FST:


INTC $20.43 +0.37 -- Intel Corp.

INTC delivered an impressive week with a 5% gain and a breakout over resistance near $20.00 and a virtual cloud of moving averages. This is really good news but shares are still trading sideways in a wide trading range. I am not suggesting new 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 $2.43/2.48
-stop loss on INTC @ 17.90.

Chart of INTC:


MOS - Mosaic Co. $58.83 +0.41

MOS delivered a nice bounce last week following its bullish double bottom near $53.00. It looks like the company had some positive things to say at an industry conference on Feb. 10th. The good news is that shares are in a short-term up trend. The bad news is that shares are now approaching resistance near $60.00 and its 50-dma. More conservative traders may want to wait for a close over $60.00 before initiating new positions. Our long-term target is the $90-100 zone. (Readers might want to consider the 2012 LEAPS too).

NOTE: In 2009 MOS issued a special cash dividend of $1.30 per share payable back on December 3rd, 2009. The CBOE issued a new LEAPS symbol to account for the dividend. The old 2011 LEAPS have a root symbol of ZHX. The LEAPS we want to use are the ZXW root symbols.

Jan 28th, 2010 - entry price on MOS @ 56.00, option @ 6.10
symbol: ZXW-AM, 2011 LEAP $65 call - current bid/ask $7.30/7.65
-stop loss on MOS @ 49.00

Chart of MOS:


MTW $11.76 +0.41 -- Manitowoc Inc.

MTW oscillated on either side of $11.00 for a good portion of the week but finally managed a rally. Shares really out performed on Friday. The stock is nearing short-term resistance at $12.00. More aggressive traders may want to use a move over $12.00 or $12.25 as a new entry point. Please note our new stop loss at $9.45. More conservative traders may want to use a stop closer to $10.00. 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 $3.20/3.50
-stop loss on MWT @ 9.45

01/18/10 Sell Half! MTW @ 13.70, option at $4.80 bid (+83.9%)

- or -

Oct. 30th 2009 - entry price on MTW (the stock) @ 9.10
- stop loss on MTW @ 9.45

01/18/10 Sell Half! MTW @ 13.70 (+50.5%)

Chart of MTW:


ORCL $23.41 +0.06 -- Oracle Corp.

ORCL has spent a little more than two weeks now consolidating sideways along support near $23.00. I'm a little concerned that during this time shares have continued to see a bearish pattern of lower highs. Given our long-term time frame readers could still choose to open positions now. However, if this trend of lower highs persists I believe odds are we'll see ORCL dip toward $22.00 and its 200-dma. Buying a bounce from $22.00 would be more attractive. If you prefer to open positions on strength then wait for a new close over $24.00 again. Our stop loss is at $21.40. 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 $1.87/1.91
-stop loss on ORCL @ 21.40.

Chart of ORCL:


PEP $60.92 -0.27 -- PEPSICO Inc.

PEP temporarily spiked above its 50-dma and 100-dma as investors reacted to its earnings report on Feb. 11th. Wall Street was expecting a profit of 91 cents a share and revenues of $13.25 billion. PEP missed earnings by a penny but beat on the revenue side with $13.3 billion. Management said they planned to close on their acquisition of Pepsi Bottling Group (PBG) and PepsiAmericas (PAS) by the end of February. The hope is that by acquiring the company's main two bottle providers they will achieve much greater profitability.

I am encouraged by the bounce this past week but PEP still has a trend of lower highs. I am not suggesting new long-term LEAPS at this time. It is not too late to consider buying a short-term March put to protect yourself. Our exit target for the 2011 January $60 LEAP is $69.90.

If you're not interested in buying a protective put then consider raising your stop loss closer to the 200-dma near $58.00.

July 7th, 2009 - entry price on PEP @ 57.25, option @ $4.50(estimate)
symbol: VP-AL, 2011 $60.00 LEAP call - current bid/ask $4.80/4.90
-stop loss on PEP at $54.95

Temporary protective put:
Jan. 23rd, 2009 - entry price on PEP @ 60.39, option @ 0.50
symbol: PEP-OK March $55 put - current bid/ask $0.19/0.22

Chart of PEP:


POT - Potash Corp. $111.60 +0.48

We knew this was going to be a volatile play. This past week just happened to be a good one for the bulls. There was an industry conference on the 10th and it seems that analysts came away with a positive impression that demand would pick up. Shares of POT delivered a nice rebound last week with a close over potential resistance at $110 but still under technical resistance at the 50-dma. While I am bullish on POT I think readers can probably wait for another dip near $105 or even the 200-dma before launching new positions. More conservative traders may want to use a tighter stop near $95 or near the January low of $98.27. Our long-term target is $160 or higher.

Jan. 28th, 2010 - entry price on POT @ 101.00, option @ 11.75
symbol: VPT-AB, 2011 LEAP $110 call - current bid/ask $18.10/18.40
-stop loss on POT @ 89.00.

Chart of ORCL:


RAI $51.56 -0.34 -- Reynolds American Inc.

A week ago it looked like it was game over for our RAI play as shares broke down on their earnings report. Yet there has been virtually no follow through. Traders have been buying the dips near $51.00 and its rising 100-dma. Now this could just be a rest stop before RAI begins a new leg lower. Broken support near $53.00 is now new resistance. I am not suggesting new bullish positions. More conservative traders will still want to consider an early exit. Our final target is $57.50.

Please note our new stop loss at $49.75.

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 $11.00/12.20
-stop loss on RAI at $49.75

Sold Half on 10/19 @ 49.50, option @ $8.90 (+97%)

Chart of RAI:


TBT $48.81 -0.33 -- UltraShort 20+ Year Treasury Bond ProShares

Wow! What a difference a week can make. Last week I was worried about the TBT breaking down. Shares have reversed higher and spiked to $49.61 on Thursday. That doesn't mean we're out of the woods but it certainly improves our position.

The situation in Europe has not changed. Yes, there was a pep rally last Thursday where the EU leaders said they would stand behind Greece and help them get back on their feet but there were no details on what this help would look like. At the same time bond market experts are suggesting that the U.S. is close to our own "failed auction". This past week the amount of normal bidders decreased significantly and the gap was made up with bidders of unknown origin, which might suggest the U.S. is buying it's own debt to make it look like there is demand.

While I am encouraged by the action in TBT this past week I'm still not suggesting new positions. There are supposed to be new details on the Greece bailout this coming week and it the market doesn't like it then the euro will fall and the dollar will bounce and money could seek safety in U.S. bonds.

Our first long-term target is $59.75. Our second target is $67.50.

FYI: The TBT is an exchange traded fund (ETF) that tries to deliver twice the inverse performance of the Barclays Capital 20+ Year U.S. Treasury index.

Jan. 09th, 2010 - entry price on TBT @ 50.63, option @ 4.90
symbol: XRJ-AC, JAN 2011 $55 LEAP call - current bid/ask $3.40/3.75
-stop loss on TBT @ 45.90

Jan. 09th, 2010 - entry price on TBT @ 50.63, option @ 7.90
symbol: YHT-AH, JAN 2012 $60 LEAP call - current bid/ask $6.75/7.40
-stop loss on TBT @ 45.90

Chart of TBT


TLT $90.19 +0.37 -- iShares 20+Yr Bond ETF

It's the same situation with the TBT but in reverse. We were concerned the TLT was going to breakout but the ETF has reversed lower instead. I would be tempted to buy new put LEAPS here but readers may want to wait for a new relative low under $88.75 first. Our first target is $81.00.

FYI: The TLT is an exchange traded fund that tries to mimic the performance of the Barclays Capital U.S. 20+Year Treasury Bond Index.

Jan. 09th, 2010 - entry price on TLT @ 89.29, option @ 6.40
symbol: VJL-MG, JAN 2011 $85 LEAP put - current bid/ask $4.60/4.75
-stop loss on TLT @ 94.15

Jan. 09th, 2010 - entry price on TLT @ 89.29, option @ 8.90
symbol: YLI-MB, JAN 2012 $80 LEAP put - current bid/ask $6.75/7.40
-stop loss on TLT @ 94.15

Chart of TLT


UNH $32.54 +0.08 -- UnitedHealth Group Inc.

The upward trend in UNH is in trouble, at least short-term. The stock produced a failed rally/bearish reversal at $36 in January, at $34 in early February, and now shares are testing support near $32.00 and its 50-dma. I've been suggesting that UNH will eventually retreat toward $30.00, which should be significant support. Wait for the dip near $30.00 or better yet a bounce before launching new long-term call LEAPS positions.

The plan was to use small positions to limit our risk. Our long-term target is $42.50.

FYI: In the news on Feb. 10th UNH issued a press release stating the company is issuing a cash dividend of 3 cents per share to be paid on April 20, 2010 to shareholders on record as of April 6th. As LEAPS holders we will not benefit from the dividend. The Board of Directors also announced they will renew their stock buyback program up to 120 million shares. The company purchased 74 million shares throughout 2009 with an average price of $24.26 a share.

Dec 16th, 2009 - entry price on UNH @ 31.55, option @ 3.80
symbol: VUH-AG, 2011 JAN $35 LEAP call - current bid/ask $3.25/3.35
-stop loss on UNH @ 28.95

Chart of UNH:


VICR $ 9.50 +0.14 -- VICOR Corp.

Last week I suggested readers buy LEAPS again but I'll be honest. I wasn't expecting a 13.3% rally in the last five days. I couldn't find any news to account for the huge relative strength. VICR doesn't seem to have that much short interest but it certainly looks like a short squeeze. The stock skyrocketed off the $8.00 level and soared past resistance near $9.l00 and its 50-dma. The next obstacle is round-number resistance at $10.00. Of course the problem now is VICR looks short-term overbought. I'm not suggesting new positions at this time.

Our twelve-month target is the $13.50-14.00 zone (one reason I prefer the stock over the option). Remember, if the market dips in January VICR will probably dip with it.

Dec 26th, 2009 - entry price on VICR@ 9.30, option @ 1.40
symbol: VQV-GB, 2010 JUL $10 call - current bid/ask $0.85/1.10
-stop loss on VICR @ 7.45

--2nd Entry Point--
Feb 6th, 2009 - entry price on VICR @ 8.38, option @ 0.70
symbol: VQV-GB, 2010 JUL $10 call - current bid/ask $0.85/1.10
-stop loss on VICR @ 7.45

- or -

Dec. 26th 2009 - entry price on VICR (the stock) @ 9.30
-stop loss on VICR @ 7.45

Chart of VICR: