Closed Plays


None. No closed plays this week.


Play Updates


Arch Coal Inc. - ACI - close: 22.57 change: -0.08

ACI did manage a gain for the week but I'm concerned the bounce is stalling under technical resistance at the 100-dma. The stock might dip again and retest the $21.00-20.00 zone before moving higher. I suggest you look for the dip and then buy LEAPS on the bounce.

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 $1.25/1.40
-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 $4.40/4.80
-stop loss on ACI @ 18.99

Chart of ACI:


Biogen IDEC - BIIB - close: 56.61 change: +0.63

BIIB was on our watch list. The rally in biotech stocks continued and BIIB hit our trigger to buy LEAPS at $56.60 on Friday. I would still consider new positions now but since I am expecting a dip in the market readers could be patient. You might get a better entry point near $54.00. Our first target to take profits is at $64.90.

Feb 19th, 2010 - entry price on BIIB @ 56.60, option @ 4.60
symbol: OIY1122A60 2011 JAN $60 LEAP call - current bid/ask $4.30/4.70
-stop loss on BIIB @ 51.85

Chart of BIIB:


Berkshire Hathaway Inc. - BRK.B - $78.74 +2.10

It was another strong week for shares of Berkshire. Friday was very strong with a 2.7% gain and a breakout to new 52-week highs and past short-term resistance near $78.00. I'd rather not chase it here if you're looking for a new entry point. The stock will eventually correct again. The $80.00 level could prove to be round-number resistance. Although on the positive side of things I'm not longer worried about a bearish double top at $78.00. Remember, this is a long-term hold for us.

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 $6.00/6.40
-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 $7.50/8.20
-stop loss on BRK.B @ 64.95

Chart of BRK.B:


BorgWarner Inc. - BWA - close: 37.35 change: +0.27

BWA was another watch list candidate that hit our trigger to buy LEAPS last week. The entry point was $37.55. Chart readers will notice that BWA has broken out from its bearish trend of lower highs and a four-week consolidation. I would still consider bullish positions now although I am expecting a little market dip. Readers could wait for a dip toward $36.00. Our first target is $44.50. Our second target is $49.75. FYI: More conservative traders might want to use a stop loss closer to $34.00.

Feb 17th, 2010 - entry price on BWA @ 37.55, option @ 3.90
symbol: ZWY1122A40 2011 JAN $40 LEAP call - current bid/ask $3.60/4.20
-stop loss on BWA @ 31.90

Chart of BWA:


Chesapeake Energy Corp. - CHK - close: 27.59 change: +0.13

It has been a very strong week for CHK in spite of weakness for natural gas prices. The reported better than expected earnings and garnered some analyst upgrades. The stock is surging but now looks short-term overbought. Our long-term target is $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 $5.25/5.35
-stop loss on CHK @ 20.95

Chart of CHK:


Consol Energy Inc. - CNX - close: 49.91 change: +0.24

The bounce in shares of CNX has stalled. I wouldn't be surprised to see shares consolidate back down toward the $47.50 region or even support near $45.00. How low it dips could really depend on commodity strength this week. I'll repeat my comments from last week. More conservative traders may want to wait for a close over $51.00 before considering new bullish positions.

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 $13.70/14.20
-stop loss on CNX @ 41.45

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

Chart of CNX


EMR $48.08 +0.35 -- Emerson Electric Co.

Target achieved. The rally in EMR continued and shares broke to new 52-week highs. The stock hit our target to sell half the position at $47.50 on Feb. 18th. I am raising our stop loss to $41.90. Our second and final target is still $54.50. I am not suggesting new positions at this time. The $50.00 level could easily be round-number, psychological resistance. We should expect resistance and some profit taking.

Sept. 8th, 2009 - entry price on EMR @ 38.00, option @ $4.50
symbol: VHH-AH, 2011 JAN $40 call - current bid/ask $9.10/9.70
-stop loss on EMR @ 41.90

02/18/10 1st Target hit @ 47.50, option @ $8.80 (+95.5%)

Chart of EMR:


Forest Oil Corp. - FST - close: 27.01 change: +0.32

Shares of FST were seeing some volatility last week with a big gap higher on the 16th and a bearish reversal pattern on the 17th. Thankfully there was no follow through on the bearish reversal but we can expect more volatility this week. FST is due to report earnings on Feb. 22nd after the closing bell. Wall Street expects a profit of 60 cents a share. I am not suggesting new positions at this time. We need to see how the stock reacts following its report. Please note our new stop loss at $21.75. More conservative traders may want to use a stop closer to $23.00 or $24.00. 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 $8.80/9.20
-stop loss on FST @ 21.75

Chart of FST:


Intel Corp. - INTC - close: 20.82 change: -0.02

INTC posted a gain for the week but most of it happened on Tuesday's gap higher. Shares have been consolidating sideways since the gap. DELL's earnings did not have much of an affect on INTC. Shares are close to recent resistance in the $21-22 zone so it's not surprising to see shares stall. If the trading range holds then we can expect a dip back toward the $19 region. 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 $2.49/2.52
-stop loss on INTC @ 17.90.

Chart of INTC:


Mosaic Co. -MOS - close: $60.78 change: +0.22

MOS managed a decent gain for the week but most of it happened on Tuesday's gap open higher. I did hear some news about declining potash inventory levels, which should be bullish for the industry. Shares have been spending the last few days holding above prior resistance and what should be support near $60 and its 50-dma. Although this "support" is so new if the market sees any real dip I don't expect it to hold. I suggested that more conservative traders wait for a move over $60 before launching positions and you got it last week. 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 $7.75/8.15
-stop loss on MOS @ 49.00

Chart of MOS:


Manitowoc Inc. - MTW - close: 12.25 change: -0.08

MTW's rally ran out of steam under $13.00. If the pull back continues I would look for support near $11.50 or near the 50-dma around $11.00. The real challenge for MTW will be to rally past its January highs. 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 $3.60/3.90
-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:


Oracle Corp. - ORCL - close: 24.32 change: -0.20

Last week was very healthy for ORCL. The stock broke out from its consolidation pattern, which had started to turn bearish on us. Shares rallied past the 50-dma and potential resistance at $24.00. I would be tempted to buy LEAPS at current levels or on dips near $23.50. 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 $2.11/2.15
-stop loss on ORCL @ 21.40.

Chart of ORCL:


PEP $62.66 +0.13 -- PEPSICO Inc.

Last week may have been a turning point for PEP. The trading definitely took on a more positive tone with a breakout past its 50 and 100-dma. The bounce did pause at its January highs but that's better than a lower high. Another positive last week was news that shareholders of both Pepsi Bottling Group (PBG) and PepsiAmericas (PAS) has approved the merger with PEP.

I still hesitate to launch new long-term LEAPS with PEP still under resistance at $63.00. Although it is worth noting that our protective March put may not be needed any more. We'll have to wait and see. Our exit target for the 2011 January $60 LEAP is $69.90.

July 7th, 2009 - entry price on PEP @ 57.25, option @ $4.50(estimate)
symbol: VP-AL, 2011 $60.00 LEAP call - current bid/ask $5.45/5.60
-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 $0.06/0.08

Chart of PEP:


Potash Corp. - POT - close: $115.14 change: -0.06

The rally continues for POT with another weekly gain although it looks like momentum could be slowing a bit. There was some talk last week of declining potash inventories, which should be bullish for the industry. Shares of POT look a little bit overbought so I wouldn't be surprised to see a dip back toward $110-107.50ish. Please note that I am raising the stop loss to $94.75. 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 $19.10/19.70
-stop loss on POT @ 94.75

Chart of ORCL:


PartnerRe Ltd. - PRE - close: 79.25 change: +0.51

Our new trade on PRE is off to a nice start. The rally did not slow down in the least with shares up another four days in a row. PRE is definitely short-term overbought now. I would wait for a dip before considering new positions. The $76-74 zone should offer some support. Our first target is $84.90. Our second, longer-term target is $97.50. We'll use a stop loss at $69.75. More conservative traders might be able to get away with a stop closer to $71.50.

Feb. 13th, 2010 - entry price on PRE @ 76.28, option @ 2.70
symbol: PRE1021H80, 2010 AUG $80 call - current bid/ask $3.70/4.10
-stop loss on PRE @ 69.75

Chart of PRE:


Reynolds American Inc. - RAI - close: 52.67 change: +0.27

The oversold bounce in RAI continues but we're still in jeopardy. RAI appears like it will have resistance near $53.00 and its 50-dma. A failure in this area will be a bearish reversal and a sign that we might want to exit early! More conservative traders will still want to consider an early exit now. I am not suggesting new positions. Our final exit 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 $11.60/13.10
-stop loss on RAI at $49.75

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

Chart of RAI:


UltraShort 20+ Year Treasury Bond ProShares - TBT - cls: 49.57 chg: -0.42

The TBT continues to move our direction with a spike over $50 last week. However, this trade is turning out to be more volatile than anticipated. We could see more volatility as currencies dance around affecting bond yields. This news about Greece trying to sell five billion euros worth of ten-year bonds in the next week or two could have a big impact on the dollar/euro relationship. If the U.S. ever sees its own "failed auction" we will see even crazier volatility.

While I am encouraged by the action in TBT this past week I'm still not suggesting new positions.

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 $3.15/3.50
-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 $6.70/7.05
-stop loss on TBT @ 45.90

Chart of TBT


iShares 20+Yr Bond ETF - TLT - close: 89.45 change: +0.48

The inverse to our TBT trade is the TLT. This ETF sank to new relative lows on Thursday. If the TLT bounces look for it to find some short-term resistance in the $91.00 region. 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 $4.70/4.85
-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 $6.95/7.30
-stop loss on TLT @ 94.15

Chart of TLT


UnitedHealth Group Inc. - UNH - close: 31.94 change: -0.75

The correction in shares of UNH continues. We've been expecting a pull back toward $30.00 for a while but it's taking a lot longer than expected. Shares just closed under their 50-dma again and with the pattern of lower highs I'm still short-term bearish. The $30.00 level should be very significant support. Wait for a dip or a bounce near $30.00 before considering new long-term LEAPS positions.

The plan was to use small positions to limit our 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 $2.95/3.05
-stop loss on UNH @ 28.95

Chart of UNH:


VICOR Corp. - VICR - close: 9.54 change: -0.24

Hmm... it looks like the rally in VICR is running out of steam as it near resistance at $10.00. The action this past week, especially on Thursday and Friday looks like a potential failed rally pattern. I would expect a correction back toward the $9.00 area. 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).

Dec 26th, 2009 - entry price on VICR@ 9.30, option @ 1.40
symbol: VQV-GB, 2010 JUL $10 call - current bid/ask $0.80/1.15
-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 $0.80/1.15
-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: