Closed Plays


None. No closed plays this week.


Play Updates


Baidu, Inc. (Baidu.com) - BIDU - close: 82.17 change: +0.98

BIDU only lost about 60 cents on the week. The pull back, thanks to market weakness, is giving us another entry point near support at $80.00. Yet I'm much more cautious now given the action in stocks. I would like to think the $80 level will hold as support but if the market continues to sink BIDU could easily dip to $77 or $75.00. Right now I am suggesting we stay defensive. Wait for a dip or a bounce near $75.00 as our next entry point.

Previous Comments:
BIDU is a very volatile stock. This is an aggressive, higher-risk trade. Keep your position size small to limit your risk. Our first long-term target is $99.50.

Aug 02, 2010 - entry price on BIDU @ 83.50, option @ 8.00
symbol: BIDU1122A90 2011 JAN $90 call - current bid/ask $6.95/7.10
-stop loss on BIDU @ 73.40

- or -

Aug 02, 2010 - entry price on BIDU @ 83.50, option @ 13.00
symbol: BIDU1221A100 2012 JAN $100 call - current bid/ask $12.10/12.35
-stop loss on BIDU @ 73.40

Chart of BIDU:


BorgWarner Inc. - BWA - close: 45.51 change: +0.25

BWA is still holding up pretty well. Shares managed a 20-cent gain for the week and support near $44 is still in play. News on BWA has been quiet. If the market continues to pull back I would expect BWA to test the $42.00 level. If you're looking for a new entry point wait for a new bounce near $42. We only have a very small position left.

Prior Comments:
Our second and final long-term target is $49.75.

Feb 17th, 2010 - entry price on BWA @ 37.55, option @ 3.90
symbol: BWA1122A40 2011 JAN $40 LEAP call - current bid/ask $7.70/8.60
-stop loss on BWA @ 39.75

05/29/10 Sell half of remaining position, BWA @ 37.26, option @ 3.90 (+0.00%)
04/29/10 1st Target Hit, BWA @ 44.50, option @ $7.63 (+95%)

Chart of BWA:


ConocoPhillips - COP - close: 53.89 change: -0.82

Oil stocks suffered the last few days as investors worried the slow down in the U.S. would affect demand for oil. Inventory numbers support the bears case right now with stock piles near multi-year highs. Thus far shares of COP have been testing the 38.2% Fibonacci retracement of their July-August rally but Friday saw a dip under the 50-dma and a dip toward the 50% retracement. Last week I warned readers that COP could dip toward the 200-dma near $52.50. I still believe that is a strong possibility. I am not suggesting new bullish positions at this time but a strong bounce near $52 might change that.

More conservative traders might want to raise their stop loss toward $51.50.

Prior Comments:
Our first target is $69.00.

May 20, 2010 - entry price on COP @ 51.00, option @ 3.75
symbol: COP 11A55.00 2011 JAN $55 call - current bid/ask $3.20/3.30
-stop loss on COP @ 47.99

- or -

May 20, 2010 - entry price on COP @ 51.00, option @ 4.75
symbol: COP 11A55.00 2012 JAN $60 call - current bid/ask $4.00/4.15
-stop loss on COP @ 47.99

07/17/10 COP's bounce has failed. Consider an early exit!
07/03/10 More Conservative traders may want to exit early!

Chart of COP:


Carpenter Technology - CRS - close: $33.26 change -0.57

Attention! I'm about ready to give up on our CRS play. The stock is underperforming its peers in the steel and metal industry. Shares have been unable to break the bearish trend of lower highs. We've seen CRS test support near $31.50 three times now. More conservative traders will want to seriously consider an early exit immediately. I am raising our stop loss to $30.90, which is still under the early July low ($31.20). I am not suggesting new bullish positions at this time.

FYI: This past week CRS declared a quarterly cash dividend of 18 cents a share, payable on September 3rd, 2010 to shareholders of record on August 31st.

Previous Comments:
The plan was to initiate small positions to limit our risk. Our long-term target is $44.75.

June 29, 2010 - entry price on CRS @ 34.00, option @ 5.30*
symbol: CRS 10L35.00 2010 DEC $35 call - current bid/ask $2.75/2.95
-stop loss on CRS @ 30.90 *(entry price is an estimate)

Chart of CRS:


EMC Corp. - EMC - close: 18.69 change: +0.14

Tech stocks continued to struggle. However, the Intel-McAfee deal has sparked new interest in the possibility of new mergers and acquisitions in the tech sector. Corporations are sitting on piles of cash. EMC could be a potential buyer but that is pure speculation. This past week saw EMC consolidate sideways above support near its rising 200-dma. More aggressive traders could initiate positions here but I would prefer to see some strength, like a close over $19.50 again.

Previous Comments:
Our first target is $22.50. Our second, longer-term target is $24.75.

May 6, 2010 - entry price on EMC @ 18.25, option @ 1.40
symbol: EMC 11A20.00 2011 Jan $20 call - current bid/ask $0.93/0.95
-stop loss on EMC @ 17.80

- or -

May 6, 2010 - entry price on EMC @ 18.25, option @ 2.50
symbol: EMC 12A20.00 2012 Jan $20 call - current bid/ask $2.30/2.43
-stop loss on EMC @ 17.80

07/03/10 More Conservative Traders may want to exit early!

Chart of EMC:


SPDR Gold ETF - GLD - close: 119.97 change: -0.42

Gold and the GLD have done a pretty good job ignoring the rally in the U.S. dollar. Normally a rising dollar has a bearish impact on gold prices but not this week. The long-term and short-term trend for the GLD is still up but I am concerned the GLD is starting to look a bit overbought with a strong four-week bounce. We can look for short-term support near $118.00 or $116.00. If you're looking for a new bullish entry point wait for a dip or a bounce near $116.00.

Previous Comments
Currently our stop loss is at $111.00. Our first long-term target is $140.

Aug 6, 2010 - entry price on GLD @ 118.00, option @ 7.70
symbol: GLD1119C120 2011 Mar $120 call - current bid/ask $8.05/8.20
-stop loss on GLD @ 111.00

- or -

Aug 6, 2010 - entry price on GLD @ 118.00, option @ 10.75
symbol: GLD1221A130 2012 Jan $130 call - current bid/ask $11.20/11.50
-stop loss on GLD @ 111.00

Weekly Chart of GLD:


Infosys Technologies - INFY - close: 59.57 change: -0.05

The Indian Bombay-Sensex index broke out to new two-year highs on Thursday this past week. Unfortunately shares of INFY are not seeing much benefit from its home-country strength. INFY is stuck in a trading range. You could argue it's in a neutral consolidation pattern. I am growing more concerned with the stock's performance. More conservative traders may want to cut back on their position size or raise their stop loss toward $56.00. I am not suggesting new positions at this time.

Previous Comments:
We have a stop loss at $54.90. Our long-term target is $79.00.

July 1, 2010 - entry price on INFY @ 59.00, option @ 7.50
symbol: INFY 11A60.00 2011 Jan $60 call - current bid/ask $4.60/ 4.80
-stop loss on INFY @ 54.90

- or -

July 1, 2010 - entry price on INFY @ 59.00, option @ 8.20
symbol: INFY 12A65.00 2012 Jan $65 call - current bid/ask $7.10/ 7.50
-stop loss on INFY @ 54.90

Chart of INFY:


Intuitive Surgical - ISRG - close: 293.50 change: -13.00

ISRG was a new watch list candidate last weekend. The plan was to buy long-term puts if ISRG broke down and hit $299.00. Shares managed to lose more than $22 for the week and broke down under support near $300 on Friday. Our trigger was hit pretty early Friday morning. If you missed the entry point I would still consider new positions now or wait for a bounce back toward the $300 level, which should now act as new resistance.

This past week ISRG was in the news after Cardica Inc. reported its earnings and revealed a licensing deal with ISRG. The deal, worth $12 million to Cardica, gives ISRG 1.25 million shares of stock in the company and a worldwide exclusive license for Cardica's intellectual property for designs on tissue cutting, stapling, etc. It's not a big deal for ISRG, which has revenues of $1.28 billion and nearly a billion in cash.

What is a big deal was the breakdown in ISRG. Volume was more than twice the norm as shares broke down on Friday. I want to remind readers that ISRG is a volatile stock. We're starting this play with a stop loss at $321. Our first target is $250 (although we might exit early near $260). Keep your positions small.

I'm suggesting an option significantly out of the money. This is probably going to be a real black or white win/lose situation.

This is a PUT play.

Aug 20, 2010 - entry price on ISRG @ 299.00, option @ 14.00
symbol: ISRG 11m250 2011 Jan $250 PUT - current bid/ask $13.90/14.80
-stop loss on ISRG @ 321.00

Chart of ISRG:


McDonald's Corp. - MCD - close: 73.08 change: +0.11

It was a pretty good week for MCD considering the action in the market. Shares of MCD hit a new all-time high and claimed a "first" in China. The company made headlines on Thursday. Quoting the Wall Street Journal, "McDonald's became the first nonfinancial foreign company to launch a yuan-denominated bond in Hong Kong." MCD raised about 200 million yuan (equal to $29.5 million) in three-year bonds that pay 3% interest. MCD, which already has more than 1,100 stores in China, said they will use the money to fuel their expansion with plans to open more than 150 more locations in the next 12 months. You're probably thinking $29 million isn't a big deal for MCD but it could pave the way for more U.S. companies to raise money with debt auctions in the local Chinese currency.

FYI: The 2011 Jan $70 calls have doubled. Readers may want to take some money off the table.

Prior Comments:
Keep your positions small. Our long-term target is $79.75. FYI: The Point & Figure chart forecasting an $82 (long-term) target.

June 29, 2010 - entry price on MCD @ 66.50, option @ 2.65
symbol: MCD 11A70.00 2011 Jan $70 call - current bid/ask $5.20/ 5.30
-stop loss on MCD @ 64.75

- or -

June 29, 2010 - entry price on MCD @ 66.50, option @ 2.20
symbol: MCD 12A80.00 2012 Jan $80 call - current bid/ask $3.45/ 3.60
-stop loss on MCD @ 64.75

07/17/10 Take Profits! 2011 Jan $70 call @ 4.00 (+51%), 2012 $80 call @ 3.50 (+59%)

Chart of MCD:


Millicom Intl. - MICC - close: 92.07 change: -0.51

After a painful decline two weeks ago MICC managed a decent bounce but the rebound is stalling. The bearish reversal pattern created two weeks ago has not been canceled out yet. While I'm still long-term bullish on MICC if the wider market continues to sink we can expect a correction toward $85 or possibly the simple 200-dma. I am not suggesting new bullish positions at this time.

Previous Comments:
Keep your positions small to limit your risk. MICC is (normally) a volatile stock. Our long-term target is $99.50 and the $109.00 levels.

May 6, 2010 - entry price on MICC @ 80.00, option @ 8.60
symbol: MICC 11A90.00 2011 Jan $90 call - current bid/ask $ 9.30/10.10
-stop loss on MICC @ 79.90

Chart of MICC:


NetApp, Inc. - NTAP - close: 40.53 change: -0.17

It was a good week for bulls in NTAP. The stock rebounded from its rising 100-dma and the company delivered a decent earnings report. NTAP reported on Aug. 18th and beat estimates by 3 cents with a profit of 49 cents a share. Revenues just edged past estimates at $1.14 billion. The results garnered at least one new price target ($44) from analysts.

Technically the bounce is struggling near NTAP's 30 and 50-dma plus the stock has potential resistance near $42. Given the market's recent weakness I would stay cautious when it comes to new entries. We might see another entry point near $38 or even the $36 area. On a positive note the Intel-McAfee deal has increased speculation for more M&A in the tech sector.

Previous Comments:
We are using a stop loss at $34.75. Our long-term target is $49.00.

Aug 12, 2010 - entry price on NTAP @ 37.50, option @ 3.00
symbol: NTAP1122A40 2011 Jan $40 call - current bid/ask $ 4.35/ 4.45
-stop loss on NTAP @ 34.75

- or -

Aug 12, 2010 - entry price on NTAP @ 37.50, option @ 4.00
symbol: NTAP1221A45 2012 Jan $45 call - current bid/ask $ 5.25/ 5.45
-stop loss on NTAP @ 34.75

Chart of NTAP:


Occidental Petroleum - OXY - close: 75.06 change: -0.33

OXY continues to sink but I'm a bit disappointed with the action this week. OXY was on our watch list with a plan to buy puts if shares hit $74.00. The stock dipped to $73.90 on Monday and quickly rebounded. While the bounce failed and OXY struggles with a trend of lower highs I'm surprised the stock hasn't seen more weakness, especially given the weakness in oil. After months and months of bouncing near the $75-74 zone a breakdown under $74 should be very bearish.

Our play is open but I am suggesting readers look for a move to $73.50 before launching new bearish positions. We have a stop loss at $80.25. Our first target is $65.50. Our second target is $60.25. I prefer the 2012 puts over the 2011 puts but both should work.

- This is a PUT Play -

Aug 16, 2010 - entry price on OXY @ 74.00, option @ 2.17
symbol: OXY1122M60 2011 Jan $60 put - current bid/ask $ 2.09/ 2.17
-stop loss on OXY @ 80.25

- or -

Aug 16, 2010 - entry price on OXY @ 74.00, option @ 6.58
symbol: OXY1221M60 2012 Jan $60 put - current bid/ask $ 6.35/ 6.55
-stop loss on OXY @ 80.25

Chart of OXY:


PEPSICO Inc. - PEP - close: 64.80 change: +0.14

Shares of PEP only lost 11 cents for the week but the stock is slowly rolling over. We can probably expect a pull back toward $63-62 again. More conservative traders may want to exit early. We're not suggesting new positions at this time.

Previous Comments:
Our final target remains $72.25.

July 7th, 2009 - entry price on PEP @ 57.25, option @ $4.50(estimate)
symbol: VP-AL, 2011 $60.00 LEAP call - current bid/ask $6.10/6.20
-stop loss on PEP at $59.85

06/26/10 Repeat - More cautious traders will want to consider an exit.
06/05/10 More cautious traders may want to exit now to avoid a loss.

03/27/10 SELL HALF: PEP $ 66.59, Option @ $8.00 (+77.7%)

Chart of PEP:


Transocean Ltd. - RIG - close: 51.00 change: -1.31

RIG gave up about $3 for the week but the pull back toward $50.00 looks like another entry point for us. Shares have been volatile as investors fret over the slowing U.S. economy and what that means for oil demand. The weakness in oil may not be over so patient investors might want to wait and see if we get an even better entry point to buy calls on RIG near $47-45. More conservative traders may want to raise their stop loss toward the July low of $44.30.

Previous Comments:
This is a very aggressive trade given the unknown risks associated with RIG's connection to the Gulf oil spill. Our long-term targets are $59 and $75. FYI: The P&F chart is forecasting an $82 target.

Jun 09, 2010 - entry price on RIG @ 43.50, option @ 6.50
symbol: RIG 11A50.00 2011 Jan $50 call - current bid/ask $ 6.80/ 6.95
-stop loss on RIG @ 41.80

- or -

Jun 09, 2010 - entry price on RIG @ 43.50, option @ 7.25
symbol: RIG 12A60.00 2012 Jan $60 call - current bid/ask $ 7.20/ 7.45
-stop loss on RIG @ 41.80

Chart of RIG: