Closed Plays


CRS was stopped out.


Play Updates


Baidu, Inc. (Baidu.com) - BIDU - close: 79.37 change: +2.77

Shares of BIDU traded as we expected with a dip into the $77-75 zone. Traders bought the dip twice near $76.00 and it looks like a short-term (bullish) double bottom. A close over $80 would be another short-term bullish development. While I would be tempted to launch new bullish positions here or on a close over $80 I am not convinced the sell-off in the market is done. That means BIDU may hit a new relative low before the year ends (I'm thinking some time in September or early October). If you choose to launch new positions keep your position size small. Longer-term I'm still bullish on BIDU but this can be a very volatile stock.

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 $5.75/5.90
-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 $10.95/11.15
-stop loss on BIDU @ 73.40

Chart of BIDU:


BorgWarner Inc. - BWA - close: 44.09 change: +0.88

We were expecting BWA to test the $42.00 level and shares dipped to $42.18 on Wednesday. Traders bought the dip near the stock's rising 50-dma. While BWA does look poised to bounce there is some short-term resistance near the $44.50-45.00 zone. I am still expecting shares to rise toward $50 before the year is over. If you're looking for a new entry point the dip to $42 or this bounce could work but I suggest a much tighter stop loss (like maybe $41.90). FYI: In the news this past week BWA said they were expanding one of their plants in Mississippi and would add 120 new jobs by the end of 2012.

Prior Comments:
We have taken profits on BWA before and only have a small position left. 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 $7.00/7.60
-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: 53.42 change: +1.01

Shares of COP flirted with a breakdown under technical support at its simple 200-dma but there was no follow through selling and the stock managed a bounce. The dip toward $52 was almost enough to hit the 61.8% Fib retracement of its July-August rally. The short-term trend remains down but oil stocks look like they produced a bullish reversal last week - at least on a short-term basis. Traders may want to consider new positions on a move over $54.00 but keep them small. It would be an aggressive entry point and I would suggest you use a much tighter stop loss (maybe near $52).

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 $2.85/2.91
-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 $3.90/4.20
-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:


EMC Corp. - EMC - close: 18.37 change: +0.32

EMC is all about data storage. I'm sure they are watching the current bidding war between DELL and HPQ over 3PAR with plenty of interest. There was even some speculation that EMC could join the fray and try and buy 3PAR as a defensive move to prevent DELL or HPQ from leaping into the cloud-computing and cloud-storage business model. If that were to happen, EMC making a bid for 3PAR, shares of EMC would likely gap open lower and our play would get stopped out. However, no one really expects EMC to make a play, not with DELL and HPQ fight for 3PAR.

While we're on the subject of EMC's stock price moving lower we were almost stopped out on Wednesday, Aug. 25th when EMC dipped to $17.90. Fortunately EMC seems to have found some support near $18.00, which is what we expected. I would be tempted to launch new bullish positions here (with the 2012 call LEAPS). More conservative traders could wait for a close over $19.00 or $19.50 before initiating positions.

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 $0.72/0.76
-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 $2.09/2.24
-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: 121.01 change: +0.05

Be careful here! The GLD posted another gain for the week but it also looks like this ETF and gold have produced a short-term top, especially with Thursday's intraday reversal lower. I am expecting the GLD to retrace back toward the $116.00 area. Wait for the dip or a bounce there before considering new long-term positions. Gold will continue to garner buying interest as the U.S. economy continues to slow down.

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 $8.40/8.50
-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 $11.55/11.85
-stop loss on GLD @ 111.00

Weekly Chart of GLD:


Infosys Technologies - INFY - close: 58.01 change: -0.28

It was a rough week for the Indian stock market. After hitting new two-year highs two weeks ago the Indian market dove sharply. This helped propel shares of INFY lower. The stock broke down under its 200-dma and short-term support near $58.00 on Friday but managed to bounce back by the closing bell. If this stock closes under $56.00 the long-term up trend might be broken. On a short-term basis the trend is still down but a close over $60.00 might affirm the reversal and could be a new bullish entry point.

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 $3.70/ 3.90
-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 $5.60/ 6.90
-stop loss on INFY @ 54.90

Chart of INFY:


Intuitive Surgical - ISRG - close: 273.07 change: + 5.11

Take profits now! I am suggesting we sell part of our position now to take some money off the table. While the short-term trend is down shares of ISRG bounced from $262 to $273 on Friday. Shares could see a sharp oversold bounce back toward $290-300 before rolling over again. We can evaluate a new entry point when we see ISRG fail under resistance at $300. Please note our new stop loss at $311.00.

Previous Comments:
I'm suggesting an option significantly out of the money. This is probably going to be a real black or white win/lose situation. Our long-term target is $250.00. The plan was to use small positions to limit our risk.

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 $18.30/21.50
-stop loss on ISRG @ 311.00

08/28/10 Take Profits, sell half @ $18.30 (+30.7%)

Chart of ISRG:


McDonald's Corp. - MCD - close: 73.99 change: +0.83

One company that is doing well during this economic slow down is Mickey D's. Consumers are nervous and watching their budget, which makes MCD's value meal so attractive. The stock hit a new closing high on Friday and is up +18% this year, placing MCD in the running to be the best performing component in the Dow Jones Industrial Average this year. I am not suggesting investors chase MCD at this time but we can look for short-term support near $72 and $70 on pull backs. Please note I am raising the stop loss to $66.75. You may want to raise yours even higher.

Prior Comments:
Keep your positions small. Our long-term target is $79.75. FYI: The Point & Figure chart forecasting an $91 (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 $5.70/ 5.85
-stop loss on MCD @ 66.75

- or -

June 29, 2010 - entry price on MCD @ 66.50, option @ 2.20
symbol: MCD 12A80.00 2012 Jan $80 call - current bid/ask $3.80/ 4.00
-stop loss on MCD @ 66.75

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: 92.69 change: +2.22

MICC managed a gain for the week but shares are still consolidating sideways in side the neutral pattern of higher lows and lower highs. The stock should see a breakout soon one way or the other. Please note the new stop loss at $82.90.

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 @ 82.90

Chart of MICC:


NetApp, Inc. - NTAP - close: 41.45 change: +1.76

The oversold bounce in NTAP hits week two and shares posted a strong gain on Friday to close near resistance in the 41.50-42.00 zone. If NTAP where to fail here, under $42, it would look like the right shoulder to a bearish head-and-shoulders pattern (neckline would be in the $37-36 area). Meanwhile in other news the bidding war for 3PAR could have investors looking at NTAP as a potential takeover candidate. There hasn't been any specific rumors regarding NTAP but it is a possibility.

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 $ 5.00/ 5.25
-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 $ 5.65/ 6.25
-stop loss on NTAP @ 34.75

Chart of NTAP:


Occidental Petroleum - OXY - close: 75.42 change: +3.19

The Q2 GDP revisions were bad but they were not as bad as the whisper numbers (which were closer to +1.0% growth). Oil and energy stocks rallied on the news and OXY saw some short covering with a +4.4% pop on Friday. The close back above $74 and $75 is certainly short-term bullish and puts us in jeopardy. The stock could easily see an oversold bounce back toward the $78-80 zone. I am suggesting we wait for the next failed rally, most likely in the same $78-80 zone, before we consider new bearish positions.

Previous Comments:
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 $ 1.93/ 2.01
-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 $ 6.20/ 6.45
-stop loss on OXY @ 80.25

Chart of OXY:


PEPSICO Inc. - PEP - close: 64.12 change: -0.01

Pepsi under performed the market on Friday but traders did buy the dip near its 200-dma. I am expecting the intraday bounce to continue on Monday but I remain cautious. 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 $5.60/5.70
-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: 52.03 change: +1.38

Thanks to the bounce on Friday RIG gained about a $1 for the week. Overall shares have been consolidating sideways in a narrow range above the $50.00 level. Oil-related stocks saw a strong bounce Friday since the Q2 GDP estimates were not as bad as feared. I remain bullish on RIG and would still consider new positions here but more conservative traders may want to wait for a new rise over $55 before launching positions. 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 $ 7.15/ 7.35
-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 $ 7.65/ 7.85
-stop loss on RIG @ 41.80

Chart of RIG:


Starbucks Corp. - SBUX - close: 23.47 change: +0.20

SBUX has made the leap from watch list to play list with a breakdown to new two-month lows. Shares have spent the last few months building a bearish top formation and last week's breakdown under $23.50 was the signal. We had a trigger to buy put options at $23.30, which was triggered on Tuesday, Aug. 24th. SBUX did produce a technical, bullish reversal pattern on Wednesday but has not seen much follow through. The $23.50-24.00 zone should be short-term overhead resistance.

I would still consider new bearish positions now. However, with the market poised to bounce we might get a better entry point to buy puts on SBUX on a bounce near $25.00. Please note I'm moving the stop loss to $25.15. Our first target to take profits is at $20.15. Our second target is $18.25. FYI: The Point & Figure chart just produced a new sell signal this past week and is forecasting at $17 target.

- This is a PUT Play -

Aug 24, 2010 - entry price on SBUX @ 23.30, option @ 1.16
symbol: SBUX1122M20 2011 Jan $20 put - current bid/ask $ 0.92/ 0.96
-stop loss on SBUX @ 25.15

- or -

Aug 24, 2010 - entry price on SBUX @ 23.30, option @ 2.65
symbol: SBUX1221M20 2012 Jan $20 put - current bid/ask $ 2.70/ 2.82
-stop loss on SBUX @ 25.15

Chart of SBUX:


CLOSED Plays

Carpenter Technology - CRS - close: $31.38 change +0.68

Last week I warned readers that CRS looked weak and suggested cautious traders exit early. Wish we had chosen to exit ourselves! The stock broke down under support to hit new relative lows on Tuesday and in the process hit our stop loss at $30.90. This move breaks the neckline to a bearish head-and-shoulders pattern that should forecast a move toward $25.

Previous Comments:
The plan was to initiate small positions to limit our risk.

08/24/10 - Stopped out @ $30.90, option @ $1.90 (-64%)

June 29, 2010 - entry price on CRS @ 34.00, option @ 5.30*
symbol: CRS 10L35.00 2010 DEC $35 call - current bid/ask $1.85/2.05
-stop loss on CRS @ 30.90 *(entry price is an estimate)

Chart of CRS: