Closed Plays


BWA and SBUX


Play Updates


Baidu, Inc. (Baidu.com) - BIDU - close: 84.30 change: +1.69

The market's widespread rally helped BIDU gain about five points for the week. The close over $80 was bullish and the stock continued to surge although volumes remain light. The lows near $76 might be a new base for the stock and more conservative traders will want to think about raising their stop losses. Both $80 and $76 should act as future support. BIDU is arguably short-term overbought so don't be surprised to see a dip back to $80. The $87-88 zone is the next level of significant resistance.

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 $7.05/7.20
-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 $12.30/12.55
-stop loss on BIDU @ 73.40

Chart of BIDU:


Bucyrus Intl. - BUCY - close: 64.37 change: +0.64

It was a big week for BUCY. The stock surged more than $6 and broke out over resistance at the 200-dma and the $60.00 level. The stock's four-day rally stalled on Friday near $65 but that happens to be a new four-month high. Originally we wanted to buy BUCY calls on a dip to $51 but we added a trigger to buy calls at $61.00 just in case the stock started to run away from us. The $61.00 trigger was hit on Wednesday. Now that the play is open our first target is $72.50. We'll use a stop loss at $52.99.

On a short-term basis BUCY looks overbought and due for a dip. I would expect a dip back toward the $61.50-60.00 zone and we can launch new positions there. FYI: I prefer the 2012 call LEAPS but the 2011s should work.

Sep 01, 2010 - entry price on BUCY @ 61.00, option @ 8.50
symbol: BUCY1122A60 2011 JAN $60 call - current bid/ask $9.95/10.10
-stop loss on BUCY @ 52.99

- or -

Sep 01, 2010 - entry price on BUCY @ 61.00, option @ 13.00
symbol: BUCY1221A70 2012 JAN $70 call - current bid/ask $13.20/13.50
-stop loss on BUCY @ 52.99

Chart of BUCY:


ConocoPhillips - COP - close: 55.05 change: +0.62

The commodity oil has not seen a very strong bounce but at least it has stopped falling after a -9% decline in August. Fortunately, the action in oil has not stopped the oil sector from climbing with the rest of the market. Recent news that another oil rig in the Gulf of Mexico (in water 300' deep) is on fire has not slowed the rally in oil stocks. Technicians could argue the OIX has produced a higher high and higher low in the last few weeks. COP has a similar pattern. The close over $54.00 in COP looks like a new bullish entry point however, on a short-term basis I would expect a dip back toward the $54-53 zone soon. I am tempted to raise the stop closer to $50 but we'll leave it at $47.99 for now.

Prior Comments:
Our first target is $69.00. FYI: The Point & Figure chart is suggesting a long-term $79 target.

May 20, 2010 - entry price on COP @ 51.00, option @ 3.75
symbol: COP 11A55.00 2011 JAN $55 call - current bid/ask $3.30/3.40
-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 $4.20/4.40
-stop loss on COP @ 47.99

09/04/10 COP gave us a new entry with the move over $54.00
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: 19.91 change: +0.34

It was a huge week for shares of EMC with the stock surging more than +8%. The stock has cleared resistance at $19.00 and its 50 and 100-dma. On the news front there is still plenty of speculation about further consolidation in the storage industry. EMC could be seen as a buyer although there are a few rumors that EMC could actually be a takeover target (unlikely with a market cap of $41 billion). It looks like HPQ has won the bidding war for 3PAR with a $33/share bid. Now traders are wonder who might DELL look at next. Will EMC get involved? There is some speculation that Brocade (BRCD) might be a target.

On a short-term basis EMC is short-term overbought and due for some profit taking. We can look for the $19.00 level to offer some support. Long-term the trend is still up but the $20.50-21.00 zone could be tough resistance to break. If you are looking at launching new positions I would use the 2012 call LEAPS if EMC provides a new entry point (like a new bounce from $19.00).

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 $1.35/1.38
-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 $2.84/2.98
-stop loss on EMC @ 17.80

09/04/10 EMC has provided a new entry point with the move over $19
07/03/10 More Conservative Traders may want to exit early!

Chart of EMC:


SPDR Gold ETF - GLD - close: 121.86 change: -0.43

With the stock market in rally mode one might have expected stronger profit taking in gold. That wasn't the case. Gold managed a gain for the week. Most of the safe-haven profit taking occurred in the bond market. Still, my short-term outlook hasn't changed, the GLD looks overbought with a six-week rebound and rally in progress. Momentum is stalling. I suspect gold is getting a boost from the dollar weakness the past week or two. Wait for the GLD to retrace and find new support before considering bullish positions. I'm watching the $118.00 or $116.00 areas as likely support. Please note our new stop loss at $112.90. More conservative traders may want to use a stop closer to $116.00 instead.

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 $8.60/8.80
-stop loss on GLD @ 112.90

- or -

Aug 6, 2010 - entry price on GLD @ 118.00, option @ 10.75
symbol: GLD1221A130 2012 Jan $130 call - current bid/ask $11.85/12.10
-stop loss on GLD @ 112.90

Weekly Chart of GLD:


Infosys Technologies - INFY - close: 60.66 change: +0.89

Earlier this past week I was beginning to worry about INFY with shares slipping to new relative lows. That changed on Wednesday with the gap higher and the stock managed to end the week above $60 and its 50-dma. INFY has produced a bullish engulfing candlestick (reversal) pattern on the weekly chart but this signal needs to see confirmation. I suggested a week ago that readers look for a close over $60 as a possible entry point. We are leaving our stop at $54.90 for now but more conservative traders may want to move their stop toward this week's low (56.73).

FYI: Investor's Business Daily ran an article this past week with the opinion that the move to cloud-computing is positive for India-based outsourcing firms like INFY.

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 $4.70/ 4.90
-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 $6.90/ 7.60
-stop loss on INFY @ 54.90

Chart of INFY:


Intuitive Surgical - ISRG - close: 281.18 change: + 3.86

We were expecting an oversold bounce in shares of ISRG. The fact that the stock didn't see a bigger rebound is good news for our put play. However, I don't think the bounce is over yet. I would look for a move back into the $290-300 zone. Preferably we'll see a failed rally near $300 where we can add to our bearish positions.

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. We did take profits early on 8/28/10 given the sharp sell-off but our long-term target is $250.00. The plan was to use small positions to limit our risk. We have a stop loss at $311.00.

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 $15.80/16.60
-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: 75.09 change: +0.07

Another week, another new 52-week high in MCD. That's the sort of trend we like to see. Although I should warn you that MCD is starting to look a little more overbought with each week. The rally from its July lows has been significant. 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.

Prior Comments:
Keep your positions small. Our long-term target is $79.75. FYI: The Point & Figure chart forecasting an $96 (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 $6.70/ 6.80
-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 $4.15/ 4.25
-stop loss on MCD @ 66.75

08/28/10 New stop @ 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: 98.79 change: +2.49

Take Profits Now! Shares of MICC have been consolidating sideways for weeks. When the market decided to move higher, MICC broke out, and shares surged to a new two-year high. The stock is short-term overextended and too close to our initial target of $99.50 to ignore. I'm suggesting we take profits now (sell at least half) and raise our stop loss to $86.40.

Previous Comments:
Keep your positions small to limit your risk. MICC is (normally) a volatile stock. Our long-term targets are $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 $12.90/14.60
-stop loss on MICC @ 86.40

09/04/10 Take Profits Early, MICC @ 98.79, option @ $12.90 (+50%)
plus new stop at $86.40

Chart of MICC:


NetApp, Inc. - NTAP - close: 44.05 change: +0.98

Take profits now in NTAP. Technology stocks delivered a strong performance last week and there is plenty of speculation about further consolidation in the sector. Shares of NTAP rallied toward their 2010 highs near $44. The stock looks short-term overbought with a three-week rally and I would expect some profit taking soon. We want to go ahead and sell part of our position now to lock in a profit, especially if you have the 2011 calls. The 2011 Jan. $40s have more than doubled.

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 $ 6.45/ 6.60
-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 $ 7.05/ 7.30
-stop loss on NTAP @ 34.75

09/04/10 Take Profits Early, NTAP @ 44.05, 2011 $40 call @ 6.45 (+115%)
The 2012 $45 call @ $7.05 (+76%)

Chart of NTAP:


Occidental Petroleum - OXY - close: 78.32 change: +0.48

Shares of OXY soared on Wednesday, mostly like due to the market's very widespread bounce and not due to speculation that OXY's CEO would resign. Wednesday the Wall Street Journal reported that Ray Irani, the 75-year old CEO for OXY, would likely announce his retirement at the next board meeting. Irani has been criticized for his excessive pay and the WSJ claims he earned $857 million in the last ten years.

We were expecting a bounce sooner or later. OXY's rebound stalled at the 61.8% Fibonacci retracement level (see chart). Given this clear level of resistance more conservative traders may want to adjust their stops lower. We'll keep our stop at $80.25 for now. More aggressive traders could move their stops above the 200-dma near $80.90. I am suggesting we wait for this bounce to roll over before launching 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 $ 1.37/ 1.43
-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 $ 5.30/ 5.55
-stop loss on OXY @ 80.25

Chart of OXY:


PEPSICO Inc. - PEP - close: 65.57 change: +0.60

The trend in PEP is starting to look bullish again. More aggressive traders may want to consider bullish positions with a stop loss under $63.00. Or as an alternative you could wait for a close over $67.50. Keep in mind our final target is $72.25 (aggressive traders could aim for $75) but if you launch new positions be sure to use 2012 calls.

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 $6.75/6.85
-stop loss on PEP at $59.85

09/04/10 may want to consider new positions with 2012 calls
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:


Panera Bread - PNRA - close: 85.02 change: -0.19

Take profits now! We have been expecting PNRA to breakout past resistance at $80 and make a run toward its April highs but we knew the $85 level would be resistance. Shares managed to rally from $80 to $86.72 in just three days. Our bullish play on PNRA was triggered August 30th when shares hit $80.87. Our trigger to buy calls was $80.75. I am suggesting we go ahead and take some money off the table now. Odds are really good we'll see some profit taking. I am expecting a dip back toward $83.00 before PNRA tries to rally again. I'm moving the stop loss up to $78.45. Our final target is $88.00.

Aug 30th, 2010 - entry price on PNRA @ 80.75, option @ $4.20
symbol: PNRA1122A85 2011 $85.00 LEAP call - current bid/ask $6.20/6.70
-stop loss on PNRA at $78.45

09/04/10 Take profits early. Sell half. PNRA @ 85.02, option @ 6.20 (+47.6%)
08/30/10 Triggered at $80.75

Chart of PNRA:


Transocean Ltd. - RIG - close: 54.33 change: +0.33

A new fire on an oil rig in the Gulf of Mexico, this time on a rig closer to shore in 300' of water, did not have much affect on shares of RIG. Overall the stock looks poised to rally from current levels. I have been suggesting readers consider new bullish positions near support at $50 and would still consider new positions today or on the next dip near the $52-50 zone. Otherwise I don't see any changes from my previous comments. 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 $ 8.60/ 8.80
-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 $ 8.45/ 8.75
-stop loss on RIG @ 41.80

Chart of RIG:


TASER Intl. - TASR - close: 3.99 change: +0.02

TASR has performed well for us. The stock opened this last week at $3.69 and managed to rally past short-term resistance at $3.80 and close near round-number resistance at $4.00 for a +8.4% gain. Broken resistance near $3.80 should now offer some support. I would wait for a dip or a bounce near $3.80 before considering new bullish positions.

This past week TASR saw some headlines. A judge in Arizona ruled in favor of TASR in a patent lawsuit against Stinger. Then on Wednesday the company announced a big order from the Texas Department of Public Safety.

Previous Comments:
Our stop loss is at $3.45. Our long-term target is $4.90.

STRATEGY: Buy TASR stock (entry $3.69), stop loss $3.45

08/30/10 TASR opens Monday at $3.69 (entry point)
08/28/10 TASR listed as a new play

Chart of TASR:


CLOSED Plays

BorgWarner Inc. - BWA - close: 48.42 change: +1.69

It's time to take profits in BWA. Our second and final target for the stock has been $49.75. Shares hit $49.04 on Friday. I'm suggesting an early exit now to lock in a gain and try to capture any option inflation from a sharp four-day rally. Honestly, I'm still bullish on BWA and more aggressive traders may want to let it run. You could argue the stock has created a bull flag pattern that is suggesting an upward target near $54.00.

09/04/10 - Exit Early @ 48.42

Feb 17th, 2010 - entry price on BWA @ 37.55, option @ 3.90
symbol: BWA1122A40 2011 JAN $40 LEAP call - current bid/ask $9.90/10.60
-stop loss on BWA @ 39.75

09/04/10 Final Exit (Early) BWA $ 48.42, option @ $9.90 (+153%)

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:


Starbucks Corp. - SBUX - close: 25.07 change: +0.41

Ouch! We have been whipsawed out of our SBUX put play. The stock was pinned under resistance near $23.70 most of the week until the Thursday. The S&P 500 rallied past resistance near 1080 on Thursday and shares of SBUX experienced some significant short covering. SBUX rallied past additional resistance at $24 and the 200-dma. On Friday the short covering continued and shares broke past the 50-dma and hit an intraday high of $25.19. Our stop loss to exit was $25.15.

- This is a PUT Play -

09/03/10 STOPPED OUT (SBUX @ $25.15)

Aug 24, 2010 - entry price on SBUX @ 23.30, option @ 1.16
symbol: SBUX1122M20 2011 Jan $20 put - exit @ 0.58 (-50%)
-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 - exit @ $2.23 (-15.8%)
-stop loss on SBUX @ 25.15

Chart of SBUX: