Closed Plays


None. No closed plays this week.


Play Updates


Baidu, Inc. (Baidu.com) - BIDU - close: 98.80 change: -3.82

Warning! BIDU managed to post a gain but the action was all bearish this week. The stock tagged a new all-time high on the 28th at $107.19 but immediately reversed. BIDU spent the rest of the week bouncing around the $100-105 zone. On the weekly chart you can see a blow-off top, failed rally pattern. This is bearish! We knew BIDU was getting overbought, which was why we sold the 2011 calls last week. My only concern with the 2012 calls is that BIDU can be so volatile it would be painful to see us get stopped out at $79.00. On a more positive note we can look for support near $90, $87, and at $80.

We want to sell HALF of our 2012 calls at this time. I am not suggesting new positions at this time. Be prepared for a significant pull back but the longer-term trend is still higher.

Previous Comments:
BIDU is a very volatile stock. This is an aggressive, higher-risk trade. Keep your position size small to limit your risk. We have already taken profits on the 2011 calls. Our target for the 2012 calls is $119. Our stop is at $79.00.

Only one position left.

Aug 02, 2010 - entry price on BIDU @ 83.50, option @ 13.00
symbol: BIDU1221A100 2012 JAN $100 call - current bid/ask $22.30/22.55
-stop loss on BIDU @ 79.00

10/02/10 Sell half of 2012 calls, BIDU @ 98.80, option @ 22.30 (+71.5%)
09/25/10 Take Profits on the 2011 calls, BIDU @ 97.83, option @ 14.75 (+84.3%)
09/25/10 New stop @ 79.00

Chart of BIDU:


Bucyrus Intl. - BUCY - close: 69.89 change: +0.54

Shares of BUCY did not make much progress. The stock is still struggling under resistance near $72.50. As I said last week this stock is poised for a correction. Look for a dip toward the $65 region. Look for the bounce before considering new positions.

Previous Comments:
We have taken profits once already near $70. Our second, longer-term target is $87.50 although we'll probably sell the rest of our 2011 calls before BUCY gets that high. Currently our stop loss is at $57.40.

Sep 01, 2010 - entry price on BUCY @ 61.00, option @ 8.50
symbol: BUCY1122A60 2011 JAN $60 call - current bid/ask $13.00/13.25
-stop loss on BUCY @ 57.40

- or -

Sep 01, 2010 - entry price on BUCY @ 61.00, option @ 13.00
symbol: BUCY1221A70 2012 JAN $70 call - current bid/ask $15.30/15.65
-stop loss on BUCY @ 57.40

09/18/10 Take Profits. We want to sell half of our 2011 Jan $60 calls.
BUCY is at $70.37. The calls are bid $13.85 (+62.9%) 09/18/10 New stop loss at $57.40

Chart of BUCY:


ConocoPhillips - COP - close: 57.86 change: +0.43

A bullish breakout in oil prices, thanks to a weaker dollar, has buoyed the oil sector. Unfortunately, shares of COP seem to be lagging behind its peers. The trend is up but COP just isn't making a lot of progress. Right now COP is stuck near resistance at $58.00. I would prefer to wait for a dip or a bounce near $55.00 before considering new bullish positions.

Prior Comments:
Our first target is $69.00. FYI: The Point & Figure chart is suggesting a long-term $79 target. We are using a stop loss at $47.99.

May 20, 2010 - entry price on COP @ 51.00, option @ 3.75
symbol: COP 11A55.00 2011 JAN $55 call - current bid/ask $4.55/4.60
-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 $5.20/5.30
-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: 20.34 change: +0.03

Uh-oh! We need to be careful with EMC. The stock has created a bearish reversal. After surging to new multi-year highs a week ago the stock posted four days of declines and managed a little oversold bounce on Oct. 1st. I would expect a correction toward the $19.50 area. More conservative traders may want to consider raising their stop loss. I am not suggesting new positions at this time. In spite of the reversal the longer-term trend remains higher.

Previous Comments:
Our first target is $22.50 (sell at least half). 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 $1.48/1.52
-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 $2.81/3.05
-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: 128.91 change: +1.00

Growing expectations that the Federal Reserve will embark on another round of massive quantitative easing has been bullish for gold. The U.S. dollar is plunging on the idea of new QE and that boosting demand for gold and metals. Gold futures hit new all-time highs over $1,300 an ounce this past week. The GLD is following the futures higher. This commodity is extremely short-term overbought and due for a correction.

I am suggesting we go ahead and sell at least half of our 2011 March $120 calls. The dollar is very oversold and I think it could bounce as it nears the January 2010 low. We'll sell half of the March calls. We'll raise our stop loss to $118.49. FYI: The Point & Figure chart is forecasting a $158 target.

Previous Comments
Our long-term target is $138.50.

Aug 6, 2010 - entry price on GLD @ 118.00, option @ 7.70
symbol: GLD1119C120 2011 Mar $120 call - current bid/ask $12.70/13.05
-stop loss on GLD @ 118.49

- or -

Aug 6, 2010 - entry price on GLD @ 118.00, option @ 10.75
symbol: GLD1221A130 2012 Jan $130 call - current bid/ask $14.35/14.80
-stop loss on GLD @ 118.46

10/02/10 Sell half of the 2011 March calls, option @ 12.70 (+64.9%)
10/02/10 New stop $ 118.49
09/25/10 New stop @ 116.45, new target 138.50

Weekly Chart of GLD:


Humana Inc. - HUM - close: 50.13 change: -0.11

The stock market has been consolidating sideways the last several days so I'm not surprised to see HUM do the same near support at the $50.00 level. Yet if you compare it to the HMO index then shares of HUM have been lagging behind its peers. The HMO index has been climbing for weeks and is now testing major resistance in the 1600 region. A breakout here would be very bullish for the sector but odds favor a pull back first. The question is, if the HMO pulls back, will HUM follow it lower and if so how far?

If HUM's support near $50 breaks down I would look for additional support near $48 and its rising 200-dma. A bounce from $48 could be our next bullish entry point.

Previous Comments:
Our long-term target is $59.50. We're using a stop loss at $44.90. I'm listing the 2011 January calls but I prefer the 2012 Jan. calls. FYI: The point-and-figure chart is forecasting a long-term target of $66.00.

Sep 17, 2010 - entry price on HUM @ 50.50, option @ 1.85
symbol: HUM1122A55 2011 Jan $55 call - current bid/ask $1.45/ 1.60
-stop loss on HUM @ 44.90

- or -

Sep 17, 2010 - entry price on HUM @ 50.50, option @ 6.40
symbol: HUM1221A55 2012 Jan $55 call - current bid/ask $5.70/ 6.10
-stop loss on HUM @ 44.90

Chart of HUM:


Intl.Business Machines - IBM - close: 135.64 change: +1.50

IBM's nearly non-stop rally during the month of September pushed the stock to new multi-year highs. Shares had been stuck under resistance in the $133 zone for nine months. The breakout is very bullish. Yet on a short-term basis IBM looks like it is losing steam. Our bullish call play was triggered when IBM hit $136.00 but I suspect we will see a better entry point near $133-132 soon. Readers may want to wait for a pull back before initiating new positions. We're starting with a stop loss at $129.50 and a long-term target at $159.00. FYI: earnings are due out on Oct. 18th.

I Prefer the 2012 calls but readers may want to use the 2011s to capture a short-term move. I'm listing both.

Sep 30, 2010 - entry price on IBM @ 136.00, option @ 3.90
symbol: IBM1122A140 2011 Jan $140 call - current bid/ask $3.70/ 3.80
-stop loss on IBM @ 129.50

- or -

Sep 30, 2010 - entry price on IBM @ 136.00, option @ 7.80
symbol: IBM1221A150 2012 Jan $150 call - current bid/ask $7.65/ 7.80
-stop loss on IBM @ 129.50

09/30/10 Play triggered $136.00, stop $129.50

Chart of IBM:


Infosys Technologies - INFY - close: 70.52 change: +3.21

Wow! After slowly drifting higher most of the week shares of INFY exploded higher on Friday with a +4.7% gain. The Indian market rose +1.8% on Friday. I couldn't find any specific news behind the sharp rally on Friday. Shares of INFY are up almost +23% in the last month. I am suggesting we go ahead and sell the 2011 Jan. $60 calls now. INFY is very overbought here and while I remain bullish a correction is going to see these 2011 options implode.

Sell the 2011 calls now. We'll keep the 2012 calls open. Keep in mind that INFY is due to report earnings on Oct. 15th, before the bell. If INFY disappoints in any way the stock should see a sharp sell off given its recent gains. I am not suggesting new positions at this time. FYI: The P&F chart is now forecasting at $97 target. Please note that I'm raising the stop loss to $61.75.

Previous Comments:
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 - Sell Now: bid @ $11.20
-stop loss on INFY @ xx.xx

- or -

July 1, 2010 - entry price on INFY @ 59.00, option @ 8.20
symbol: INFY 12A65.00 2012 Jan $65 call - current bid/ask $11.50/14.20
-stop loss on INFY @ 61.75

10/02/10 Sell the 2011 Calls, INFY @ 70.52, option @ 11.20 (+49.3%)
10/02/10 New stop @ 61.75
09/25/10 New stop @ 58.75

Chart of INFY:


Lockheed Martin - LMT - close: 69.61 change: -1.67

I've got good news and bad news on LMT. The good news is that we've been expecting a pull back toward $70.00 and we got it this week so our play was opened at $70.50. The bad news is that we were expecting LMT to pull back along with the market, not by itself. I suspect the high-volume sell-off (which is normally a bad sign) that occurred on Friday, Oct. 1st, was due to news that flight testing for the F-35 fighter jet, made by LMT, was suspended until they finish adjusting the fuel system software.

While our play on LMT is open I am not suggesting new positions at this time! We want to see a bounce now given the unusual weakness. Look for a bounce or a close over $71.00 before considering new bullish positions. Currently we have a stop loss at $67.90. Our first long-term target is $79.00.
FYI: LMT is due to report earnings on Oct. 19th (date unconfirmed).

Oct 01, 2010 - entry price on LMT @ 70.50, option @ 1.25
symbol: LMT1122A75 2011 Jan $75 call - current bid/ask $1.10/ 1.20
-stop loss on LMT @ 67.90

- or -

Oct 01, 2010 - entry price on LMT @ 70.50, option @ 5.10
symbol: LMT1221A75 2012 Jan $75 call - current bid/ask $4.40/ 4.60
-stop loss on LMT @ 67.90

10/01/10 Play triggered $70.50, stop $67.90

Chart of LMT:


McDonald's Corp. - MCD - close: 74.92 change: +0.41

There is nothing new to report on MCD. The stock has spent most of the last month bouncing around the $73.50-76.00 zone. Granted these are all-time highs and shares were looking overbought. If the market sees a correction I would look for MCD to retest the $72 area. Wait for a dip near $72 before considering new bullish positions. Please note that I'm raising the stop loss to $67.90.

Prior Comments:
Keep your positions small. Our long-term target is $79.75. FYI: The Point & Figure chart forecasting an $99 (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 $6.05/ 6.15
-stop loss on MCD @ 67.90

- 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/ 3.95
-stop loss on MCD @ 67.90

10/02/10 New stop @ 67.90
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: 96.10 change: +0.15

We've been expecting MICC to pull back toward $95.00 and that's what happened last week. Traders bought the dip near support at $95 and its rising 50-dma, twice, on Thursday and Friday. The question is, "will this short-term support hold?" I suspect that if the major market indices see a pull back then we'll see MICC pull back even further. That's why I am reluctant to consider new positions here. More conservative traders may want to exit completely.

Previous Comments:
Keep your positions small to limit your risk. MICC is (normally) a volatile stock. We have already taken some money off the table as MICC neared $99. Our second, long-term target is the $109.00 levels. Our stop loss is at $86.40.

May 6, 2010 - entry price on MICC @ 80.00, option @ 8.60
symbol: MICC 11A90.00 2011 Jan $90 call - current bid/ask $10.20/11.30
-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:


NVIDIA Corp. - NVDA - close: 11.35 change: -0.33

It should be no surprise that NVDA spent the week consolidating lower. The stock's rally had gotten a little overheated on rumors that Oracle (ORCL) was interested in buying a chip company. I am not convinced the pull back is over yet. Look for a dip toward $10.50 and/or its now rising 50-dma.

Previous Comments:
We took profits on the 2011 calls in late September. All we have left are the 2012 calls. Overall this remains an aggressive, higher-risk trade. NVDA has been struggling and sales growth has been slowing down but we are betting the worse has already been priced in for this stock. Keep your positions very small to limit our risk. Our first target is $12.50. Our second, longer-term target is $14.00.

Sep 13, 2010 - entry price on NVDA @ 10.75, option @ 1.69
symbol: NVDA1221A12.5 2012 Jan $12.50 call - current bid/ask $1.99/ 2.11
-stop loss on NVDA @ 9.95

09/25/10 Sell the 2011 calls, NVDA @ 12.26, option @ 2.70 (+70.8%)
09/25/10 new stop 9.95
09/13/10 Play Triggered @ $10.75

Chart of NVDA:


PEPSICO Inc. - PEP - close: 67.00 change: +0.56

I am a little bit surprised by the relative strength we're seeing in PEP right now. Previously it looked like shares were poised to correct lower. Of course on one hand PEP is a very liquid large cap name that mutual funds can hide in. This coming week could be crucial for PEP. The company is due to report earnings on Thursday, October 7th, before the opening bell. Wall Street expects a profit of $1.22 a share. If the company delivers we could see PEP breakout past significant resistance in the $67-68 zone.

Please note that we're moving the stop loss to $62.90. I'm not suggesting new positions at this time. FYI: FYI: The Point & Figure chart is bullish with a $79 target.

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 $7.55/7.65
-stop loss on PEP at $62.90

10/02/10 New stop @ 62.90
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:


Transocean Ltd. - RIG - close: 64.35 change: +0.06

So much for a dip! RIG surged +10% during the week and hit $65.98 on Thursday before succumbing to a little profit taking. The dollar weakness is driving oil higher and the oil service stocks are enjoying the boost from oil. Now broken resistance near $60.00 should be new support for RIG. I am adjusting our stop loss to $53.90. RIG should have additional support near $55 and its 50-dma. I am not suggesting new positions at this time. Wait for a pull back near support. FYI: I am setting a $68.00 target to sell the remainder of our 2011 calls.

Previous Comments:
We have already taken profits once at $59.00. Our secondary, longer-term target is $75.00. We want to sell the 2011 calls at $68.00. This is a very aggressive trade given the unknown risks associated with RIG's connection to the Gulf oil spill.

Jun 09, 2010 - entry price on RIG @ 43.50, option @ 6.50
symbol: RIG 11A50.00 2011 Jan $50 call - current bid/ask $15.45/16.00
-stop loss on RIG @ 53.90

- or -

Jun 09, 2010 - entry price on RIG @ 43.50, option @ 7.25
symbol: RIG 12A60.00 2012 Jan $60 call - current bid/ask $13.25/14.05
-stop loss on RIG @ 53.90

10/02/10 New stop @ 53.90
09/10/10 Target Hit @ 59.00 (take some money off the table), 2011 Jan $50 call @ $11.45 (+76.1%), the 2012 Jan $60 call @ $10.35 (+42.7%)

Chart of RIG:


Steel Dynamics - STLD - close: 14.64 change: +0.53

So far so good. STLD managed to hold support near $14.00 all week with a minor dip to $13.93. The bounce on Friday put it back above its 50-dma. I would be tempted to launch new positions here or you could wait for a new close over $15.00. Something to keep in mind is the wider market is still overbought. If the S&P 500 corrects it could drag STLD with it. Therefore readers may want to slow scale into positions. FYI: STLD is due to report earnings on Oct. 18th.

Previous comments:
STLD will probably see some resistance near $16.00 and then in the $18.50 region. Our first long-term target is $19.00. We currently have a stop loss at $12.90.

Sep 23, 2010 - entry price on STLD @ 14.25, option @ 1.29
symbol: STLD1119B15 2011 Feb $15 call - current bid/ask $ 1.20/ 1.30
-stop loss on STLD @ 12.90

- or -

Sep 23, 2010 - entry price on STLD @ 14.25, option @ 2.50
symbol: STLD1221A15 2012 Jan $15 call - current bid/ask $ 2.45/ 2.70
-stop loss on STLD @ 12.90

09/24/10 Play Triggered, STLD @ $14.25

Chart of STLD:


TASER Intl. - TASR - close: 3.88 change: +0.00

The only headlines for TASR last week were negative. The company is being sued by inventor James McNulty for patent infringement over TASR's wireless shells (imagine a small Taser weapon the size of a shotgun shell). The news came out on Monday and failed to have much impact on TASR's stock price. Shares have been consolidating sideways in the $3.80-4.00 zone for four weeks now. Readers may want to wait for a close over September's high of $4.06 before considering new bullish positions. Currently I'm not suggesting new positions.

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: