Closed Plays


None. No closed plays this week.


Play Updates


Akamai Technology - AKAM - close: 44.18 change: -1.75

An earnings warning from EQIX sent several tech-related stocks lower. Shares of AKAM plunged from $47.91 to $43.61 on October 6th. The next day shares dipped to $42.91 before traders stepped in to buy the dip. It was a nearly perfect bounce from technical support at the 61.8% Fibonacci retracement of AKAM's August-September rally. Our bullish call LEAPS play was triggered on Oct. 6th at $45.50. Currently we have a stop loss at $41.90.

We were expecting a correction in AKAM but not so quickly. The short-term trend is still down and Monday's session produced another bearish turnaround. The close under $45.00 and its 100-dma is bearish. I could not find any reason for Monday's relative weakness. Wait for another bounce near $43.00 before considering new bullish positions again.

I remain longer-term bullish on AKAM. Our first target is $54.75. Our second, longer-term target is $59.75. FYI: AKAM has seen some takeover chatter in the last couple of months. Investors should note that AKAM is due to report earnings on Oct. 27th. I prefer the 2012 calls.

Oct 06, 2010 - entry price on AKAM @ 45.50, option @ 2.85
symbol: AKAM1122A50 2011 JAN $50 call - current bid/ask $ 2.36/ 2.43
-stop loss on AKAM @ 41.90

- or -

Oct 06, 2010 - entry price on AKAM @ 45.50, option @ 7.50
symbol: AKAM1221A50 2012 JAN $50 call - current bid/ask $ 7.20/ 7.50
-stop loss on AKAM @ 41.90

10/06/10 Play triggered when AKAM hit $45.50

Chart of AKAM:


Baidu, Inc. (Baidu.com) - BIDU - close: 99.74 change: +1.12

Shares of BIDU have been bouncing around a $10 range after topping out near $105 in late September. On a positive note shares of BIDU have been consolidating sideways instead of a sharp pull back after the failed rally pattern two weeks ago. While I'm hopeful that BIDU can breakout higher from here the better bet would be to expect a consolidation back toward $90. I am not suggesting new positions at this time. We have already sold the 2011 calls for a profit. We currently have half of our original 2012 position left. More conservative traders may want to raise their stops toward $85 or toward $90.

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 $23.20/24.10
-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: 75.08 change: +0.77

The rally continues for mining equipment maker BUCY. Shares have broken out of the $68-72 range and BUCY is now hitting new two-year highs. The light volume is still a concern and does not offer any confidence in the move but the overall trend remains positive. I am not suggesting new bullish positions at this time. I am raising our stop loss to $63.75. FYI: Earnings are expected on Oct. 21st.

Note: We will plan to sell the rest of our 2011 calls when BUCY hits $78.50.

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.

Sep 01, 2010 - entry price on BUCY @ 61.00, option @ 8.50
symbol: BUCY1122A60 2011 JAN $60 call - current bid/ask $17.05/17.25
-stop loss on BUCY @ 63.75

- or -

Sep 01, 2010 - entry price on BUCY @ 61.00, option @ 13.00
symbol: BUCY1221A70 2012 JAN $70 call - current bid/ask $18.45/18.75
-stop loss on BUCY @ 63.75

10/11/10 New stop loss @ 63.75
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: 59.79 change: +0.18

I suggest caution here. The rally in oil might be stalling. The rally in COP also appears to have stalled near resistance at the $60.00 level. The trend is up for COP but the stock is overbought. I would expect a pull back toward the $58 and $56 levels, both of which should act as short-term support. I'm not suggesting new positions at this time. Please note our new stop loss at $51.90.

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 $5.85/5.95
-stop loss on COP @ 51.90

- or -

May 20, 2010 - entry price on COP @ 51.00, option @ 4.75
symbol: COP 11A55.00 2012 JAN $60 call - current bid/ask $6.15/6.35
-stop loss on COP @ 51.90

10/11/10 New stop loss @ 51.90
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: 20.06 change: +0.19

We are starting to see a little oversold bounce in shares of EMC. The stock saw a sharp correction but traders bought the dip near its rising 100-dma, which just happened to coincide near the 61.8% Fib retracement level. A new broker upgrade from hold to buy on Monday morning didn't hurt either. This might be a new bullish entry point but I'm still worry about an overdue correction in the major market averages. I'm also a little concerned by the strong volume on EMC's pull back. I would hesitate to launch new positions.

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 $1.24/1.27
-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 $2.75/2.93
-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: 132.29 change: +0.63

The almost nonstop rally in gold is about ten weeks old. Gold surged to new highs again last week on dollar weakness and growing expectations for the Federal Reserve to enact more quantitative easing. The GLD appeared to create a bearish engulfing reversal candlestick pattern on October 7th but there was no follow through. I still see it as a warning sign since the commodity and this ETF are so overbought and due for a correction. The 2011 March $120 calls have almost doubled from our entry point. I am very, very tempted to sell any remaining positions here. Readers may want to consider taking some profits in the 2012 calls as well. When the U.S. dollar finally sees an oversold bounce it could spark a very sharp and very painful correction in gold prices. We could easily see the GLD plunge to the $122.50-120.00 zone. I am not suggesting new bullish positions at this time.

Previous Comments
Our long-term target remains at $138.50 for now.

Aug 6, 2010 - entry price on GLD @ 118.00, option @ 7.70
symbol: GLD1119C120 2011 Mar $120 call - current bid/ask $14.90/15.20
-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 $16.35/16.70
-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: 51.29 change: +0.44

Good news! The tone of trading in shares of HUM is improving. Traders bought the dip twice near $49.00 last week and now the stock has broken out over short-term resistance near $51.00. This looks like a new bullish entry point to me and I would not hesitate to launch new positions. Of course given the market's overbought conditions you may want to slowly scale into any bullish positions on HUM. Shares of HUM garnered an upgrade in the last few days and technical indicators are turning positive again.

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 $1.60/ 1.75
-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 $5.90/ 6.40
-stop loss on HUM @ 44.90

10/11/10 New Entry point - HUM is breaking out past $51.00.

Chart of HUM:


Intl.Business Machines - IBM - close: 139.66 change: +0.81

Wow! The relative strength in IBM has been unexpected. As a very liquid, large cap stock I'm not surprised to see fund managers chasing performance given the bullish breakout. Yet the rally has been almost nonstop from the late August lows. This is not natural. IBM is now testing potential resistance near $140. I would expect a correction sooner rather than later. Broken resistance in the $135-133 zone should be pretty strong support. I am suggesting readers wait for a dip toward support before launching new positions. FYI: Investors should note that IBM is due to report earnings on Oct. 18th. We should expect some volatility following the report.

Previous Comments:
Our first long-term target is $159.00. We currently have a stop loss at $129.50.

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

Sep 30, 2010 - entry price on IBM @ 136.00, option @ 3.90
symbol: IBM1122A140 2011 Jan $140 call - current bid/ask $5.40/ 5.55
-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 $9.15/ 9.30
-stop loss on IBM @ 129.50

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

Chart of IBM:


Infosys Technologies - INFY - close: 68.80 change: -0.69

The very impressive rally in INFY has stalled. Shares have spent the last few days consolidating sideways in the $68-70 zone. I really don't expect any progress out of INFY until after its earnings report on October 15th (before the bell). Wall Street is expecting a profit of 60 cents a share. My concern is that it may not matter if the earnings news is good or bad because traders could use the announcement to sell the news and lock in gains after the rally from its August lows. I would expect a correction toward $64.00, which should be decent support.

Previous Comments:
We have already sold the 2011 calls for a profit. Our remaining position are any 2012 calls. Our long-term target is $79.00. FYI: The P&F chart is now forecasting at $97 target.

July 1, 2010 - entry price on INFY @ 59.00, option @ 8.20
symbol: INFY 12A65.00 2012 Jan $65 call - current bid/ask $11.00/12.60
-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: 70.48 change: +0.38

Be careful here with LMT. I remain concerned with the stocks relative weakness. Shares really aren't going anywhere. You could argue LMT is forming a neutral pennant shaped pattern of lower highs and higher lows. If that's true then odds favor LMT breaking down into a continuation of the prior trend. Last week I suggested waiting for a close over $71.00 before considering new positions. That hasn't happened yet. Today I would alter that plan and suggest waiting for a close over $71.50 or even a close over $72.00 before considering new bullish positions. More conservative traders may just want to step back and wait to see how the market reacts to earnings first. LMT is due to report earnings on the morning of October 19th. Analysts are expecting a profit of $1.56 a share. Given the huge sell-off in LMT over the last few months, a positive earnings surprise could really change things for the better.

Previous Comments:
Currently we have a stop loss at $67.90. Our first long-term target is $79.00.

Oct 01, 2010 - entry price on LMT @ 70.50, option @ 1.25
symbol: LMT1122A75 2011 Jan $75 call - current bid/ask $1.15/ 1.25
-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 $4.60/ 4.80
-stop loss on LMT @ 67.90

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

Chart of LMT:


McDonald's Corp. - MCD - close: 75.59 change: -0.51

You might think that the rising cost of commodities like corn, wheat, and beef would have a negative impact on shares of MCD. Thus far that has not been the case. The stock is still consolidating sideways but it's trying to breakout past resistance near $76.00 and hit new all-time highs again. While the overall trend is up it would not surprise me to see MCD churn sideways until its earnings report on October 21st. Wall Street is expecting a profit of $1.24 a share. I am not suggesting new positions at this time and more conservative traders may want to wait until after we see how investors react to the earnings data before considering positions.

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 $6.45/ 6.55
-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 $3.95/ 4.10
-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: 98.62 change: -0.11

MICC is holding up reasonably well. Traders bought the dip near $95 and its rising 50-dma a couple of times. Shares act like they want to go higher and volume has been pretty light on the consolidation. If you look hard enough you can see that MICC is bouncing from the bottom of a bullish channel. However, that could change if investors don't respond well to earnings. MICC is due to report on October 19th or the 20th, probably before the opening bell. The street is looking for a profit of $1.50 a share. I'm not suggesting new bullish positions at this time. More conservative traders may want to exit completely, especially ahead of earnings.

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 $11.70/12.60
-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:


NVIDIA Corp. - NVDA - close: 10.81 change: -0.05

Bingo! We were expecting a pull back toward $10.50 and that's exactly what NVDA provided. Traders bought the dip twice near $10.50 and its rising 40-dma. On a short-term basis the stock is struggling with some resistance near $11.00 but the stock looks poised to continuing bouncing. The recent strength in the SOX semiconductor index should help. However, we need to be aware that earnings results from Intel (INTC) and AMD this week could have an impact on shares of NVDA. INTC reports tomorrow.

Personally I would be tempted to launch new positions in NVDA right here but with the major market indices still so overbought there is a chance NVDA could test its 50-dma (near $10.25) or even the $10.00 level before moving higher again. If you're patient we might see a better entry point.

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 $1.62/ 1.73
-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: 65.52 change: -0.23

Uh-oh! Last week PEP broke out past significant resistance in the $67.00-67.50 zone and the stock closed at new 52-week highs on Oct. 6th. Unfortunately investors were unhappy with the company's earnings report. PEP reported earnings of $1.22 a share with revenues rising +40% to $15.51 billion for the quarter. The net profit was inline with estimates but revenues beat analysts' estimates of $15.38 billion. While last quarter looked okay PEP's management lowered their 2010 forecasts and the stock reacted negatively. Shares gapped down on Oct. 8th and has continued to see some selling pressure. More conservative traders may want to raise their stop losses further. I am not suggesting new bullish 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 $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: 61.91 change: -1.07

Oil stocks have continued to move higher thanks to strength in crude oil. Yet the rally in the oil service stocks has stalled a bit. The OSX oil services index has struggled with resistance near the 200 level. Meanwhile RIG has been digesting its gains with a multi-day consolidation lower. Broken resistance near $60.00 should offer new support and RIG should also find some support at the 50-dma. If you're looking for a new bullish entry point consider waiting for a bounce from the 50-dma. Please note I'm adjusting our target to sell the remainder of our 2011 calls from $68.00 to $67.00.

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 $67.00. 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 $12.95/13.10
-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 $11.55/11.80
-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: 14.61 change: -0.04

Better than expected Q3 earnings from Alcoa (AA) offers a positive backdrop for STLD to report against. STLD is due to report on October 18th after the closing bell. Wall Street expects a profit of 9 cents per share. I would expect STLD to bounce around the $14-15 zone until the company reports so there is no need to rush into positions. More conservative traders may want to wait and see how traders react to STLD's earnings news before considering bullish positions.

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 $ 1.15/ 1.25
-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 $ 2.40/ 2.60
-stop loss on STLD @ 12.90

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

Chart of STLD:


TASER Intl. - TASR - close: 4.01 change: -0.05

Hmm.... there is a mystery here with TASR. I cannot explain what happened on October 4th and 5th. Shares suddenly collapsed on the 4th, plunging to new four-week lows on no news. Then the very next day TASR rallies back to erase the -6.9% loss. Furthermore the bounce continued and TASR broke out past resistance near $4.00 to hit new six-week highs. The stock is now seeing some profit taking and throughout the entire episode volume was pretty light.

If you're feeling optimistic then we can look at what happened last week and see a new test of support near $3.60 (see chart). I am more optimistic now seeing how support held up. Yet I hesitate to launch new positions with the major market indices still so overbought and due for a correction.

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: