Closed Plays


MICC and PEP have been closed.


Play Updates


Akamai Technology - AKAM - close: 47.61 change: +1.00

Gains for the stock market last week were pretty meager but they were still gains. AKAM eked out a 50-cent gain. The stock is still trading under resistance near $48 and its 50-dma but investors are still buying the dips too. The technical indicators on AKAM's daily chart are improving again. Shares look ready to breakout higher. However, AKAM is due to report earnings on Thursday, October 28th after the closing bell. It's possible that AKAM continues to hover sideways in the $45-48 zone until after its earnings report. Wall Street is expecting a profit of 34 cents a share.

A week ago I said look for a bounce from $45 as our next entry point and AKAM provided one for us. More conservative traders might want to inch up; their stops toward $43.75-44.00. I'm leaving our stop at $41.90 for now. I do remain bullish on AKAM but we have to consider the possibility that this stock could be creating a bear-flag pattern.

Previous Comments:
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.

Oct 06, 2010 - entry price on AKAM @ 45.50, option @ 2.85
symbol: AKAM1122A50 2011 JAN $50 call - current bid/ask $ 3.25/ 3.35
-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 $ 8.60/ 8.95
-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: 107.28 change: +4.80

BIDU delivered a strong earnings report on October 21st. The company reported earnings of 45 cents a share, which was three cents better than expected. Revenues soared +76% to $337.2 million, also beating estimates. Management raised their guidance for the fourth quarter. BIDU saw some wild swings after hours on Thursday night with a range of $107 to $97 but shares gapped open at $105.36 on Friday and tagged a new all-time intraday high of $109.34 Friday morning. This is a bullish breakout from a three-week consolidation. Don't be surprised to see BIDU fill the gap with a dip to $103.00 before moving higher again. Nimble traders could use this dip as a potential entry point but you'll want to use a very tight stop (maybe $99.00). Speaking of stops, I'm moving our stop loss to $94.00.

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.

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 $27.45/28.10
-stop loss on BIDU @ 94.00

10/23/10 New stop loss @ 94.00
10/21/10 BIDU reports strong earnings.
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: 68.44 change: -5.07

Ouch! BUCY reported earnings on Thursday night of 94 cents a share. That missed estimates by 17 cents! Revenues also missed consensus estimates at $937.2 million. Evidently the big miss was due to delays getting loan guarantees on a big coal-fired project in India. According to management these necessary guarantees have been secured and the project is on schedule for next year. The stock plunged on Friday giving up -6.8% but traders started buying the dip near prior support near $68.00. I'm not convinced the profit taking is over and BUCY may test the $64.50-65.00 level soon. If you're looking for an entry point I would wait for a dip or a bounce near $65.00.

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

Sep 01, 2010 - entry price on BUCY @ 61.00, option @ 8.50
symbol: BUCY1122A60 2011 JAN $60 call - current bid/ask $10.70/10.90
-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 $13.05/13.50
-stop loss on BUCY @ 63.75

10/21/10 BUCY misses earnings.
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: 61.67 change: +0.55

COP has continued to rally, setting new two-year highs this past week. I strongly suspect that COP could see some profit taking once the company reports earnings on October 27th (before the opening bell). The street is looking for a profit of $1.45 a share. If COP does pull back we can look for support near the $58 and $56 levels. I am raising our stop loss to $54.85.

Please note that we are going to exit (sell) the 2011 Jan. $55 calls now. More aggressive traders may want to try and hang on to these through the end of December. I'd rather book profits now and hang on to the 2012 calls. Our long-term target for the 2012 calls is still $69.00.

May 20, 2010 - entry price on COP @ 51.00, option @ 3.75
symbol: COP 11A55.00 2011 JAN $55 call - exit now, bid @ 7.05 (+88%)

- or -

May 20, 2010 - entry price on COP @ 51.00, option @ 4.75
symbol: COP 11A55.00 2012 JAN $60 call - current bid/ask $6.85/7.00
-stop loss on COP @ 54.85

10/23/10 Exit the 2011 Jan. $55 calls @ 7.05 (+88%)
10/23/10 New stop loss @ 54.85
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:


Diamond Offshore - DO - $69.51 change: +0.88

A spike in the U.S. dollar on Tuesday sent commodities reeling and the oil service stocks reacted to the drop in crude oil. There wasn't much follow through on the dip but DO continued to see volatility. On October 21st the company reported earnings of $1.43 a share, which was 9 cents better than expected. Revenues also beat estimates. Volatility surrounding the report pushed shares of DO to $67.29 intraday. Our trigger to buy calls was hit at $67.50.

DO was a watch list candidate. While this new trade is now open I suspect that shares may consolidation lower toward the $65.00 level. Patient investors may want to wait for a dip closer to $65 before launching positions.

We have a stop loss at $62.40. Our first long-term target is $79.00. Our second, longer-term target is $89.00.

FYI: Investors should note that DO announced a normal, quarterly dividend of 12.5 cents per share plus they announced a special one-time cash dividend of 75 cents per share. These dividends are payable to shareholders (not LEAP holders) on December 1st; the shareholder record date is November 1st.

Oct 21, 2010 - entry price on DO @ 67.50, option @ 1.90
symbol: DO1119C80 2011 Mar $80 call - current bid/ask $2.00/2.07
-stop loss on DO @ 62.40

- or -

Oct 21, 2010 - entry price on DO @ 67.50, option @ 4.79
symbol: DO1221A86 2012 Jan $86 call - current bid/ask $4.55/5.05
-stop loss on DO @ 62.40

10/21/10 Play triggered on a dip at $67.50

Chart of DO:


EMC Corp. - EMC - close: 21.44 change: +0.08

It was an important week for EMC. The company reported earnings on Oct. 19th and announced Q3 earnings that were inline with estimates (30 cents). Revenues came in at $4.21 billion, which beat estimates. More importantly management has raised its fiscal year 2010 guidance. The company claims they have gained market share and increased profitability.

The stock is still struggling with some resistance near $21.60 and thus far EMC is still creating a lower high in the shadow of the late September peak. The long-term trend is up but I hesitate to launch new positions at this time. We only have a couple of months left on the 2011 calls so I am suggesting we go ahead and sell at least half of our 2011 call position.

If you're looking for a new entry point consider waiting for another bounce from the $20.00 level. I am raising our stop loss to $18.45.

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 $2.06/2.11
-stop loss on EMC @ 18.45

- or -

May 6, 2010 - entry price on EMC @ 18.25, option @ 2.50
symbol: EMC 12A20.00 2012 Jan $20 call - current bid/ask $3.60/3.70
-stop loss on EMC @ 18.45

10/23/10 Sell Half of the 2011 calls, bid @ 2.06 (+47%)
10/23/10 New stop loss @ 18.40
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: 129.73 change: +0.26

We knew it was going to happen sooner or later. The GLD's three-month, nearly non-stop rally, finally stopped. Maybe it's just a correction. Last Tuesday the stock market reacted sharply to news that China has unexpectedly raised its interest rates. The dollar surged and commodities plunged. For the most part it was a one-day move but gold stumbled again on Thursday. Bigger picture, this pull back was way over due and probably isn't over yet. We can probably expect gold to consolidate flat or continue lower until we hear the FOMC's plans for the new quantitative easing program. If the Fed says they're going to spend $1 Trillion or more then the dollar should remain weak, fueling more interest in gold.

On a short-term basis I would expect the GLD to slip toward the $127.50-122.50 zone. I am not suggesting new positions at this time. We still want to sell (exit) the rest of our 2011 March calls if the GLD hits $138.00. More conservative traders may want to go ahead and take profits now!

Aug 6, 2010 - entry price on GLD @ 118.00, option @ 7.70
symbol: GLD1119C120 2011 Mar $120 call - current bid/ask $11.35/11.55
-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 $14.50/14.85
-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: 56.97 change: +0.70

Shares of HUM continue to surge and the stock has broken out from its bullish channel to hit new multi-year highs. Don't expect this stock to keep up the pace. Short-term, the trend is obviously higher, but I am suggesting we go ahead and take profits on our 2011 January $55 calls. More aggressive traders may want to hold on to these options and sell them just before October 31st. HUM is due to report earnings on November 1st. Wall Street is looking for a profit of $1.66 a share. I would expect some profit taking on the earnings report.

Exit the 2011 calls now. We'll look for a new entry point on any post-earnings pull back. Please note our new stop at $48.75.

Previous Comments:
Our second, longer-term target is $69.00. (I prefer the 2012 calls over the 2011s if we see another entry point down the road.)

Sep 17, 2010 - entry price on HUM @ 50.50, option @ 1.85
symbol: HUM1122A55 2011 Jan $55 call - exit (sell) now, bid @ 4.40 (+137%)

- or -

Sep 17, 2010 - entry price on HUM @ 50.50, option @ 6.40
symbol: HUM1221A55 2012 Jan $55 call - current bid/ask $8.80/ 9.70
-stop loss on HUM @ 48.75

10/23/10 Exit (sell) the 2011 Jan. $55 calls, bid @ 4.40 (+137%)
10/23/10 New stop loss $ 48.75
10/16/10 New stop loss @ 47.40
10/11/10 New Entry point - HUM is breaking out past $51.00.

Chart of HUM:


Intl.Business Machines - IBM - close: 139.67 change: -0.16

The nearly non-stop rally in IBM finally stopped, or at least paused. Just as we expected IBM saw some profit taking on its earnings report. The company beat estimates by seven cents with a profit of $2.82 a share. Revenues exceeded expectations and management issued bullish guidance. Overall it was a strong report and shares of IBM saw a "sell the news" move.

I remain long-term bullish on IBM but would much rather launch new positions on a pull back near the $133-132 zone. Our long-term target is $159.00. Our stop is at $129.50.

Sep 30, 2010 - entry price on IBM @ 136.00, option @ 3.90
symbol: IBM1122A140 2011 Jan $140 call - current bid/ask $4.50/ 4.60
-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 $8.35/ 8.55
-stop loss on IBM @ 129.50

10/18/10 IBM reported earnings
10/16/10 Short-term target for 2011 calls set at $144.00.
09/30/10 Play triggered $136.00, stop $129.50

Chart of IBM:


Infosys Technologies - INFY - close: 68.61 change: -2.40

As we expected, INFY continued to show some volatility. The stock gapped down on Tuesday and broke short-term support near $68.00. I was expecting a dip toward the $65-64 zone. I'm still expecting a deeper correction and would probably target the $64-62 zone at this time (over the next few weeks). Wait for the bounce before launching positions near $64-62.

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.

July 1, 2010 - entry price on INFY @ 59.00, option @ 8.20
symbol: INFY 12A65.00 2012 Jan $65 call - current bid/ask $10.50/12.50
-stop loss on INFY @ 61.75

10/15/10 INFY reports earnings.
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:


McDonald's Corp. - MCD - close: 78.55 change: +0.11

MCD beat earnings last week. Analysts were expect $1.24 a share and MCD delivered $1.28. Revenues also surpassed estimates. MCD surged to a new high of $79.48 intraday on Thursday. Shares look a little short-term overbought and Thursday's session looks like a top. I would expect a pull back toward support near $76.00. If $76 doesn't hold then look for support near $72.00. Please note I am raising our stop loss to $69.75. No new positions at this time.

Previous Comments:
We have already sold the 2011 calls for a gain. Our long-term target for the 2012 calls is $89.00. FYI: The P&F chart is now suggesting a $108 target.

June 29, 2010 - entry price on MCD @ 66.50, option @ 2.20
symbol: MCD 12A80.00 2012 Jan $80 call - current bid/ask $5.10/ 5.25
-stop loss on MCD @ 67.90

10/23/10 New stop @ 69.75
10/16/10 Sell the remaining 2011 calls, bid @ $8.00 (+201%)
10/16/10 New target for 2012 positions @ $89.00
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:


Microsoft Corp. - MSFT - close: 25.38 change: -0.04 stop: 23.25

We could be facing a boring week for MSFT. It wouldn't surprise me to see the stock churn sideways in a narrow range until Thursday. MSFT reports earnings on Thursday night after the closing bell. Analysts expect a profit of 55 cents a share. Thus Friday could be exciting as the market reacts to MSFT's earnings data. If you're more aggressive then you may want to launch positions ahead of earnings. If you're more conservative then I suggest waiting until after the earnings report. Essentially we have plenty of time and can enter positions anywhere in the $24.00-26.00 zone. You may want to wait for a close over $26.00 to initiate positions.

Previous Comments:
The $28.00 level could be significant resistance as would the 2010 highs near $31.50. Long-term my upside target is $31.00. Our time frame is nine to twelve months. Stop loss at $23.25.

Oct 18, 2010 - entry price on MSFT @ 25.59, option @ 3.30
symbol: MSFT1221A25 2012 Jan $25 call - current bid/ask $2.98/ 3.05
-stop loss on MSFT @ 23.25

- or -

Oct 18, 2010 - entry price on MSFT @ 25.59, option @ 2.30
symbol: MSFT1319A30 2013 Jan $30 call - current bid/ask $2.16/ 2.27
-stop loss on MSFT @ 23.25

Chart of MSFT:


NVIDIA Corp. - NVDA - close: 11.80 change: +0.71

After several days of drifting sideways in a narrow range shares of NVDA finally showed some strength with a +6.4% move on Friday. There was renewed speculation that NVDA could be a takeover candidate. I'm not going to complain. However, I want to warn readers that this week we're going to hear earnings data from a number of semiconductor companies, which could have an impact on shares of NVDA.

If the unexpected occurs and NVDA is subject to a real takeover bid and shares gap open higher one day, we will want to exit all of our positions immediately.

I would prefer to launch new positions on a bounce from the rising 50-dma. With all the earnings news and potential volatility ahead of us this week we might see a new entry point soon.

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 $1.76/ 2.02
-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:


Transocean Ltd. - RIG - close: 65.24 change: +0.17

The rally in RIG has paused but that's been normal for the stock these past several weeks. RIG tends to surge higher and then consolidate sideways for several days. This time RIG is consolidating under technical resistance at its 200-dma. The stock should find support in the $62-60 zone, bolstered by the 50-dma, if the market does see a pull back. I am not suggesting new positions at this time. RIG is due to report earnings in early November. Please note our new stop loss at $54.85.

Previous Comments:
We have taken profits twice, once at $59.00, and then we exited the 2011 calls at $67.00. We still have the 2012 calls and we're aiming for $75.00 although I'm thinking about adjusting that exit toward $79.00 instead. Both the $75.00 and $80.00 levels should be overhead resistance. This is an 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 @ 7.25
symbol: RIG 12A60.00 2012 Jan $60 call - current bid/ask $13.70/13.95
-stop loss on RIG @ 54.85

10/23/10 New stop @ 54.85
10/13/10 Target hit at $67.00 to exit the 2011 call option @ 17.40 (+167.6%)
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: 14.32 change: -0.03

Earnings for STLD were out on Oct. 18th. The company missed Wall Street's 10-cent estimate by one cent. Revenues were stronger and came in better than expected. Reaction to the news was muted. Shares of STLD continue to drift sideways in a narrow range. I am tempted to exit early right here! However, we'll keep the play alive for another week, maybe two but I would keep your finger close to the exit trigger. More conservative traders may want to raise their stops toward $13.80 instead. I am not suggesting new positions at this time. Let's wait for a close over $15.50 and its 200-dma.

Previous comments:
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 $ 0.90/ 0.95
-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 $ 2.05/ 2.20
-stop loss on STLD @ 12.90

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

Chart of STLD:


TASER Intl. - TASR - close: 4.53 change: -0.01

TASR has continued to rally and the stock is up +25% from its October low. Earnings are this week and I suspect odds are very high TASR could see some profit taking on the news. I am suggesting we sell at least half of our position right now! On a pull back TASR could plunge to support near $4.00 in a heartbeat. Look for earnings on Oct. 27th before the opening bell. Analysts are expecting a loss of one cent per share. I am raising our stop loss to $3.75.

Previous Comments:
Our long-term target is $4.90.

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

10/23/10 Sell at least Half of our position: TASR @ 4.53 (+22.7%)
10/23/10 New Stop @ 3.75
08/30/10 TASR opens Monday at $3.69 (entry point)
08/28/10 TASR listed as a new play

Chart of TASR:


WellPoint Inc. - WLP - close: 57.54 change: +0.91

Healthcare stocks tumbled on Tuesday with the rest of the market but they were quick to recover. WLP is clinging to gains above its 200-dma. Last week I suggested looking for a dip toward $56.00 as a new entry point and sure enough WLP provided one for us. The stock is still offering a potential entry point at current levels. Keep in mind that earnings are due on November 3rd and WLP could see additional volatility following the report.

Our stop loss is at $52.75. Our long-term target is $69.75. FYI: WLP is due to report earnings on Nov. 3rd.

Oct 14th, 2010 - entry price on WLP @ 57.75, option @ $5.25
symbol: WLP1221A65 2012 Jan $65 call - current bid/ask $ 5.10/ 5.35
-stop loss on WLP @ 52.50

10/14/10 Play Triggered when WLP hit $57.75, option @ $5.25

Chart of WLP:


CLOSED Plays

Millicom Intl. - MICC - close: 94.47 change: +1.11

Warning! MICC is starting to roll over. I warned readers last week that the action looked bearish. Shares of MICC have broken their four-month bullish channel and fallen under support near $95 and its 50-dma. On a short-term basis I would expect MICC to retreat toward support near $88.00-87.00 and its 200-dma. Longer-term the trend is still up. If we had longer-dated options I would be tempted to keep the play open and just endure the pull back but 2012 options were not available when we launched this play. Thus, I'm suggesting we exit now to preserve capital. Nimble traders can keep MICC on their watch list should the stock find support at its long-term trendline.

Exit Early!

May 6, 2010 - entry price on MICC @ 80.00, option @ 8.60
symbol: MICC 11A90.00 2011 Jan $90 call - current bid/ask $ 7.90/ 8.40
-stop loss on MICC @ 89.75

10/23/10 Exit early, bid @ 7.90 (-8.1%)
10/16/10 New stop @ 89.75
09/04/10 Take Profits Early, MICC @ 98.79, option @ $12.90 (+50%)
plus new stop at $86.40

Chart of MICC:


PEPSICO Inc. - PEP - close: 65.01 change: -0.17

I'm giving up on our PEP play. Shares produced a failed rally two weeks ago and the oversold bounce has rolled over under resistance near $67.00. Now shares are flirting with support near $65.00. I am suggesting an early exit now to avoid a loss.

Exit early.

July 7th, 2009 - entry price on PEP @ 57.25, option @ $4.50(estimate)
symbol: VP-AL, 2011 $60.00 LEAP call - exit now, bid @ 5.35 (+18.8%)
-stop loss on PEP at $63.80

10/23/10 Exit early, option bid @ 5.35 (+18.8%).
10/16/10 New stop @ 63.80
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: