Closed Plays


None. No closed plays this week.


Play Updates


Allergan Inc. - AGN - close: 83.61

Comments:
11/05 update: As we expected AGN did trade lower. Shares violated the 50-dma on November 1st but found support in the $81-82 zone. The stock quickly rebounded with the market's big bounce. I am still concerned that the reversal that started two weeks ago has painted a big bearish reversal candlestick on the weekly chart. Readers may want to wait for a new close over $86.00 before considering new positions. Our long-term target is $99.00.

Earlier Comments:
Option spreads are wide for these LEAPS. We want to keep our position size pretty small to limit our risk.

- Suggested Positions -
OCT 17, 2011 - entry price on AGN @ 85.46, option @ 5.10
symbol: AGN1319A100 2013 JAN $100 call - current bid/ask $ 2.85/ 4.60

10/22/11 Earnings are coming up. Readers might want to consider raising their stop loss. We are keeping ours at $79.45.

Current Target: $99.00
Current Stop loss: 79.45
Play Entered on: 10/17/11
Originally listed on the Watch List: 09/24/11


Bank of America - BAC - close: 6.49

Comments:
11/05 update: It was an ugly week for BAC. Shares fell from $7.35 a week ago to $6.32 by Tuesday morning (-14%). U.S. financial stocks continued to get battered by headlines out of Europe over worries about what a European meltdown might mean for U.S. banks.

There was big news late in the week for BAC when the company disclosed in their 10-Q filing that they will probably raise capital again by selling more common stock, up to 400 million shares. That sounds like a lot but BAC has 10 billion shares outstanding. That's an increase of 4% or another way to look at it is a dilution of current shareholders by -4%. Yet the stock fell -6.0% on Friday.

The short-term action doesn't look healthy so we're not suggesting new positions at this time.

- Suggested Positions -
AUG 29, 2011 - entry price on BAC @ 8.10, option @ 0.57
symbol: BAC1221A10 2012 JAN $10 call - current bid/ask $ 0.06/ 0.07
(no stop loss on this position)

- or -

AUG 29, 2011 - entry price on BAC @ 8.10, option @ 1.50
symbol: BAC1319A10 2013 JAN $10 call - current bid/ask $ 0.70/ 0.71
(No stop loss on this position)

10/03/11 Sept. 26th position stopped out at $5.75.
2012 Jan. $7.50 call @ 0.48 (-27.2%)
2013 Jan. $10 call @ 0.74 (-26%)
10/01 raising our stop loss on the Sep. 26th position to $5.75
09/24 adding 2nd position, stop loss at $5.40
09/03 no stop loss on this trade at this time.

Current Target: $12.00-to-$15.00
Current Stop loss: see details above
Play Entered on: 08/29/11
Originally listed in the New Plays 08/27/11


Bristol Meyers Squibb - BMY - close: 31.34

Comments:
11/05 update: The post-earnings profit taking in BMY continued the first three days of the week. Shares bottomed on Wednesday with an intraday dip under its 50-dma and the $31.00 level.

I've been discussing the potential for a correction back to $30 for weeks now. That is still a distinct possibility. I would wait for a dip or a bounce near $30 before considering new bullish positions. More conservative traders may want to take profits now.

We have two exit targets. One at $33.50 and a longer-term target at $35.75.

Earlier Comments:
NOTE: BMY is not a very fast moving stock. We will need to be patient.

- Suggested Positions -
SEP 19, 2011 - entry price on BMY @ 30.53, option @ 1.20
symbol: BMY1319A35 2013 JAN $35 call - current bid/ask $ 1.24/ 1.33

10/22/11 BMY is due to report earnings this week on Oct. 27th. Readers may want to take profits now or prior to the report.
10/08/11 new stop loss @ 29.40
09/16 Friday's close at $30.53 is our trigger to buy calls. Our entry will be Monday morning.

Current Target: $33.50 and 35.75
Current Stop loss: 29.40
Play Entered on: 09/19/11
Originally listed on the Watch List: 09/10/11


Beazer Homes - BZH - close: 2.04

Comments:
11/05 update: BZH definitely experienced some profit taking this week. Shares closed down -7.2% but spent most of the week consolidating sideways above round-number support at the $2.00 level. There was an intraday spike down to $1.79 near its simple 50-dma but it lasted less than a minute.

Readers can choose to buy long-term bullish positions now or wait for a possible dip toward the $1.85-1.80 zone. Whether or not BZH will retest the 50-dma will depend on how the broader market performs.

NOTE: BZH is due to report earnings on Nov. 15th before the opening bell. More conservative traders may want to wait and see how the market reacts to this earnings news before considering new bullish positions.

- Suggested Positions -

(stock position)
OCT 28, 2011 - entry price on BZH @ $2.12

(option position)
OCT 28, 2011 - entry price on BZH @ 2.12, option @ 0.70
symbol: BZH1319A2.5 2013 JAN $2.50 call - current bid/ask $ 0.60/ 0.75

10/28 trade begins: BZH opens @ $2.12
10/27 BZH meets our entry point requirement with a close over $2.05

Current Target: $3.70
Current Stop loss: 1.57
Play Entered on: 10/28/11
Originally listed on the Watch List: 10/22/11


CB Richard Ellis - CBG - close: 16.67

Comments:
11/05 update: I warned readers to expect some profit taking, which is why we took some money off the table on Monday.

The correction in CBG continues. The stock is down -15% from its late October high near its exponential 200-dma. Recent weakness has been a bit troubling. It looks like shares are headed for the $16.00-15.00 zone. Unfortunately we have a stop loss at $15.75. If the correction continues we could see this play closing soon.

NOTE: CBG does not have LEAPS. We are using the 2012 March calls.

- Suggested Positions -
OCT 25, 2011 - entry price on CBG @ 16.63, option @ 1.80
symbol: CBG1217C18 2012 MAR $18 call - current bid/ask $ 1.55/ 2.00

10/31 scheduled exit to sell half of our March calls.
exit $2.30 (+27.7%)
10/29 Plan on selling half at the open on Monday to lock in a gain.
new stop loss @ 15.75
adjusted final target from $20.00 to $21.50

Current Target: $21.50
Current Stop loss: 15.75
Play Entered on: 10/25/11
Originally listed on the Watch List: 10/15/11


Computer Sciences Corp. - CSC - close: 32.40

Comments:
11/05 update: CSC essentially closed the week unchanged but it was a rocky week. The stock fell to $29.72 on Nov. 1st but when the market bounced this stock bounced big. Previously I had suggested readers look for a dip near $31 as a possible entry point. Thursday saw a big rebound and a close back above $32 and its 100-dma.

Please note that I am not suggesting new positions at this time. CSC is due to report earnings on Nov. 9th before the market's opening bell. Analyst are expecting a profit of 67 cents a share.

- Suggested Positions -
OCT 28, 2011 - entry price on CSC @ 32.37, option @ 3.30
symbol: CSC1319A35 2013 JAN $35 call - current bid/ask $ 3.50/ 4.20

Current Target: $39.00
Current Stop loss: 27.75
Play Entered on: 10/28/11
Originally listed on the Watch List: 10/22/11


Cisco Systems - CSCO - close: 18.03

Comments:
11/05 update: Last week provided a new entry point. I had suggested waiting for a dip into the $17.75-17.50 zone and CSCO fell toward $17.50 on November 1st. Now comes the hard part. CSCO is due to report earnings on November 9th after the closing bell. Wall Street expects a profit of 39 cents a share. If the company disappoints the stock could crash again.

The $17.00 level should be decent support but if earnings are bad we could see CSCO hit our stop loss at $16.40.

- Suggested Positions -
OCT 28, 2011 - entry price on CSCO @ 18.28, option @ 1.68
symbol: CSCO1319A20 2013 JAN $20 call - current bid/ask $1.69/1.72

10/29/11 new stop loss @ 16.40
10/28/11 stock opens at $18.28
10/27/11 CSCO meets our entry requirement: close at $18.44
10/22/11 Added entry to buy a close over $17.75
10/15/11 We are adjusting our entry point. Wait for a dip to $16.65
10/14/11 CSCO hit our entry point requirement for a close over $17.50.

Current Target: $21.75
Current Stop loss: 16.40
Play Entered on: 10/28/11
Originally listed on the Watch List: 10/08/11


EMC Corp. - EMC - close: 24.67

Comments:
11/05 update: EMC held up reasonably well. After a rocky week and a drop toward its rising 20-dma (near $23.60 on Nov. 1st) the stock has rebounded back toward the $25 level. A week ago it was our plan to exit the rest of our 2012 calls and take profits by selling at least half of our 2013 calls at the open on Monday, October 31st.

I am not suggesting new positions at this time.

Earlier Comments:
The plan was to use small positions to limit our risk.

- Suggested (SMALL) Positions -
(closed on Oct. 31st)
Aug 18, 2011 - entry price on EMC @ 20.25, option @ 2.20
symbol: EMC1221A20 2012 JAN $20 call - exit $4.65 (+111.3%)

- or -

Aug 18, 2011 - entry price on EMC @ 20.25, option @ 1.80
symbol: EMC1319A25 2013 JAN $25 call - current bid/ask $ 3.25/ 3.40

10/31/11 scheduled exit. EMC gapped down at $24.47. The 2012 $20 call opened at $4.65 (+111.3%). We also had plans to sell half of our 2013 $25 calls, which opened at $3.02 (+67.7%)
10/29/11 Plan to sell the rest of our 2012 Jan $20 calls on Monday at the open. Also plan to sell half of our 2013 Jan $25 calls on Monday at the open.
10/29/11 new stop loss @ 22.20
10/22/11 new stop loss @ 21.40
10/17/11 sold half of 2012 calls @ open, bid $3.55 (+61.3%)
10/15/11 Plan to Sell Half of our 2012 calls ASAP
10/08/11 new stop loss @ 19.85
09/24 new stop loss @ 19.49
09/17 new stop loss @ 19.80

Current Target: final target for 2013 calls @ $27.50
Current Stop loss: 22.20
Play Entered on: 08/18/11
Originally listed on the Watch List: 07/23/11


Corning Inc. - GLW - close: 14.54

Comments:
11/05 update: Ouch! The profit taking on Monday and Tuesday last week was rough. I warned readers to look for a dip back toward the $14.00 zone but I wasn't expecting GLW to get there so fast. The stock is rebounding. I would be tempted to launch new positions at current levels.

- Suggested Positions -
OCT 25, 2011 - entry price on GLW @ 14.27, option @ 2.05
symbol: GLW1319A15 2013 JAN $15 call - current bid/ask $2.22/2.28

Current Target: $18.00
Current Stop loss: 12.85
Play Entered on: 10/25/11
Originally listed on the Watch List: 10/22/11


Hewlett-Packard - HPQ - close: 26.97

Comments:
11/05 update: HPQ also suffered some steep profit taking on Monday-Tuesday last week. We had planned to exit the rest of our 2012 calls on Monday at the open. Our 2012 Jan $22.50 calls opened at $5.40 (+100%). We also wanted to sell half of our 2013 calls to lock in a gain. These 2013 January $25 calls opened at $5.70 on Monday (+52%).

I am not suggesting new positions at this time. The company is due to report earnings on November 21st.

- Suggested (SMALL) Positions -
Short(er)-Term Trade (exit Oct. 31st)
Sep 26, 2011 - entry price on HPQ @ 22.59, option @ 2.69
symbol: HPQ1221A22.5 2012 JAN $22.50 call - Exit $5.40 (+100%)
Stop Loss @ 22.85

- or -

Longer-term Trade
Sep 26, 2011 - entry price on HPQ @ 22.59, option @ 3.75
symbol: HPQ1319A25 2013 JAN $25 call - current bid/ask $ 5.60/ 5.80
Stop Loss @ 23.90

10/31/11 scheduled exit for the remainder of our 2012 calls @ the open. Options opened at $5.40 (+100%), plus we sold half of our 2013 $25 calls, which opened at $5.70 (+52%).
10/29/11 new stop loss on 2013 calls at $23.90
10/29/11 prepare to exit remainder of 2012 position on Monday @ open
prepare to sell 1/2 (half) of 2013 position on Monday at open
10/17/11 Planned exit, sell 1/2 of 2012 position, bid @ 4.10 (+52.4%)
10/15/11 new stop loss for the 2012 position @ 22.85
10/15/11 Plan to sell 1/2 of 2012 calls on Monday
10/08/11 new stop loss (both positions) at $21.40

Current Target: 2013 call target: 32.50
Play Entered on: 09/26/11
Originally listed in New Plays: 09/24/11


Hershey Co. - HSY - close: 57.61

Comments:
11/05 update: HSY managed to close the week with a gain. There wasn't much follow through lower although shares did hit a new four-week low on Tuesday but quickly rebounded. The short-term pattern is still somewhat bearish. I am not suggesting new positions at this time but more aggressive traders may want to consider positions in the $57.00-56.00 area. We are keeping our stop loss at $55.40 for now. I'm betting the simple 200-dma will act as support.

- Suggested (SMALL) Positions -
Oct 19, 2011 - entry price on HSY @ 60.57, option @ 3.90
symbol: HSY1319A65 2013 JAN $65 call - current bid/ask $ 1.54/ 2.68

10/29/11 adjust stop loss to $55.40, under 200-dma
10/27/11 reports earnings that are in-line with estimates
10/19/11 HSY opens at $60.57, option opens @ 3.90
10/18/11 HSY meets our entry requirement with a close over $60.25

Current Target: $67.00 & 74.00
Current Stop loss: 55.40
Play Entered on: 10/19/11
Originally listed on the Watch List: 09/17/11


JP Morgan Chase - JPM - close: 36.69

Comments:
11/05 update: Financial stocks have been volatile in reaction to headlines out of Europe. JPM fell from $36.69 Friday a week ago to $31.84 on Tuesday morning (-13.2%) Our plan was to buy a dip at $34.25 but the stock gapped open lower at $32.47 on November 1st, triggering our long-term bullish position.

Given this better than expected entry point I am moving our stop loss down to $29.90 (instead of $31.45). I would still consider new positions now but readers may want to slowly build up to a full position (only buying a few LEAPS at a time, based on your normal position size). Position size is unique to each individual investors based on the size of your account and risk tolerance.

Our long-term target is $46.00.

- Suggested Positions -
Nov 01, 2011 - entry price on JPM @ 32.47, option @ 2.38
symbol: JPM1319A40 2013 JAN $40 call - current bid/ask $ 2.84/ 3.00

11/05/11 new stop loss at $29.90

Chart of JPM:

Current Target: $46
Current Stop loss: 29.90
Play Entered on: 11/01/11
Originally listed on the Watch List: 10/29/11


KB Home - KBH - close: 7.07

Comments:
11/05 update: Ouch! Profit taking in KBH was pretty sharp with a drop from $7.47 on Oct. 28th to $6.40 on Nov. 1st (-14%). Traders bought the dip twice at $6.40 near its 50-dma. A week ago I warned readers that KBH might dip toward the $6.50 level. Investors can use this rebound from its 50-dma as a new bullish entry point.

Earlier Comments:
If there is a breakout the stock could see a short squeeze. The most recent data listed short interest at 52% of the 65 million-share float.

- Suggested Positions -
(Stock Position)
Oct 19, 2011 - entry price on KBH @ 7.17

- or -

(Option Position)
Oct 19, 2011 - entry price on KBH @ 7.17, option @ 1.25
symbol: KBH1319A10 2013 JAN $10 call - current bid/ask $ 0.75/ 1.09

10/19/11 Trade opens. KBH opens @ 7.17, option @ 1.25
10/18/11 KBH meets our entry requirement with a close above $7.00

Current Target: $9.90
Current Stop loss: 5.95
Play Entered on: 10/19/11
Originally listed on the Watch List: 10/15/11


Kraft Foods Inc. - KFT - close: 35.18

Comments:
11/05 update: It proved to be a volatile week for KFT. The stock dipped toward $34.50 and technical support at its 50-dma prior to earnings. Then on Nov. 2nd, after the close, KFT reported earnings of 58 cents a share, which was 3 cents better than expected. Revenues were also stronger than expected. Management raised their 2011 guidance. This news was enough to launch KFT toward its 2011 high on Thursday but the rally stalled $36.30.

The earnings news is bullish but it looks like it's going to take another broad market rally to push KFT to new highs. The good news is that a lot of investors are still focused on high-dividend trades and KFT has a 3.3% yield. I would still wait for a close over $36.00 before considering new positions.

NOTE: KFT is a very slow moving stock. It will take months to make any progress. Once a position is open readers may want to turn these into calendar spreads (a.k.a. vertical spreads).

- Suggested (SMALL) Positions -
Sep 22, 2011 - entry price on KFT @ 32.71, option @ 2.35
symbol: KFT1319A35 2013 JAN $35 call - current bid/ask $ 2.85/ 3.05

Current Target: $38.00
Current Stop loss: 31.75
Play Entered on: 09/22/11
Originally listed on the Watch List: 09/17/11


Limited Brands, Inc. - LTD - close: 42.63

Comments:
11/05 update: It was a rocky week for LTD. The market sell-off on Tuesday pushed LTD toward its rising 30-dma. Then Thursday was a volatile session for retailers as investors reacted to October same-store sales results. Analysts were expecting +6.7% growth from LTD and the company only reported +6.0%. It's still a strong number but less than expected was the trend among retailers. LTD tried to soften the bad news by announcing they would increase their current stock buyback program by another $250 million.

LTD saw a brief dip toward $40 on Thursday while Friday's session was quiet. At this point I would wait for another close over the $44.00 level before considering new bullish positions again.

Don't forget that LTD is due to report earnings in the next couple of weeks (current estimate is around November 17th). The plan was to keep our position size small

- Suggested (SMALL) Positions -
Oct 25, 2011 - entry price on LTD @ 43.70, option @ 4.25
symbol: LTD1319A50 2013 JAN $50 call - current bid/ask $ 3.30/ 3.60

10/25/11 trade begins when LTD opens at $43.70
10/24/11 closed at $43.79, meets our entry point requirement
10/15/11 New Strategy: buy a close over $43.50, stop 37.90
10/01/11 adjusted stop loss to $32.90, if triggered
09/24/11 new trigger @ 35.50, updated 2013 option strike
09/17/11 new trigger @ 37.50, updated option strikes.

Current Target: $54.00
Current Stop loss: 37.90
Play Entered on: 10/25/11
Originally listed on the Watch List: 08/27/11


Red Hat Inc. - RHT - close: 50.59

Comments:
11/05 update: RHT posted a loss for the week but the volatility provided a better than expected entry point. RHT was on our watch list with a trigger to buy calls on a dip at $48.50. Shares gapped open lower at $47.70 on November 1st triggering our play. Traders bought the dip and shares almost recovered by Friday with a rebound back above the $50 level.

Readers could open new positions here but I'd rather wait for another dip in the $48.50 area. We have a stop loss at $43.95 but more conservative traders may want to consider a stop closer to $46 instead.

- Suggested Positions -
Nov 01, 2011 - entry price on RHT @ 47.70, option @ 4.75
symbol: RHT1319A60 2013 JAN $60 call - current bid/ask $ 4.30/ 5.70

Chart of RHT:

Current Target: $59.75
Current Stop loss: 43.95
Play Entered on: 11/01/11

Originally listed on the Watch List: 10/29/11


Ross Stores Inc. - ROST - close: 89.41

Comments:
11/05 update: ROST continues to show relative strength. During the market sell-off early last week ROST did not break support near $86.00, at least not in a significant way. Shares now look like they are coiling for a breakout past resistance near $90.00.

Please note that we are raising our stop loss to $81.75 since the $83-82 zone should be support. Earnings for ROST are coming up in a couple of weeks. Current estimates place the announcement date around November 18th. We might choose to take profits prior to the earnings announcement. Our current target is $99.00.

- Suggested Positions -
Oct 11, 2011 - entry price on ROST @ 84.36, option @ 5.30
symbol: ROST1319A100 2013 JAN $100 call - current bid/ask $ 6.50/ 6.90

11/05/11 new stop loss @ 81.75
10/22/11 new stop loss @ 79.25
10/15/11 adjusted stop loss to $77.00
10/11/11 ROST opened at $84.36
10/10/11 ROST closed above $83, our requirement to open the trade
10/08/11 adjusted option strike to 2013 Jan. $100 call
10/01/11 new strategy: buy a close over $83.00
09/24/11 new trigger at $73.00, stop 69.50
09/17/11 new trigger at $76.50, stop @ 71.40, new strikes.

Current Target: $99.00
Current Stop loss: 81.75
Play Entered on: 10/11/11
Originally listed on the Watch List: 09/10/11