Closed Plays


KBH has been closed.


Play Updates


Allergan Inc. - AGN - close: 87.74

Comments:
12/31/11 update: AGN has continued to drift higher but momentum indicators are suggesting that AGN is slowing down. I would not be surprised to see a pull back toward what should be support near $85.00 if the market declines.

The good news this week is that the spreads on the 2013 calls have narrowed (in our favor).

Keep in mind that the 2011 highs near $89.25 could be resistance.

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 $ 3.60/ 4.60

12/24/11 new stop loss @ 81.60
12/10/11 spreads on our 2013 calls are getting wider!
11/19/11 Taking an aggressive stance on our stop loss and moving it down to $77.45
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: 81.60
Play Entered on: 10/17/11
Originally listed on the Watch List: 09/24/11


Bank of America - BAC - close: 5.56

Comments:
12/31/11 update: It was a rocky week for BAC but shares pared its losses to less than a nickel. Unfortunately 2011 was a rough year for BAC. The stock was the worst performer among the Dow Jones Industrial Average components with a -58% drop for the year. BAC still has a bearish trend of lower highs and lower lows.

Nimble traders could still try buying calls on bounces off the $5.00 level but readers may want to wait for a close over $6.00 or its 100-dma before considering new bullish positions. We only have three weeks left before 2012 January options expire.

While financials were some of the worst performers in 2011 the outlook is improving for 2012 with growth in business lending. I will note that there was a recent article on BAC suggesting that company may still have to raise up to $45 billion in capital over the next few years as it struggles with the bad mortgage burdens from its Countrywide acquisition. It will be interesting to hear what BAC has to say in its earnings report. BAC is due to report earnings on January 19th.

- Suggested Positions -
AUG 29, 2011 - entry price on BAC @ 8.10, option @ 0.57
symbol: BAC1221A10 2012 JAN $10 call - current bid/ask $ 0.00/ 0.01
(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 $ 0.21/ 0.23
(No stop loss on this position)

(2nd Position, bought the dip at $5.15)

NOV 23, 2011 - entry price on BAC @ 5.15, option @ 0.35
symbol: BAC1319A10 2013 JAN $10 call - current bid/ask $ 0.21/ 0.23
(no stop loss on this position)

12/17/11 expect BAC to retest the $5.10-5.00 zone.
11/23/11 BAC hits new trigger @ 5.15 to buy calls.
11/19/11 New trigger to buy calls @ $5.15 (see 2nd 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: 35.24

Comments:
12/31/11 update: Strategy Update - I am taking a more conservative approach tonight. We want to go ahead and lock in some gains. I am suggesting we sell at least half of our BMY calls to take some money off the table. We will still keep a position active but I want to warn you that BMY could easily see a correction in January after five weeks of gains.

We'll lock in gains on Tuesday morning. Our final target for the remaining position is still $37.50.

We will raise our stop loss up to $31.45. I am not suggesting new positions at this time.

- Suggested Positions -
SEP 19, 2011 - entry price on BMY @ 30.53, option @ 1.20
symbol: BMY1319A35 2013 JAN $35 call - current bid/ask $ 2.60/ 2.67

12/31/11 new stop loss @ 31.45.
12/31/11 Prepare to lock in gains and sell half of our position on Tuesday morning (Jan 3rd, 2012). The 2013 Jan $35 call currently has a bid at $2.60 (a +116.6% gain).
12/16/11 BMY hit our previous exit target at $34.50, more conservative traders may want to take profits now and exit early.
12/10/11 adjust exit target to $37.50
12/03/11 reduce our two exit targets to just one at $34.50
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.

Chart of BMY:

Current Target: $37.50
Current Stop loss: 29.40
Play Entered on: 09/19/11
Originally listed on the Watch List: 09/10/11


Beazer Homes - BZH - close: 2.48

Comments:
12/31/11 update: It was a volatile week for homebuilders but the group got a bounce out of the stronger than expected pending home sales report. BZH is still building a bullish pattern of higher lows. The current challenge for the bulls is resistance in the $2.50-2.60 area. Beyond that BZH could have resistance at its simple and exponential 200-dma (near 2.86 and 2.75, respectively). I am not suggesting new positions at this time. FYI: The P&F chart for BZH is bullish with a $4.75 target.

- 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 $ 0.85/ 1.00

12/24/11 new stop loss @ 1.95
12/03/11 new stop loss @ 1.85
11/26/11 new stop loss at $1.75
11/15/11 BZH reports a loss of 57 cents a share, worse than expected
11/12 BZH has seen a big bounce. Cautious investors may want to take profits now before BZH reports earnings on Nov. 15th. (BZH +13.2%, option +21.4%)
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: 1.95
Play Entered on: 10/28/11
Originally listed on the Watch List: 10/22/11


Cisco Systems - CSCO - close: 18.08

Comments:
12/31/11 update: Trading in CSCO took a turn for the worse last week. Shares are back under their 50-dma. A breakdown under the December low near $17.62 would be very bearish. More conservative traders might want to consider a higher stop loss. I am not suggesting new positions at this time.

Optimistically CSCO is building a neutral pennant pattern of lower highs and higher lows but it will take a breakout higher to reaffirm the prior up trend.

- Suggested Positions -
OCT 28, 2011 - entry price on CSCO @ 18.28, option @ 1.68
symbol: CSCO1319A20 2013 JAN $20 call - current bid/ask $1.54/1.58

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


CSX Corp. - CSX - close: 21.06

Comments:
12/31/11 update: Railroad stocks have been consolidating sideways with the rest of the transportation sector. Unfortunately for CSX this sideways move is starting to look like a lower high in its series of lower highs. If the market declines in January then we'll probably see CSX retesting support near $20.00. Nimble traders could buy dips near $20.00 but I am not suggesting new positions at this time. The $22 area with its exponential 200-dma and the 150-dma could be tough technical resistance for CSX to chew through. Fortunately if the transports do breakout it will provide a positive influence on shares of CSX.

Earlier Comments:
I do see potential resistance at the $24.00 level and the $26.75-27.00 zone. Yet the Point & Figure chart for CSX is bullish with a $33.50 target.

- Suggested Positions -
NOV 14, 2011 - entry price on CSX @ 22.59, option @ 2.24
symbol: CSX1319A25 2013 JAN $25 call - current bid/ask $ 1.21/ 1.22

- or -

NOV 14, 2011 - entry price on CSX @ 22.59, option @ 3.30
symbol: CSX1418A25 2014 JAN $25 call - current bid/ask $ 2.17/ 2.48

12/17/11 CSX is starting to bounce from support near $20. This can be used as a new entry point
11/26/11 I had cautioned readers to expect a potential dip to $20.00. CSX hit this level on Friday.

Current Target: $29.75
Current Stop loss: 19.75
Play Entered on: 11/14/11
Originally listed in the New Plays 11/12/11


Enterprise Products Partners - EPD - close: 46.38

Comments:
12/31/11 update: EPD spent almost two weeks hovering near technical support at its 50-dma. That changed this past week with the stock showing relative strength. Shares have rallied toward their all-time highs set in early December. I am not suggesting new positions at this time.

There is additional good news with the options. The spreads on our 2013 Jan $50 calls has narrowed to a much more normal breadth (see below).

Earlier Comments:
Our long-term target is $59.00 but bear in mind that EPD doesn't move very fast. FYI: The Point & Figure chart for EPD is bullish with a $60 target. I am listing the 2013 calls but there are also 2014s available (with a much wider spread).

- Suggested Positions -
Nov 21, 2011 - entry price on EPD @ 45.17, option @ 1.45
symbol: EPD1319A50 2013 JAN $50 call - current bid/ask $ 1.00/ 1.15

12/31/11 2013 Jan $50 call spreads have improved significant.
12/24/11 spreads on the 2013 Jan $50 calls have widened significantly.
12/08/11 EPD gapped down on news of a 9 million share secondary price at $44.68.

Current Target: $59.00
Current Stop loss: 41.75
Play Entered on: 11/21/11
Originally listed in the New Plays 11/19/11


Hewlett-Packard - HPQ - close: 25.76

Comments:
12/31/11 update: HPQ was one of the Dow Jones Industrials' worst performers in 2011 with a -38.8% drop from its 2010 closing price of $42.10. On a short-term basis the stock has been stuck in the $26-25 zone for almost two weeks. A breakdown under $25.00 would look very bearish. We currently have a stop loss at $24.75. I am not suggesting new positions at this time.

- Suggested (SMALL) Positions -
Longer-term Trade
Sep 26, 2011 - entry price on HPQ @ 22.59, option @ 3.75
symbol: HPQ1319A25 2013 JAN $25 call - current bid/ask $ 4.40/ 4.50
Stop Loss @ 24.75

12/03/11 new stop loss @ 24.75
11/19/11 Readers need to decide: Take profits now (+76%) or hold on and expect some volatility following HPQ's earnings report on Nov. 21st
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


Kraft Foods Inc. - KFT - close: 37.36

Comments:
12/31/11 update: Investors may want to lock in gains right now. KFT hit new multi-year highs last week but the failed rally under $38.00 looks like a potential bearish reversal. Then again the drop on Wednesday morning was probably due to KFT trading ex-dividend. I would stay cautious anyway.

The $36.00 level should be decent support but more conservative traders may want to take some money off the table now while our option is up +68%. I am not suggesting new positions at this time. FYI: The Point & Figure chart is forecasting a long-term target at $49.50.

Earlier Comments:
NOTE: KFT is normally 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 $ 3.95/ 4.10

12/31/11 Investors may want to take profits now.
12/28/11 begins trading ex-dividend
12/24/11 new stop loss @ 34.25
12/03/11 new stop loss @ 33.85, adjusted exit target to $40.00
11/12/11 new stop loss @ 32.40

Current Target: $40.00
Current Stop loss: 34.25
Play Entered on: 09/22/11
Originally listed on the Watch List: 09/17/11


Kimberly-Clark Corp. - KMB - close: 73.56

Comments:
12/31/11 update: KMB is hovering near its all-time highs (set this past week) but the stock has also been struggling with new resistance at the $74.00 level. You could argue that KMB is short-term overbought. I would not be surprised to see a dip back toward $72.00, which should be new support.

FYI: The P&F chart's bullish target has risen from $98 to $109.

Earlier Comments:
KMB does have long-term resistance in the $73.00-73.50 area. Therefore we will only start with small (half-sized) positions. When KMB closes above $74.00 we'll reconsider adding new positions to this play. Our long-term target is $79.75 but we'll readjust it as the play progresses. The Point & Figure chart is currently suggesting a long-term target of $109. NOTE: KMB does not move very fast. Investors may want to try and maximize their returns by changing this into a vertical (a.k.a. calendar) spread.

- Suggested Positions -
(half sized position)
Nov 07, 2011 - entry price on KMB @ 69.50, option @ 2.05
symbol: KMB1319A75 2013 JAN $75 call - current bid/ask $ 3.30/ 3.40

12/24/11 New stops loss @ 68.25. KMB has broken out to all-time highs.

Current Target: $79.75
Current Stop loss: 68.25
Play Entered on: 11/07/11
Originally listed in the New Plays 11/05/11


LDK Solar Co. Ltd. - LDK - close: 4.19

Comments:
12/31/11 update: Ouch! LDK has been a terrible performer. We had waited for a breakout past resistance near $5.00 but shares of LDK immediately reversed once our trade was opened. The stock is down five days in a row (-20%). It's possible that what we just witnessed was some last minute tax-loss selling.

I would hesitate to open new positions here. More conservative traders may want to raise their stops closer to the $4.00 area.

- Suggested Positions -
(buy LDK stock)
Dec 23, 2011 - entry price on LDK @ 5.31

- or -

Dec 23, 2011 - entry price on LDK @ 5.31, option @ 0.89
symbol: LDK1319A5 2013 JAN $5 call - current bid/ask $ 0.50/ 0.62

Current Target: $ 9.00
Current Stop loss: 3.25
Play Entered on: 12/23/11

Originally listed on the Watch List: 12/17/11


Pepsico, Inc. - PEP - close: 66.35

Comments:
12/31/11 update: The last week of the year proved to be a quiet one for PEP. The stock has been trading sideways in the $66.00-66.80 zone. Since PEP doesn't move very fast you certainly have choices on when to launch positions. Readers could wait for another bounce in the $65.50-65.00 zone or wait for a new relative high over $67.00 as your entry point.

Our target is $71.75. I would keep our position size small to limit our risk. FYI: The Point & Figure chart for PEP is bullish with an $81 target.

- Suggested (SMALL) Positions -
Dec 27, 2011 - entry price on PEP @ 66.47, option @ 2.70
symbol: PEP1319A70 2013 JAN $70 call - current bid/ask $ 2.62/ 2.73

12/27/11 launch positions at the open on Tuesday
12/23/11 PEP meets our entry point requirements at the closing bell.

Current Target: $71.75
Current Stop loss: 62.75
Play Entered on: 12/27/11
Originally listed on the Watch List: 12/10/11


QUALCOMM Inc. - QCOM - close: 54.70

Comments:
12/31/11 update: QCOM only added seven cents for the week. More importantly traders bought the dip on Tuesday and Wednesday. Now shares of QCOM are hovering under resistance at the $55.00 mark. I am hesitant to open new positions at this time. January could be a tough month of the stock market. More conservative traders might want to consider a higher stop loss.

Earlier Comments:
QCOM reported much better than expected earnings, beating both the top and bottom line estimates. Management raised their guidance looking ahead. The company is reaping the benefits from the booming smartphone market. The CEO said there is over 300 new devices in development that will use QCOM electronics inside. That sounds like there is a lot of potential for growth.

- Suggested (SMALL) Positions -
NOV 23, 2011 - entry price on QCOM @ 52.50, option @ 4.90
symbol: QCOM1319A60 2013 JAN $60 call - current bid/ask $ 4.60/ 4.75

11/23/11 QCOM hits our trigger @ 52.50

Current Target: $74.50
Current Stop loss: 49.40
Play Entered on: 11/23/11
Originally listed on the Watch List: 11/05/11


Reynolds American Inc. - RAI - close: 41.42

Comments:
12/31/11 update: In last week's low-volume environment, RAI did not have enough fuel to get past resistance near $42.00. I would not be surprised to see shares fade lower toward support near $40.00 or technical support at its 50-dma. Wait for that dip before considering new bullish positions.

- Suggested Positions -
Nov 18, 2011 - entry price on RAI @ 40.02, option @ 2.00
symbol: RAI1319A42.5 2013 JAN $42.50 call - current bid/ask $ 2.05/ 2.25

Current Target: $49.00
Current Stop loss: 37.85
Play Entered on: 11/18/11
Originally listed on the Watch List: 10/22/11


Starbucks Corp. - SBUX - close: 46.01

Comments:
12/31/11 update: 2011 was a good year for SBUX. The stock is up +43% in the last twelve months. SBUX managed to tag new all-time highs last week but shares have stalled at new resistance near $46.50. I don't see any changes from last week's comments. I would still consider new (small) bullish positions on dips in the $45.00 area. More conservative traders might want to use a higher stop loss. FYI: The Point & Figure chart for PEP is bullish with a long-term $75 target.

NOTE: 2014 calls are also available.

- Suggested (SMALL) Positions -
Dec 27, 2011 - entry price on SBUX @ 45.40, option @ 4.00
symbol: SBUX1319A50 2013 JAN $50 call - current bid/ask $ 4.10/ 4.25

12/27/11 launch positions at the open on Tuesday

Current Target: $55.00
Current Stop loss: 39.75
Play Entered on: 12/27/11
Originally listed on the Watch List: 12/10/11


Sherwin-Williams Co. - SHW - close: 89.27

Comments:
12/31/11 update: The rally in SHW stalled near the $90 level last week. Broken resistance in the $88-87 zone should be new support. Investors can look for a bounce in this area as a new entry point for bullish positions.

- Suggested Positions -
Dec 23, 2011 - entry price on SHW @ 88.92, option @ 3.90
symbol: SHW1319A100 2013 JAN $100 call - current bid/ask $ 4.10/ 4.70

Current Target: $99.50
Current Stop loss: 82.45
Play Entered on: 12/23/11

Originally listed on the Watch List: 12/03/11


Verizon Communications - VZ - close: 40.12

Comments:
12/31/11 update: VZ continued to inch higher and end the year at new three-year highs. You could argue that VZ is short-term overbought here. Readers may want to wait for a dip or a bounce from the $38.50-38.00 zone before considering new bullish positions. VZ normally doesn't move very fast so it's unlikely to get away from us. Our long-term target is $45.00.

- Suggested Positions -
Dec 23, 2011 - entry price on VZ @ 39.42, option @ 2.17
symbol: VZ1319A40 2013 JAN $40 call - current bid/ask $ 2.48/ 2.56

- or -

Dec 23, 2011 - entry price on VZ @ 39.42, option @ 2.87
symbol: VZ1418A40 2014 JAN $40 call - current bid/ask $ 3.20/ 3.30

Current Target: $45.00
Current Stop loss: 36.75
Play Entered on: 12/23/11

Originally listed on the Watch List: 12/17/11


U.S. Steel Corp. - X - close: 26.46

Comments:
12/31/11 update: Shares of X posted a minor gain for the week but really outperformed on Friday with a +3.0% surge. X seems to be building on its bullish trend of higher lows but I am hesitant to launch new positions. There appears to be short-term resistance near $27.00.

More conservative traders may want to up their stop loss toward the $23 area.

Earlier Comments:
This is an aggressive trade because X can be volatile and we have a wide stop loss. That's why we're using small positions to limit our risk.

- Suggested (SMALL) Positions -
Nov 09, 2011 - entry price on X @ 25.50, option @ 5.00
symbol: X1319A30 2013 JAN $30 call - current bid/ask $ 4.60/ 4.75

12/03/11 new stop loss at $21.90
11/09/11 Trade opened at $25.50 (small positions)

Current Target: $37.50
Current Stop loss: 21.90
Play Entered on: 11/09/11
Originally listed on the Watch List: 11/05/11


Exxon Mobil -XOM - close: 84.76

Comments:
12/31/11 update: XOM saw its pre-Christmas rally stall. Shares spent last week consolidating sideways in the $84-86 zone. This isn't too surprising since volume was so light last week and the $85 level was resistance. I am suggesting readers wait for a dip or a bounce in the $83-82 zone before considering new positions. Broken resistance at $82.00 should be new support.

Earlier Comments:
There is potential resistance at $85 and $87.50 but our long-term target is $94.00.

- Suggested Positions -
Dec 22, 2011 - entry price on XOM @ 83.56, option @ 4.63
symbol: XOM1319A90 2013 JAN $90 call - current bid/ask $ 4.95/ 5.05

- or -

Dec 22, 2011 - entry price on XOM @ 83.56, option @ 6.25
symbol: XOM1418A95 2014 JAN $95 call - current bid/ask $ 6.50/ 6.75

Current Target: $94.00
Current Stop loss: 76.40
Play Entered on: 12/22/11

Originally listed on the Watch List: 12/03/11


CLOSED Plays


KB Home - KBH - close: 6.72

Comments:
12/31/11 update: I have been warning readers about the recent weakness in KBH. The volatility last week was too much for our trade. The stock broke down to new multi-week lows and hit our stop loss at $6.38 only to bounce back to a gain for the week. Our stop loss was hit on Dec. 28th.

Earlier Comments:
KBH can be a volatile stock. There is no need to chase it. 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 - exit $0.48 (-61.6%)

12/28/11 stopped out at $6.38, option @ 0.48
12/24/11 Readers may want to exit early. Investors are selling the stock falling its earnings report.
12/03/11 new stop loss @ 6.38
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

Chart of KBH:

Current Target: $9.90
Current Stop loss: 6.38
Play Entered on: 10/19/11
Originally listed on the Watch List: 10/15/11