Closed Plays


ADI and UA were closed early as planned.
GE was stopped out. We also exited our MRK 2014 calls to lock in gains.



Play Updates


American Intl. Group - AIG - close: 38.88

Comments:
04/20/13: The stock market's pullback last week pushed AIG toward $38 before shares rebound. If this market weakness continues we could see AIG dip toward the next level of support near $37.00.

I am not suggesting new positions at this time. FYI: AIG is scheduled to report earnings on May 2nd.

Earlier Comments:
Our plan was to keep our initial position size small to limit our risk. We will plan on exiting our 2014 calls when shares hit $42.50.

- Suggested Positions - (small positions @ first)
(closed on Dec. 24th)
May 18, 2012 - entry price on AIG @ 28.25, option @ 3.40
symbol: AIG1319A30 2013 JAN $30 call - exit @ $5.00 (+47.0%)

- or -

May 18, 2012 - entry price on AIG @ 28.25, option @ 4.20
symbol: AIG1418A35 2014 JAN $35 call - current bid/ask $ 6.15/ 6.25

04/13/13 new stop loss @ 35.75
02/02/13 new stop loss @ 34.40
01/26/13 new stop loss at $32.75
12/24/12 closed our 2013 call position at the open.
Our exit was at $5.00 (+47.0%)
12/22/12 Exit the 2013 calls immediately on Monday morning
current bid is at $4.80
..for prior updates, check older newsletters

Current Target:$ 2013 call: $37.00, 2014 calls: $42.50
Current Stop loss: 35.75
Play Entered on: 05/18/12
Originally listed on the Watch List: 04/07/12


Bank of America - BAC - close: 11.66

Comments:
04/20/13: BAC suffered a -4% loss on the week as investors reacted to the company's earnings repot. BAC reported on April 17th and delivered a profit of 20 cents a share. That was two cents worse than expected . Revenues appear to have beaten estimates at $23.7 billion for the quarter. Investors decided to sell the news and shares dropped sharply on the 17th and 18th. Yet two analyst firms upgraded their price targets on BAC's stock following the earnings results.

On a short-term basis BAC appears to be a four-week trend of lower highs and lower lows (a.k.a. a bearish trend). The next level of support is $11.00 and we have our stop loss at $10.90.

I am not suggesting new positions at this time.

- Suggested Positions -
MAR 18, 2013 - entry price on BAC @ 12.29, option @ 0.44
symbol: BAC1418a15 2014 JAN $15 call - current bid/ask $0.24/0.25

- or -

MAR 18, 2013 - entry price on BAC @ 12.29, option @ 1.13
symbol: BAC1517a15 2015 JAN $15 call - current bid/ask $0.83/0.86

Current Target:$ 18.00
Current Stop loss: 10.90
Play Entered on: 03/18/13

Originally listed on the Watch List: 03/09/13


Bed Bath & Beyond - BBBY - close: 66.77

Comments:
04/20/13: Believe it or not BBBY is virtually unchanged for the week. That's impressive when the S&P 500 just suffered its worst week for the year. Traders continue to buy the dips in BBBY and the stock is marching higher.

I am not suggesting new positions at this time.

- Suggested Positions -
MAR 21, 2013 - entry price on BBBY @ 63.06, option @ 5.20
symbol: BBBY1418a65 2014 JAN $65 call - current bid/ask $6.95/7.10

04/13/13 new stop loss @ 62.25
03/30/13 Nimble traders could exit now (for a small profit) and re-enter positions on a pullback.
03/21/13 trade opens with BBBY opening at $63.06
03/20/13 BBBY meets our entry requirement (close over $62.50) with a close at $63.34

Current Target:$ 74.50
Current Stop loss: 62.25
Play Entered on: 03/21/13
Originally listed on the Watch List: 03/16/13


Colgate-Palmolive - CL - close: 119.72

Comments:
04/20/13: CL continues to show relative strength. The stock ignored the market's weakness and rallied to another new high. Shares look poised to breakout past the $120.00 level. Our 2014 call option has hit a bid of $8.90 (+111%). Readers will want to seriously consider an early exit now to lock in profits.

CL is scheduled to report earnings on April 25th, before the opening bell. I am suggesting we plan on an early exit and close positions on April 23rd (Tuesday) at the closing bell. I am raising our stop loss to $115.90.

- Suggested Positions - (small positions)
FEB 20, 2013 - entry price on CL @ 112.00, option @ 4.20
symbol: CL1418a115 2014 JAN $115 call - current bid/ask $ 8.90/ 9.15

04/20/13 new stop loss @ 115.90, readers may want to exit immediately!
Plan on exiting positions April 23rd at the closing bell
04/13/13 new stop loss @ 114.35
Investors may want to just take profits now with the bid on our call at $7.15.
03/30/13 new stop loss @ 109.90
03/16/13 new stop loss @ 108.40

Current Target:$ 124.50
Current Stop loss: 115.90
Play Entered on: 02/20/13
Originally listed on the Watch List: 02/16/13


Chevron Corp. - CVX - close: 115.90

Comments:
04/20/13: It was definitely a rough week for the energy sector. A plunge in commodities, including crude oil, helped pull the energy stocks lower. CVX crashed from $120 toward $114 before bouncing on Thursday. Currently our stop loss is $113.25. More conservative traders may want to inch their stop higher.

Don't forget that CVX is scheduled to report earnings on April 26th, before the opening bell. Wall Street expects a profit of $3.08 a share.

I am not suggesting new positions at this time.

- Suggested Positions -
JAN 14, 2013 - entry price on CVX @ 111.38, option @ 3.40
symbol: CVX1418a120 2014 JAN $120 call - current bid/ask $ 4.40/4.50

03/16/13 new stop loss @ 113.25
03/09/13 new stop loss @ 109.50
02/02/13 do not be surprised to see a pullback now that earnings have been announced.

Current Target:$124.50
Current Stop loss: 113.25
Play Entered on: 01/14/13
Originally listed on the Watch List: 12/22/12


Dollar Tree, Inc. - DLTR - close: 47.47

Comments:
04/20/13: DLTR managed to weather the market's recent volatility relatively well. Shares lost less than half a point for the week. The stock appears to be consolidating sideways in a neutral pattern of higher lows and lower highs.

I remain cautiously optimistic here but we are not suggesting new positions.

- Suggested Positions -
FEB 28, 2013 - entry price on DLTR @ 45.25, option @ 4.76
symbol:DLTR1418a45 2014 JAN $45 call - current bid/ask $ 5.80/6.10

04/13/13 new stop loss @ 44.75
03/30/13 new stop loss @ 43.45
More conservative investors might want to take profits as DLTR moves into the $49-50 zone.
03/16/13 new stop loss @ 41.40
02/28/13 trade opened following gap higher, above our trigger

Current Target: $53.50
Current Stop loss: 44.75
Play Entered on: 02/28/13
Originally listed on the Watch List: 02/23/13


The Coca-Cola Company - KO - close: 42.66

Comments:
04/20/13: It's tough to feel bad booking a +95% jump in an option but suddenly I wish we still had those 2014 January $40 calls. They are significantly higher now following KO's rally.

KO reported earnings on April 16th and beat estimates by one cent at 46 cents a share. Revenues came in better than expected at $11.04 billion for the quarter. These better than expected results sparked a rally in KO that ushed shares to new 15-year highs.

KO's all-time high is $44.47 from July 1998. We are leaving the long-term exit target at $44.00 but readers may want to seriously consider taking profits right now with the bid on our 2015 call at $4.70.

I am raising the stop loss to $39.65.

- Suggested Positions -
(closed 2014 calls on April 1st, 2013 at the open)
FEB 12, 2013 - entry price on KO @ 38.05, option @ 1.01
symbol: KO1418a40 2014 JAN $40 call - exit $1.97 (+95.0%)

- or -

FEB 12, 2013 - entry price on KO @ 38.05, option @ 1.75
symbol: KO1517a40 2015 JAN $40 call - current bid/ask $4.70/4.80

04/20/13 new stop loss @ 39.65, readers may want to take profits now.
04/01/13 exited 2014 calls at the open. Option @ $1.97 (+95.0%)
03/30/13 prepare to exit our 2014 Jan $40 calls on Monday, April 1st, 2013 at the opening bell to lock in gains. Current bid is $2.09.
03/30/13 new stop loss @ 38.25
03/23/13 new stop loss @ 37.65
Our 2014 calls have almost doubled and readers may want to take profits early right now

Current Target: $44.00
Current Stop loss: 39.65
Play Entered on: 02/12/13
Originally listed on the Watch List: 02/09/13


Macy's Inc. - M - close: 43.54

Comments:
04/20/13: There was some drama in the retail world this past week. Macy's was granted a restraining order to prevent J.C. Penney(JCP) from selling certain Martha Steward (MSO) products. Macy's is arguing that they have an exclusive to sell certain Martha Steward products. Meanwhile outside the court room shares of Macy's were not immune to the market sell-off. Yet traders bought the dip near $43.

If the market weakness continues I would expect shares of M to trade to $42. I am not suggesting new positions at this time.

Earlier Comments:
The old all-time highs near $46.50 could be resistance but at the moment we are aiming for $48.50. FYI: The Point & Figure chart is bullish with a $53 target.

- Suggested Positions -
MAR 21, 2013 - entry price on M @ 42.22, option @ 2.85
symbol: M1418a45 2014 JAN $45 call - current bid/ask $3.20/3.30

Current Target: $48.50
Current Stop loss: 39.25
Play Entered on: 03/21/13
Originally listed on the Watch List: 03/09/13


Merck & Co. - MRK - close: 47.49

Comments:
04/20/13: MRK displayed relative strength by posting a gain for the week. A week ago MRK looked short-term overbought. We adjusted the plan to exit our 2014 Jan. $45 calls on Monday, April 15th at the opening bell. Fortunately for the bulls there was no big profit taking in MRK. Traders were buying the dip near $46.50 all week. By Friday's closing bell the stock was once again testing short-term resistance at $47.50.

I remain concerned that the 2012 high near $48.00 could be resistance. Plus, MRK could see some profit taking after they report earnings on May 1st, which is just a few days away. Currently our stop; loss is at $43.40. More conservative traders may want to raise their stops.

- Suggested Positions -
(closed 2014 call position on April 15, 2013)
MAR 13, 2013 - entry price on MRK @ 44.54, option @ 2.06
symbol: MRK1418a45 2014 JAN $45 call - exit $3.60 (+74.7%)

- or -

MAR 13, 2013 - entry price on MRK @ 44.54, option @ 3.60
symbol: MRK1517a45 2015 JAN $45 call - current bid/ask $5.30/5.45

04/15/13 closed 2014 calls
04/13/13 prepare to exit 2014 calls on Monday, April 15th at the opening bell.
new stop loss @ 43.40 and new target of $53.50 for 2015 calls.
03/30/13 MRK is not participating in the market's rally or drug sector rally. Investors will want to turn more defensive here.
03/16/13 use the dip to $44.00 as another entry point to buy calls
03/13/13 trade opens with MRK gapping down at $44.54
03/12/13 MRK gaps open higher and closed at $45.04, above our suggested entry (close above $44.25).

Current Target: $53.50
Current Stop loss: 43.40
Play Entered on: 03/13/13
Originally listed on the Watch List: 02/23/13


Starbucks Corp. - SBUX - close: 58.40

Comments:
04/20/13: It was a relatively quiet week for shares of SBUX. Of course considering the week we just had that's probably a good thing. SBUX only suffered a minor decline for the week. I strongly suspect the stock is going to see more volatility later this week following its earnings report. SBUX is scheduled to report on April 25th. Wall Street expects a profit of 48 cents a share. I am not suggesting new positions at this time.

- Suggested Positions -
DEC 07, 2012 - entry price on SBUX @ 53.43, option @ 3.80
symbol:SBUX1418a60 2014 JAN $60 call - current bid/ask $ 4.05/ 4.15

04/13/13 new stop loss @ 54.75, adjust target to $61.50
03/09/13 new stop loss @ 52.75
01/05/13 new stop loss @ 49.85

Current Target:$ 61.50
Current Stop loss: 54.75
Play Entered on: 12/07/12
Originally listed on the Watch List: 12/02/12


The Charles Schwab Corp. - SCHW - close: 16.39

Comments:
04/20/13: SCHW fell more than -4% for the week as investors reacted to earnings news. The company reported on April 15th and missed estimates by a penny although revenues were better than expected at $1.29 billion. The company said trading activity was lower than expected.

I am concerned that the recent sell-off almost looks like the right shoulder to a bearish head-and-shoulders pattern. The $16.00 level has been support in the past and that's why we have a stop loss at $15.90 although more conservative investors might want to just exit early right now to avoid any losses.

Earlier Comments:
Our long-term target is $18.75. More aggressive traders can aim higher. The Point & Figure chart is bullish with a $24 target.

- Suggested *SMALL* Positions -
JAN 23, 2013 - entry price on SCHW @ 15.74, option @ 0.80
symbol:SCHW1418a17 2014 JAN $17 call - current bid/ask $ 0.95/ 1.10

04/20/13 SCHW looks vulnerable following its earnings report and investors may want to exit early.
03/09/13 new stop loss @ 15.90, our call option has more than doubled and readers may want to take profits now.
02/23/13 new stop loss @ $15.20
02/19/13 sold half at the open: option bid @ $1.25 (+56.2%)
02/16/13 prepare to sell half of our position on Tuesday morning, Feb. 19th at the opening bell
02/09/13 investors may want to consider exiting now to book a profit and then jump back in on a correction.

Current Target: $18.75
Current Stop loss: 15.90
Play Entered on: 01/23/13
Originally listed on the Watch List: 01/19/13


U.S. Oil (ETF) - USO - close: 31.39

Comments:
04/20/13: As expected the oil ETF traded lower. Shares actually gapped down on Monday morning at $31.94. The gap down did impact our entry point but sometimes the market doesn't cooperate. The USO briefly traded below potential support near $31.00 (near the November lows) before bouncing. Given the collapse in commodity prices this past you can easily argue that oil and the USO are short-term oversold. I would not be surprised to see a bounce and a failed rally in the $32.25-32.50 zone could be used as a new bearish entry point.

Earlier Comments:
There is still a significant risk that Israel and Iran eventually start shooting at each other as Israel tries to stop Iran's nuclear weapons program. If that happens oil will definitely skyrocket higher. However, no one expects any Israel/Iran conflict until late summer. Oil could plunge to new relative lows before that happens.

Here's the plan. We can aim for a drop into the $30-29 zone (target 29.50). The USO has what appears to be significant support near $29.00. If and when the USO nears this support level we can exit our USO puts for a potential profit and switch to buying calls in anticipation of any rising geopolitical risk in the Mideast.

This is a PUT play

- Suggested Positions -
APR 15, 2013 - entry price on USO @ 31.94, option @ 1.39
symbol: USO1321u30 2013 SEP $30 PUT - current bid/ask $ 1.37/ 1.41

Current Target:$ 29.50
Current Stop loss: 35.05
Play Entered on: 04/15/13
Originally listed on the Watch List: 04/06/13


Wal-Mart Stores - WMT - close: 78.29

Comments:
04/20/13: Shares of WMT were doing a pretty good job of ignoring the market weakness. That changed on Thursday when the stock unexpectedly turned lower following analyst comments voicing concern that WMT's grocery and apparel sales might be weak (source: Bloomberg). Fortunately for the bulls there was no follow through on Thursday's session, which had created a bearish engulfing candlestick reversal pattern. While shares remain near their new all-time highs I would expect WMT to turn lower if the broader market continues to show weakness.

We've got about three weeks before WMT reports earnings on May 16th. More conservative investors may want to take profits now, especially if you're holding the 2014 calls.

- Suggested Positions -
MAR 05, 2013 - entry price on WMT @ 73.47, option @ 3.10
symbol: WMT1418a75 2014 JAN $75 call - current bid/ask $ 5.75/5.90

- or -

MAR 05, 2013 - entry price on WMT @ 73.47, option @ 2.97
symbol: WMT1517a80 2015 JAN $80 call - current bid/ask $ 5.25/5.45

04/13/13 new stop loss @ 73.45
04/06/13 new stop loss @ 71.40
03/30/13 new stop loss @ 69.45

Current Target: $85.00-90.00 range
Current Stop loss: 73.45
Play Entered on: 03/05/13
Originally listed on the Watch List: 02/02/13


CLOSED Plays


Analog Devices - ADI - close: 42.36

Comments:
04/20/13: ADI suffered a rough week. Fortunately we had decided last weekend to exit positions on Monday morning (April 15th). The stock opened at $44.41 on the 15th.

- Suggested Positions -
JAN 03, 2013 - entry price on ADI @ 43.60, option @ 3.10
symbol: ADI1418a45 2014 JAN $45 call - exit $2.75 (-11.3%)

04/15/13 planned exit
04/13/13 exit immediately, prepare to exit on Monday morning at the open
03/29/13 ADI's CEO dies of a heart attack.
03/23/13 ADI still looks poised to retreat lower.
03/16/13 did ADI just create a new lower high?
02/09/13 new stop loss @ 41.90
adjust exit target to $49.00

Chart of ADI:

Current Target:$ 49.00
Current Stop loss: 41.90
Play Entered on: 01/03/13
Originally listed on the Watch List: 12/22/12


General Electric - GE - close: 21.75

Comments:
04/20/13: We were planning to exit our GE positions on April 18th to avoid holding over the company's earnings report. Yet the stock hit our new stop loss at $22.65 on Wednesday, April 17th.

The gap down on Friday morning was a reaction to GE's earnings results and guidance.

- Suggested Positions -
NOV 14, 2012 - entry price on GE @ 20.25, option @ 0.42
symbol: GE1418a25 2014 JAN $25 call - exit $0.58 (+38.0%)

04/17/13 stopped out at $22.65
04/13/13 prepare to exit on Thursday, April 18th at the closing bell
new stop loss @ 22.65
03/09/13 our 2014 Jan $25 call option has doubled. Readers might want to consider taking some money off the table.
02/16/13 new stop loss @ 21.40
02/02/13 new stop loss @ 20.40
12/14/12 GE increased its dividend to 19 cents
11/24/12 new stop loss @ 19.75
11/14/12 triggered at $20.25
11/10/12 adjust the trigger down to $20.25, just above the 200-dma, stop to $19.25
10/27/12 move the buy-the-dip trigger down to $20.50
10/20/12 adjust the buy-the-dip trigger to $21.00 and our stop to $19.45

Chart of GE:

Current Target: $27.50
Current Stop loss: 22.65
Play Entered on: 11/14/12
Originally listed on the Watch List: 09/22/12


Under Armour, Inc. - UA - close: 56.41

Comments:
04/20/13: UA was slowly drifting lower all week with traders buying the dips near its 10-dma. Then on Friday shares gapped open higher following the earnings report. UA reported Friday morning with a profit of 7 cents a share. That was four cents better than expected. Revenues were also a beat at $472 million for the quarter. Gross margins also improved and management expects the trend to continue. Overall it was a good report. Yet reaction to the news was met with selling after the initial pop higher. I am concerned that UA could see a correction back toward the $53-52 zone. Fortunately, our trade is closed. The plan was to exit positions on April 18th at the closing bell to avoid holding over the earnings announcement.

I remain longer-term bullish on UA and we can look at buying a dip or a bounce near $52 and its 200-dma if shares correct that low.

- Suggested *SMALL* Positions -
APR 02, 2013 - entry price on UA @ 52.50, option @ 3.15
symbol: UA1418a60 2014 JAN $60 call - exit $4.30 (+36.5%)

04/18/13 planned exit at the close, prior to earnings
04/13/13 new stop loss at $53.75, adjust target to $59.00,
prepare to exit on Thursday, April 18th if UA does not hit our target by then.
04/02/13 triggered at $52.50

Chart of UA:

Current Target: $59.00
Current Stop loss: 53.75
Play Entered on: 04/02/13
Originally listed on the Watch List: 03/30/13