Closed Plays


The stock market volatility hit extremes last week. The VIX spiked to levels not seen since 2011.

The widespread market declines were enough to close nearly all of our active trades.

CELG, EXPE, HBI, LMT, MS, MSFT, NKE, VFC, WFC, WLP all hit our stop loss last week. We also saw DVA hit our stop to exit the 2015 calls.



Play Updates


DaVita Healthcare Partners - DVA - close: 72.75

Comments:
10/19/14: DVA weathered the market volatility relatively well. Unfortunately the weakness DVA did see was enough to hit our new stop loss at $71.75 to close our 2015 call position.

The stop loss for our 2016 calls remains DVA at $69.85.

DVA is scheduled to report earnings on November 6th. I am not suggesting new positions at this time.

Earlier Comments: June 1, 2014:
DVA is in the healthcare sector. The company provides kidney dialysis services and related lab services. The most recent earnings report was lackluster but DVA did report revenue growth above Wall Street estimates. Management has been buying up smaller domestic rivals and expanding overseas into countries like China, Columbia, Germany, India, Malaysia, Portugal, Saudi Arabia, and Taiwan. In the U.S. DVA has about 35% of the outpatient dialysis market.

Bears on this stock would argue the company is at risk for pricing pressures from Medicare. About 90% of its total U.S. dialysis patients are on some form of government-assisted program. Nearly 80% of are part of Medicare. The latest rules from Medicare said there would be no price changes in 2014 and 2015 but there could be reimbursement reductions in 2016 and 2017.

This pressure from Medicare has not stopped Warren Buffet's Berkshire Hathaway from raising its stake in DVA. Berkshire started investing in DVA back in Q4 2011. They have been slowly building a position and this past quarter (Q1 2014) Berkshire added another 1.1 million shares. Their total position is now 37.6 million shares worth about $2.6 billion. Berkshire tends to be a long-term investors, longer than our timeframe but it is still a vote of confidence for DVA.

- Suggested Positions -
(Closed on October 16, 2014)
JUN 04, 2014 - entry price on DVA @ 71.44, option @ 2.65*
symbol: DVA150117C75 2015 JAN $75 call - exit $1.65** (-37.7%)

- or -

JUN 04, 2014 - entry price on DVA @ 71.44, option @ 4.70*
symbol: DVA160115C80 2016 JAN $80 call - current bid/ask $3.00/4.90

10/16/14 DVA hit our stop at $71.75 to close our 2015 calls.
**option exit price is an estimate since the option did not trade at the time our play was closed.
10/12/14 adjusting stop loss strategy:
Use a stop at $71.75 for the 2015 calls.
Use a stop at $69.85 for the 2016 calls.
08/24/14 new stop at $69.85
07/31/14 DVA reports better than expected bottom and top line results
07/20/14 new stop @ 69.00
06/04/14 trade begins. DVA opens at $71.44
*option entry price is an estimate since the option did not trade at the time our play was opened.
06/03/14 DVA closed at $71.47, above our trigger of $71.25
Option Format: symbol-year-month-day-call-strike

Current Target: DVA @ 85.00
Current Stop loss: 69.85 for the 2016 calls, $71.75 for the 2015s
Play Entered on: 06/04/14
Originally listed on the Watch List: 06/01/14



CLOSED Plays


Celgene Corp. - CELG - close: 88.12

Comments:
10/19/14: Biotech stocks are still some of the market's best performers this year. Yet the market volatility has been rough and the group has not been except from the sharp moves.

CELG hit our stop at $88.00 on Monday, October 13th.

- Suggested Positions -
Aug 18, 2014 - entry price on CELG @ 91.00, option @ 3.45*
symbol: CELG150117c100 2015 JAN $100 call - exit $2.25** (-34.7%)

- or -

Aug 18, 2014 - entry price on CELG @ 91.00, option @ 10.00*
symbol: CELG160115c100 2016 JAN $100 call - exit $9.70** (-3.0%)

10/13/14 stopped out at $88.00
**option exit price is an estimate since the option did not trade at the time our play was closed.
10/12/14 Investors may want to raise their stop loss.
08/31/14 new stop @ 88.00
08/18/14 CELG hit our trigger at $91.00 (intraday)
*option entry price is an estimate since the option did not trade at the time our play was opened.
Option Format: symbol-year-month-day-call-strike

Chart

Current Target: CELG 110-120 zone
Current Stop loss: 88.00
Play Entered on: 08/18/14
Originally listed on the Watch List: 08/17/14


Expedia Inc. - EXPE - close: 74.57

Comments:
10/19/14: It has been a horrible October for EXPE thus far. Shares have corrected from $88 to almost $71.00 before paring its losses.

I cautioned readers about the recent weakness and suggested an early exit last week. Now I'm wishing we had taken an early exit.

The stock market's big drop on Monday, October 13th was enough to send EXPE plunging from $81 to its 200-dma near $77. Our stop loss was hit at $79.75.

- Suggested Positions -
JUN 09, 2014 - entry price on EXPE @ 75.30, option @ 8.20*
symbol:EXPE160115C90 2016 JAN $90 call - exit $8.80** (+7.3%)

10/13/14 stopped out @ 79.75
**option exit price is an estimate since the option did not trade at the time our play was closed.
08/24/14 new stop @ 79.75, adjust target to $98.00
08/03/14 new stop @ 76.75
07/31/14 EXPE delivers better than expected earnings and revenue growth
07/06/14 new stop @ 74.75
06/09/14 trade begins. EXPE opens at $75.30
*option entry price is an estimate since the option did not trade at the time our play was opened.
06/06/14 EXPE closes above our trigger, above $75.00
Option Format: symbol-year-month-day-call-strike

Chart

Current Target: EXPE @ 98.00
Current Stop loss: 79.75
Play Entered on: 06/09/14

Originally listed on the Watch List: 06/01/14



Hanesbrands Inc. - HBI - close: 104.46

Comments:
10/19/14: HBI was also stopped out on Monday's big decline in the stock market. Shares sliced through support near $105 and its 50-dma. Our stop was hit at $104.95.

- Suggested Positions -
OCT 03, 2014 - entry price on HBI @ 110.50, option @ 3.80*
symbol: HBI150117c115 2015 JAN $115 call - exit $2.10** (-44.7%)

10/13/14 stopped out at $104.95
**option exit price is an estimate since the option did not trade at the time our play was closed.
10/03/14 Triggered. Credit Suisse tags a $125 price target on HBI, shares soar and breakout past resistance near $110.00. Stock hits our intraday trigger at $110.50.
*option entry price is an estimate since the option did not trade at the time our play was opened.
Option Format: symbol-year-month-day-call-strike

Chart

Current Target: HBI in the $125.00 area
Current Stop loss: 104.95
Play Entered on: 10/03/14
Originally listed on the Watch List: 09/28/14


Lockheed Martin Corp. - LMT - close: 176.24

Comments:
10/19/14: The market's volatile movement last week sent LMT toward the $170 level. Our stop loss was hit at $171.75 on October 15th.

The long-term bullish trend for LMT still works. I would keep this stock on your radar screen. Let us see how it performs after they report earnings this week.

- Suggested Positions -
AUG 19, 2014 - entry price on LMT @ 172.02, option @ 3.40*
symbol: LMT150117C180 2015 JAN $180 call - exit $4.01** (+17.9%)

- or -

AUG 19, 2014 - entry price on LMT @ 172.02, option @ 7.00*
symbol: LMT160115C190 2016 JAN $190 call - exit $7.50** (+7.1%)

10/15/14 stopped out
**option exit price is an estimate since the option did not trade at the time our play was closed.
09/28/14 new stop @ 171.75
09/21/14 new stop @ 168.45
09/14/14 new stop @ 164.75
08/19/14 trade begins. LMT opens at $172.02
*option entry price is an estimate since the option did not trade at the time our play was opened.
08/18/14 LMT closed at $171.52, above our trigger at $171.00
Option Format: symbol-year-month-day-call-strike

Chart

Current Target: LMT @ 199.00
Current Stop loss: 171.75
Play Entered on: 08/19/14
Originally listed on the Watch List: 08/17/14


Morgan Stanley - MS - close: 33.22

Comments:
10/19/14: Financials had a volatile week thanks to the broader market and reaction to earnings reports from several banking stocks. We missed most of the volatility after MS hit our stop on Monday, October 13th at $32.90.

- Suggested Positions -
SEP 05, 2014 - entry price on MS @ 34.42, option @ 1.57*
symbol: MS150117C35 2015 JAN $35 call - exit $1.12** (-28.6%)

- or -

SEP 05, 2014 - entry price on MS @ 34.42, option @ 1.80*
symbol: MS160115C40 2016 JAN $40 call - exit $1.38** (-23.3%)

10/13/14 stopped out
**option exit price is an estimate since the option did not trade at the time our play was closed.
10/12/14 Expect to get stopped out on Monday morning
10/05/14 new stop @ 32.90
09/21/14 new stop @ 32.40
09/05/14 trade begins. MS opens at $34.42
*option entry price is an estimate since the option did not trade at the time our play was opened.
09/04/14 MS closed @ 34.70, above our trigger of $34.60
Option Format: symbol-year-month-day-call-strike

Chart

Current Target: 2015 calls is MS @ 39.50, 2016 calls is MS @ 49.00
Current Stop loss: 32.90
Play Entered on: 09/05/14
Originally listed on the Watch List: 08/31/14


Microsoft Corp. - MSFT - close: 43.63

Comments:
10/19/14: I warned readers last week that MSFT looked poised to hit our stop on Monday. Shares went one better and actually gapped down at $43.82 instead of hitting our stop at $43.90.

- Suggested Positions -
JUN 25, 2014 - entry price on MSFT @ 41.93, option @ 1.05
symbol:MSFT150117c45 2015 JAN $45 call - exit $1.34 (+27.6%)

- or -

JUN 25, 2014 - entry price on MSFT @ 41.93, option @ 2.60
symbol:MSFT160115c45 2016 JAN $45 call - exit $3.25** (+25.0%)

10/13/14 stopped on gap down at $43.82, stop was $43.90
**option exit price is an estimate since the option did not trade at the time our play was closed.
10/12/14 MSFT will likely hit our stop on Monday, Oct 13th.
09/21/14 new stop @ 43.90
09/07/14 new stop @ 41.90
09/07/14 set exit target for 2015 calls: MSFT @ $49.50
08/24/14 new stop @ 41.45
07/27/14 new stop @ $39.75
07/20/14 Our 2015 call option has almost doubled in value and investors may want to take some money off the table.
06/26/14 Trade begins. MSFT opens down at $41.93
06/25/14 MSFT closes at $42.03, above our trigger of $42.00
06/23/14 MSFT closes at $41.99
Option Format: symbol-year-month-day-call-strike

Chart

Current Target: Exit 2015 calls: MSFT @ $49.50
(no target yet to exit the 2016 calls)
Current Stop loss: 43.90
Play Entered on: 06/25/14
Originally listed on the Watch List: 06/15/14


Nike, Inc. - NKE - close: 87.18

Comments:
10/19/14: NKE is another victim of the market's sell-off on Monday, October 13th. Shares hit our stop loss at $86.40. Two days later NKE was added to the "conviction buy" list by Goldman Sachs.

I would keep NKE on your radar screen. A dip back to the $80.00-82.50 area could be a new entry point.

- Suggested Positions -
SEP 07, 2014 - entry price on NKE @ 81.92, option @ $5.20*
symbol: NKE160115c90 2016 JAN $90 call - exit $7.25** (+39.4%)

10/13/14 stopped out at $86.40
**option exit price is an estimate since the option did not trade at the time our play was closed.
10/05/14 new stop @ 86.40
09/28/14 new stop @ 79.45, set exit target at $99.00
09/21/14 earnings are coming up on Sept. 25th
09/08/14 Trade begins. NKE Opens at $81.92
*option entry price is an estimate since the option did not trade at the time our play was opened.
09/07/14 NKE is added to our new play section

Chart

Current Target: $99.00
Current Stop loss: 86.40
Play Entered on: 09/08/14
Originally listed in the New Plays 09/07/14


V.F. Corp. - VFC - close: 63.76

Comments:
10/19/14: VMC dipped to and pierced its simple 200-dma midweek. The stock has started to bounce and it still has a long-term bullish trend of higher lows. Unfortunately the volatility was enough to hit our stop loss at $61.75.

- Suggested Positions -
SEP 15, 2014 - entry price on VFC @ 65.85, option @ 4.50*
symbol: VFC160115C70 2016 JAN $70 call - exit $3.95** (-12.2%)

10/15/14 stopped out
**option exit price is an estimate since the option did not trade at the time our play was closed.
10/12/14 new stop @ 61.75
09/15/14 trade begins. VFC opened at $65.85
*option entry price is an estimate since the option did not trade at the time our play was opened.
09/12/14 VFC met our entry requirement with a close above $65.75
Option Format: symbol-year-month-day-call-strike

Chart

Current Target: VFC 85-90.00 zone
Current Stop loss: 61.75
Play Entered on: 09/15/14
Originally listed on the Watch List: 09/07/14


Wells Fargo & Co. - WFC - close: 48.69

Comments:
10/19/14: A round of big bank earnings helped exaggerate the volatility in the financials. WFC would have hit our stop at $49.90 but they gapped open lower at $49.50 after the company reported earnings on October 14th.

- Suggested Positions -
DEC 26, 2013 - entry price on WFC @ 45.50, option @ 1.50
symbol: WFC1517a50 2015 JAN $50 call - exit $1.51 (+0.0%)

-- or --

DEC 26, 2013 - entry price on WFC @ 45.50, option @ 2.95*
symbol: WFC1615a50 2016 JAN $50 call - exit $3.75** (+27.1%)

10/14/14 stopped out on gap down at $49.50
**option exit price is an estimate since the option did not trade at the time our play was closed.
09/21/14 new stop @ 49.90
09/14/14 a close above $52.10 could be a new bullish entry point to buy 2016 calls.
08/24/14 new stop @ 49.25
08/10/14 adjust stop loss to $48.80
07/11/14 WFC reported earnings that were in-line with estimates
07/06/14 investors may want to take profits before WFC reports earnings on July 11th.
...please see earlier updates for older comments...

Chart

Current Target: Exit WFC hits $59.00
Current Stop loss: 49.90
Play Entered on: 12/26/13
Originally listed on the Watch List: 12/08/13


WellPoint Inc. - WLP - close: 114.99

Comments:
10/19/14: WLP could not escape the market's volatility and shares hit our stop on Monday's market drop. Our play was closed at $114.75.

- Suggested Positions -
JUL 15, 2014 - entry price on WLP @ 113.05, option @ 4.00*
symbol:WLP150117c120 2015 JAN $120 call - exit $3.85** (-3.75%)

-- or --

JUL 15, 2014 - entry price on WLP @ 113.05, option @ 7.35*
symbol:WLP160115c125 2016 JAN $125 call - exit $8.10** (+10.2%)

10/13/14 stopped out
**option exit price is an estimate since the option did not trade at the time our play was closed.
10/02/14 WLP increases its stock buyback program from $1 billion to $6B
09/21/14 new stop @ 114.75
09/07/14 new stop @ 112.25
08/31/14 new stop @ 109.45
08/10/14 technically WLP is showing weakness and investors might want to raise their stop loss.
07/15/14 trade begins. WLP opens at $113.05
07/14/14 triggered. WLP closed at $113.15, above our $111.00 trigger
*option entry price is an estimate since the option did not trade at the time our play was opened.
Option Format: symbol-year-month-day-call-strike

Chart

Current Target: Exit WLP hits $130.00
Current Stop loss: 114.75
Play Entered on: 07/15/14
Originally listed on the Watch List: 07/06/14