Option Investor
Newsletter

Daily Newsletter, Thursday, 4/26/2012

Table of Contents

  1. Market Wrap
  2. New Plays
  3. In Play Updates and Reviews

Market Wrap

Economy and Earnings Wrestle for Spotlight

by Thomas Hughes

Click here to email Thomas Hughes
A mixed bag of earnings reports and economic data seemed to weigh on the markets early in the day but steady and persistent buying sent the Dow up over 100 points.

Earnings were the topic of the day despite disappointing jobless data. This week, and today, marks the midpoint of earnings season for the S&P 500. 258 companies have reported for the recently ended quarter and the outlook for the coming quarter is questionable. There has been some slowness reported in growth in Chinese markets, mixed economic data, especially the rising trend in jobless claims and some surprise earnings misses kept the rally subdued.



Initial jobless claims continued to trend higher despite a reported drop in numbers. The drop of 1,000 claims from last week is due to an upward revision of 3,000 claims for the previous week. The upward revision came as no surprise and continues a trend of revisions in place now for close to two months. Initial jobless claims in the week ending April 21st were 388,000, down from the previous weeks 389,000. The number is at high levels for 2012 and is trending higher. The four week moving average also trended up again by 6,250 claims to 381,750.


Continuing claims also trended up this week. Claims for a second week of unemployment rose by 3000 to an adjusted 3.32 million for the week ending April 14th.


The total number of Americans filing for unemployment benefits fell this week despite the recent rise in initial claims. The total number of unemployment claims is 6.68 million, down 87,000 from the previous weeks data. I am expecting to see an increase in total claims soon, the number lags initial claims by two weeks.


In other economic news signs of life in the real estate market helped to raise hopes. Homebuilder momentum was reported up 15% from the previous month. This measures the rate of business growth in the sector. Pending home sales also reached a nearly 2 year high. Pending home sales rose 4.1% in March to the highest level since April 2010. March's pending home sales data is 12.8% higher than last year at the same time. On the downside, foreclosures are up in the first quarter of 2012. Foreclosure ctivity was centered around some of the nations fasted growing cities including Raleigh, Pittsburgh and New York.

European markets held their ground today as US companies and data were released. No new headlines concerning sovereign debt or austerity crossed the wires that I saw. Attention in Europe today was focused on Rupert Murdoch and the wiretapping scandal.

Asian markets also remained steady over night. Earnings misses and mixed US economic data failed to depress shares. Expectations of a soft-landing and continued growth for China remain in the forefront.

Yields on 30 year treasuries fell slightly today.

30 Year Bond Rates, daily

Gold, silver and copper are gained in today's trading. The fed statements yesterday have increased speculation of future growth into the near future and caused the prices of precious metals to rise. Gold rose by more than 1%, followed by copper's 1.8% and silver with a gain of more than 2%.

The optimistic outlook also led to a small gain in energy. Oil rose by 0.3% in today's trading. Brent crude and gasoline both increased by around 0.7%. Natural gas inventories received another injection this week. Storage levels rose by 47 billion cubic feet, in line with expectations. The price of natural gas actually rose by over 2% to $2.114.

Earnings and outlooks, which have been good so far, took a hit today as a string of disappointments hit the market. Exxon, UPS, H&R Block and Crocs were prominent in the news. Exxon reported that profits were down by 11%, outpacing an 8% increase in revenue. Reduced production and sales volume were blamed in part on the decline. Higher costs of production and increased exploration also contributed to the miss. Analysts had been expecting a drop in profits due to the decline in natural gas prices but the reported decline exceeded the consensus. Revenue, up 8%, increased to $124.05 billion in the quarter and resulted in earnings of $2.00 per share. Analysts were expecting earnings of $2.09. Shares fell more than 1% in early trading but found support at the short term moving average.

Exxon, daily

United Parcel Service increased earnings by 6% in the quarter but failed to meet expectations. Flat demand in overseas business to Asia and Europe have caused the company to consider reducing capacity again. They had already reduced air frieght capacity by 10% last year. Domestic shipping and chain store sales continued to show strength and are expected to increase that by 3.5%-4% this year. Earnings were released after the bell yesterday and caused share price to fall by 2.5% in pre-market trading. The company reported $1.00 per share, analysts had expected $1.02. Mildly high volume caught the stock just above a near term support level.

United Parcel Service, daily

H&R Block is planning on closing offices and cutting jobs. The news was part of a badly received earnings report that sent the stock plummeting over 10% today. In the company's press release they called it a “strategic realignment of organization”. The firm is planning on cutting costs by up to $100 million in the coming fiscal year.

H&R Block, daily

Crocs earnings accelerated the stock's recent decline. The company beat expectations for the first quarter but guided estimates for the second quarter below current expectations. In the first quarter the company increased revenue and widened margins. Revenue increased around 20% and gross margin increased by 0.7% to 53.3%.

Crocs, daily

Akamai Technologies reported an increase in revenue and a decrease in profits. First quarter net revenue increased by 16% in the quarter but gaap earnings per share fell to $0.24 per share. This is an 8% drop in earnings per share over last year. The stock dropped more than 12% on high volume following the news. Share price fell below the short term moving average and near term support.

Akamai Technologies, daily

Whirlpool Corporation announced net earnings of $1.17 per share, compared to last years $2.17. On an adjusted basis, taking into account “unusual items” and restructuring expenses the company earned $1.41 compared to a previous $0.64. Total revenue declined in the quarter by 1% over the previous year, driven by decreased demand. The company reaffirmed its guidance for adjusted yearly earnings per share of $6.50-$7.00.

Whirlpool, daily

Barclays Bank announced that pre-tax profits rose by 22% in the quarter. The gain was driven by retail, invesment and business banking. Return on shareholder equity increased by 2% to 12.2%. The stock traded in a tight range today, just beneath the short term moving average.

Barclays, daily

Celgene is another company increasing profits but missing estimates. Earnings rose in the first quarter by by nearly 57% compared to last year but still fell short of estimates. The company saw broad gains in sales and improved margins. The poorly received gains sent shares tumbling. The stock dropped over 6% today on high volume to close below recent support. The company also announced strategic licensing agreements with Epizyme which will allow Celgene exclusive rights to treatments developed.

Celgene, daily

LSI Corporation, producer and provider of software and micro chip solutions, announced revenue and earnings that beat expectations. Compared to the previous year revenue fell slightly while earnings increased. Non-gaap eps came in at $0.20 per share, compared to an average estimate of $0.14. the Company was able to increase margins across the board. Shares of the stock jumped in early trading but declined throughout the day. Share price fell on heavy volume and dropped below the 30 day moving average. Other chip makers have been reporting good numbers as well.

LSI Corporation, daily

LSI has been outpacing the Philadelphia Semiconductor Index, which has been trending flat for the last 12 months.

Celgene compared to the Philadelphia Semiconductor Index, daily

Jetblue reported earnings and revenue that surpassed last years results and analysts estimates. Higher fares, increased traffic and expanded services outpaced the rising costs of fuel for the air carrier. The company earned $0.09 per share compared to last years $0.01 per share. Last years results were impacted by the major snow storms which shut down most of the countries air lines. Experts had been expecting earnings of $0.08 per share. The stock barely moved on the news, shares are trading in a tight range just above long term support.

Jetblue, daily

Occidental Petroleum posted a small increase in profits as the oil giant benefited from increased production and higher oil prices. The company increased production of oil and natural gas by 3.4% on a liquid basis. The average selling price for oil rose by 17% for the company but were offset by a near 30% decline in natural gas realized prices. Earnings per share of $1.92 were in line with the average estimate. Share price climbed nearly 2% to close just shy of the 30 day moving average.

Occidental Petroleum, daily

Price increases helped Pepsico improve revenue by 4.1% in the quarter. However, profits still slid by 1.4% due to higher costs and increased marketing. Pepsi has been losing US marketshare to Coca Cola and is trying to regain it. The compnay was able to successfully pass along price increases to its customers but failed to match the increase in operational costs. Business in emerging markets increased by 13%.

Pepsico, daily

Four big names reported after the bell today that will surely have an impact on Friday's trading. International retail giants Amazon and Starbucks as well as Coinstar and social media game site Zynga.

Amazon blew away expectations with earnings of $0.28 per share. Revenue also surpassed expectations at $13.2 billion. The report sent shares up over $15 in after hours trading.

Amazon, daily

Starbucks reported earnings 1 penny ahead of estimates. The company earned $.040 versus the estimated $0.39. The gain came on revenue of 3.28 billion compared to the expected 3.18. The coffee and snack retailer is expanding into Asia, especially India and is expecting the growth, plus the addition of its single serve platform later this year to enable continued growth in 2012. The report sparked intense selling after hours, the stock lost over 4.5% following the release.

Starbucks, daily

Revenue for Coinstar, the owner of RedBox, increased by 34% in the first quarter. Strong growth of the brand, same store sales growth and increased kiosk numbers drove the gains. The company is expecting to earn between $4.40 and $4.80 for the fiscal year.

Coinstar, daily

Zynga earned $0.06 per share on revenue of $329 million, slightly ahead of expectations. The stock traded quietly throughout the day in anticipation of the announcement.

Zynga

Earnings are driving the markets higher. The fed's hawkish stance yesterday has increased hopes that the economic recovery is still progressing. Some high profile earnings misses are hurting individual stocks but the general market is still moving ahead. The few earnings disappointments have to be taken in stride though, companies like Exxon and UPS are still making money and increasing profits, just not as fast as last year. The Dow, led by Wal-Mart, gained 115 points today. The index is making a move up from the short term average but it is on weak volume. The index faces some resistance as it approaches recently set highs.

Dow, daily

The S&P 500 made an identical move today. This mornings futures trading indicated a slightly lower opening but earnings news buoyed the index throughout the day. Steady buying brought the index to just shy of 1400. The broad index is moving up from the short term moving average, which has flattened.

S&P 500, daily

The Nasdaq made a small gain today too. The tech heavy index is lagging the Dow and S&P 500 in terms of regaining recently set highs. The technical indicators are beginning to turn up and momentum is becoming bullish.

Nasdaq, daily

Earnings and economic data will continue to drive market direction. Tomorrow look out for the advance number on first quarter GDP. GDP in the fourth quarter of last year was 3.0% and the consensus for the first quarter of 2012 is 2.5% with the high estimate of 2.9%. A reading too far below consensus could derail the current rally. Other data includes the first quarter chain deflator and the final reading of the Michigan Sentiment Index.

The rush of earnings reports also continues tomorrow. Earnings to look out for tomorrow include several regional financial institutions and oil driller Anadarko Petroleum.

Thomas Hughes


New Plays

Consistently Moving Higher

by James Brown

Click here to email James Brown

Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trading ideas and watch list candidates:

(bullish ideas) ATVI, LTD, MAKO, DD, USB, WFC


NEW BULLISH Plays

The Home Depot - HD - close: 51.87 change: -0.04

Stop Loss: 50.75
Target(s): 54.75
Current Gain/Loss: unopened
Time Frame: exit prior to the May 15th earnings report
New Positions: Yes, see below

Company Description

Why We Like It:
This home improvement store giant has continue to see its stock price march higher month after month. Recently shares have been consolidating sideways under resistance at the $52.00 level. A breakout would mean new nine-year highs.

I am suggesting a trigger to launch positions at $52.25 with a stop loss at $50.75. Our short-term target is $54.75 but we'll plan on exiting prior to the May 15th earnings report.

Trigger @ $52.25

Suggested Position: buy HD stock @ (trigger)

- or -

buy the May $52.50 call (HD1219E52.5) current ask $0.72

Annotated chart:

Entry on April xx at $ xx.xx
Earnings Date 05/15/12 (confirmed)
Average Daily Volume = 8.6 million
Listed on April 26, 2011



In Play Updates and Reviews

Third Gain in a Row

by James Brown

Click here to email James Brown

Editor's Note:
The U.S. market is now up three days in a row. It certainly looks like the market is going to end the week with a decent gain. Fortunately many of our bearish candidates are not participating in the market rally but if the bounce continues it's going to cause trouble with our bearish trades.

I am suggesting we exit our CTRP trade at the open tomorrow.

Current Portfolio:


BULLISH Play Updates

Hain Celestial Group - HAIN - close: 47.29 change: +0.50

Stop Loss: 43.90
Target(s): 49.00
Current Gain/Loss: + 4.9%
Time Frame: exit prior to the May 3rd earnings report
New Positions: see below

Comments:
04/26 update: HAIN rallied to $48.00 before paring its gains to just a +1.0% advance. More conservative traders will want to seriously consider an early exit right here, especially if you're holding the may calls (current bid is $2.70, +45%). I am not suggesting new positions at this time.

current Position: long HAIN stock @ $45.05

- or -

Long May$45 call (HAIN1219E45) Entry $1.85

04/21/12 new stop loss @ 43.90
04/03/12 triggered @ 45.05

Entry on April 03 at $45.05
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 279 thousand
Listed on April 02, 2011


rue21, Inc. - RUE - close: 30.17 change: +0.31

Stop Loss: 29.10
Target(s): 33.50
Current Gain/Loss: - 0.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
04/26 update: I am growing a little worried with RUE's performance. The major indices are moving higher but RUE is stuck trading sideways. The stock "should" see a breakout back into the prevailing trend, which is up but nothing is guaranteed. Tuesday's low was $29.15. I am raising our stop loss to $29.10. I'd probably wait for a rally past $30.65 before considering new positions.

Our multi-week target is $33.50. We want to exit prior to the late May earnings report. FYI: The Point & Figure chart for RUE is bullish with a long-term $48.00 target.

(small positions)

Suggested Position: Long RUE stock @ $30.25

- or -

Long May $30 call (RUE1219E30) Entry $1.70

04/26/12 new stop loss @ 29.10
04/17/12 triggered at $30.25

Entry on April 17 at $30.25
Earnings Date 05/24/12 (unconfirmed)
Average Daily Volume = 304 thousand
Listed on April 164, 2011


ProShares UltraPro Short QQQ - SQQQ - close: 10.94 change: -0.20

Stop Loss: 10.60
Target(s): 13.25
Current Gain/Loss: - 5.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
04/26 update: This could be the end for our SQQQ trade. Another rally in tech stocks helped push the SQQQ lower to a -1.8% decline. I would suggest we exit at the open tomorrow but odds are we will see the SQQQ actually gap down under our stop loss at $10.60 tomorrow. Why another gap down? AMZN reported earnings and the stock is soaring (about +$25) after hours tonight. A big pop in AMZN will likely fuel more gains for the NASDAQ-100 and end our SQQQ trade.

I am expecting shares of the SQQQ to hit our stop at the open. If not, then I'll be surprised if this trade survives to the closing bell on Friday. I am not suggesting new positions at this time.

Remember, this is the triple inverse ETF on the QQQ so expect volatility.

current Position: Long SQQQ @ $11.60

- or -

Long May $12.00 call (SQQQ1219E12) Entry $0.73

04/26/12 odds are we will see the SQQQ hit our stop early tomorrow
04/16/12 triggered at $11.60

Entry on April 16 at $11.60
Earnings Date --/--/--
Average Daily Volume = 2.3 million
Listed on April 10, 2011


Teva Pharma - TEVA - close: 45.51 change: +0.16

Stop Loss: 44.45
Target(s): 49.50
Current Gain/Loss: unopened
Time Frame: exit prior to the mid May earnings report
New Positions: Yes, see below

Comments:
04/26 update: TEVA rallied toward resistance near $46.00 and then rolled over. We are waiting for a breakout higher. I am suggesting a trigger at $46.25 to launch positions. We'll use a stop loss at $44.45 to start. Our target is $49.50 but we will probably exit early to avoid the mid-May earnings report.

Trigger @ $46.25

Suggested Position: buy TEVA stock @ (trigger)

- or -

buy the May $45 call (TEVA1219E45)

Entry on April xx at $ xx.xx
Earnings Date 05/09/12 (unconfirmed)
Average Daily Volume = 3.3 million
Listed on April 25, 2011


BEARISH Play Updates

Barrick Gold - ABX - close: 39.94 change: -0.03

Stop Loss: 42.20
Target(s): 37.50
Current Gain/Loss: + 2.6%
Time Frame: up to the May 2nd earnings report
New Positions: Yes, see below

Comments:
04/26 update: I am surprised that ABX didn't see a bigger bounce today given the rise in gold prices. This stock was content to drift sideways and underperform the major indices. I am not suggesting new bearish positions at this time.

Our exit target is $37.50. We do not want to hold over the early May earnings report. FYI: The Point & Figure chart for ABX is bearish with a $32.00 target.

(small positions)

current Position: short ABX stock @ $41.02

- or -

Long May $40 PUT (ABX1219Q40) Entry $1.13

04/21/12 new stop loss @ 42.20

Entry on April 17 at $41.02
Earnings Date 05/02/12 (confirmed)
Average Daily Volume = 7.9 million
Listed on April 164, 2011


American Public Education - APEI - close: 35.00 change: +0.19

Stop Loss: 36.60
Target(s): 31.00
Current Gain/Loss: - 0.7%
Time Frame: up to its May 10th earnings report
New Positions: see below

Comments:
04/26 update: APEI is not seeing a lot of movement. Shares rallied up to short-term technical resistance at its 10-dma and then faded lower. While the trend is down I am not suggesting new positions given the strength in the major indices.

Earlier Comments:
The plan was to limit our risk with small positions. Our exit target is $31.00 but we do not want to hold over the May 10th earnings report. This is a higher-risk trade. Lots of investors think APEI is going lower and the most recent data listed short interest at 20% of the very small 16.8 million share float. That does raise the risk of a short squeeze. You may want to limit your exposure by trading options.

(small positions)

Suggested Position: short APEI stock @ $34.75

- or -

Long May $35 PUT (APEI1219Q35) Entry $2.10

04/23/12 new stop loss @ 36.60
04/19/12 triggered at $34.75

Entry on April 19 at $34.75
Earnings Date 05/10/12 (unconfirmed)
Average Daily Volume = 202 thousand
Listed on April 18, 2011


Consolidated Graphics - CGX - close: 39.14 change: -0.65

Stop Loss: 41.55
Target(s): 36.50
Current Gain/Loss: + 4.2%
Time Frame: up to its early May earnings report
New Positions: see below

Comments:
04/26 update: CGX continues to show relative weakness with a -1.6% drop today. I am adjusting our stop loss down to $41.55. I am not suggesting new positions at this time.

Bear in mind that we may have to exit early ahead of the early May earnings report. FYI: The Point & Figure chart for CGX is bearish with a $28.00 target.

(small positions)

current Position: short CGX stock @ $40.85

04/26/12 new stop loss @ 41.55
04/23/12 new stop loss @ 42.25
04/20/12 triggered at $40.85

Entry on April 20 at $40.85
Earnings Date 05/01/12 (unconfirmed)
Average Daily Volume = 45 thousand
Listed on April 19, 2011


Ctrip.com Intl. - CTRP - close: 21.49 change: +0.51

Stop Loss: 22.26
Target(s): 18.00
Current Gain/Loss: + 1.0%
Time Frame: exit prior to the May 16th earnings report
New Positions: see below

Comments:
04/26 update: I am throwing in the towel on our CTRP trade. Shares remain stuck inside their trading range. I am suggesting we exit positions at the opening bell tomorrow.

Earlier Comments:
Readers may want to keep their position size small or limit their risk by trading put options. The most recent data listed short interest at about 10% of the 131 million share float. That could raise the risk of a short squeeze.

current Position: short CTRP stock @ $21.70

04/26/12 prepare to exit at the open tomorrow
04/21/12 new stop loss @ 22.26
04/19/12 planned exit for the April puts: 10 cents (-84.6%)
04/18/12 prepare to exit the April $21 puts at the close tomorrow
04/12/12 new stop loss @ 22.51

Entry on April 02 at $21.70
Earnings Date 05/--/12 (unconfirmed)
Average Daily Volume = 3.6 million
Listed on March 31, 2011


First Solar, Inc. - FSLR - close: 18.31 change: +0.01

Stop Loss: 21.55
Target(s): 15.25
Current Gain/Loss: + 4.6%
Time Frame: exit prior to earnings in early May
New Positions: see below

Comments:
04/26 update: FSLR failed to truly participate in the market's rally today. Shares settled virtually unchanged on the session. I am suggesting we lower our stop loss down to $21.55. I am not suggesting new positions at this time.

Earlier Comments:
Broken support at $20.00 should be new resistance. Please note that we want to keep our position size small to limit our risk because the most recent data listed short interest at 42% of the 59.8 million share float. That does raise the risk of a short squeeze. Readers might want to use put options to really limit risk.

(small positions)

current Position: short FSLR stock @ $19.19

- or -

Long May $18 PUT (FSLR1219Q18) Entry $1.36

04/26/12 new stop loss @ 21.55

Entry on April 24 at $19.19
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 7.1 million
Listed on April 23, 2011


Hi Tech Pharmacal - HITK - close: 33.54 change: -0.21

Stop Loss: 35.05
Target(s): $30.50
Current Gain/Loss: + 2.5%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
04/26 update: The early morning bounce in HITK ran out of steam and shares underperformed with a -0.6% decline. The stock remains under resistance and a bearish trend of lower highs but I'm not suggesting new positions.

More conservative traders may want to lock in gains on a dip near $32.00. Currently we're aiming for $30.50.

current Position: short HITK stock @ $34.40

04/21/12 new stop loss @ 35.05, adjust exit target to $30.50
04/19/12 planned exit for our April put: $1.30 (-13.3%)
04/18/12 prepare to exit our April $35 puts at the close tomorrow
04/14/12 new stop loss @ 35.55
04/10/12 triggered at $34.40

Entry on April 10 at $34.40
Earnings Date 07/05/12 (unconfirmed)
Average Daily Volume = 155 thousand
Listed on April 09, 2011


ICICI Bank Ltd. - IBN - close: 32.46 change: +0.20

Stop Loss: 34.85
Target(s): 30.25
Current Gain/Loss: - 1.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
04/26 update: It was a relatively quiet day for IBN but shares eventually bounced to keep pace with the S&P 500's +0.6% gain. I am expecting IBN to rebound back toward $33.00, which should be new resistance.

Our target is $30.25. More aggressive traders could aim lower.

Suggested Position: short IBN stock @ 32.05

- or -

Long May $32 PUT (IBN1219Q32) Entry $1.32

04/23/12 triggered on gap down at $32.05, trigger was 32.75

Entry on April 23 at $32.05 (gap down)
Earnings Date --/--/-- (unconfirmed)
Average Daily Volume = 1.9 million
Listed on April 14, 2011


ChipMOS Tech. - IMOS - close: 13.53 change: +0.07

Stop Loss: 14.05
Target(s): 11.50
Current Gain/Loss: - 3.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
04/26 update: Yesterday a big rally in AAPL helped fuel gains for the tech sector and IMOS surged higher. Tomorrow it looks like AMZN is going to pop higher, which could spark more short covering in tech stocks. I suspect there is a good chance IMOS will hit our stop loss at $14.05 tomorrow. I'm not suggesting new positions at this time.

The plan was to keep our position size small to limit our risk. IMOS can be a volatile stock. FYI: The Point & Figure chart for IMOS is bearish with a $8.00 target.

(small positions)

current Position: short IMOS stock @ $13.08

- or -

Long May $12.50 PUT (IMOS1219Q12.5) Entry $0.99

04/24/12 new stop loss @ 14.05, readers may want to take profits now with our trade up +8%.

Entry on April 23 at $13.08
Earnings Date 05/14/12 (unconfirmed)
Average Daily Volume = 356 thousand
Listed on April 21, 2011


Quality Systems - QSII - close: 38.40 change: -0.05

Stop Loss: 40.25
Target(s): 34.50
Current Gain/Loss: - 0.2%
Time Frame: exit prior to the late May earnings report
New Positions: see below

Comments:
04/26 update: Our new bearish play on QSII is off to a decent start with shares not participating in the market's rally today. I would still consider new positions now or you can look for a failed rally near the 10-dma.

Earlier Comments:
I do see potential support at $36.00 and $34.00 and we are going to set our exit target at $34.50 but we plan to exit prior to the late May earnings report. Readers may want to use small positions. The most recent data listed short interest at 12% of the relatively small 39.4 million share float so that does raise the risk of a possible short squeeze.

current Position: short QSII stock @ $38.33

- or -

Long May $40 PUT (QSII1219Q40) Entry $1.90

Entry on April 26 at $38.33
Earnings Date 05/24/12 (unconfirmed)
Average Daily Volume = 476 thousand
Listed on April 25, 2011


Rovi Corp. - ROVI - close: 29.07 change: +0.12

Stop Loss: 30.25
Target(s): 26.25
Current Gain/Loss: + 0.7%
Time Frame: exit prior to the May 3rd earnings report
New Positions: see below

Comments:
04/26 update: ROVI slowly drifted higher and ended the day with a +0.4% gain and a close over its 10-dma. We only have a few days left. I am not suggesting new positions at this time.

Earlier Comments:
There is potential support near $28.00 and $26.00. We are setting our exit target at $26.25.

open positions on Monday morning

Suggested Position: short ROVI stock @ $29.27

- or -

Long MAY $30 PUT (ROVI1219Q30) Entry $2.45

04/23/12 new stop loss @ 30.25

Entry on April 16 at $29.27
Earnings Date 05/10/12 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on April 14, 2011


Red Robin Gourmet Burgers - RRGB - close: 34.90 change: +0.23

Stop Loss: 35.55
Target(s): 31.50 or 200-Ema
Current Gain/Loss: unopened
Time Frame: exit prior to the mid May earnings report
New Positions: Yes, see below

Comments:
04/26 update: It was a relatively quiet day for RRGB and shares managed to keep pace with the S&P 500's gain. I don't see any changes from my prior comments.

Currently I am suggesting a trigger to open small bearish positions at $33.75. We'll use a stop loss at $35.55 to start. Our target is $31.50 or the exponential 200-dma, whichever RRGB hits first. We do want to keep our position size small because the most recent data listed short interest at 12% of the very small 13.3 million share float. That does raise the risk of a possible short squeeze. You may want to trade the put options to limit your risk

Trigger @ $33.75

Suggested Position: short RRGB stock @ (trigger)

- or -

buy the May $35 PUT (RRGB1219Q35)

Entry on April xx at $ xx.xx
Earnings Date 05/17/12 (unconfirmed)
Average Daily Volume = 205 thousand
Listed on April 24, 2011


St. Jude Medical - STJ - close: 38.53 change: +0.33

Stop Loss: 40.05
Target(s): 34.25
Current Gain/Loss: - 2.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
04/26 update: STJ spent the session drifting higher and closed above its 10-dma. So far the stock has seen a three-day bounce. STJ should encounter resistance at its simple 150-dma near $39.00 soon. I am not suggesting new positions at this time.

Our target is $34.25. FYI: The Point & Figure chart for STJ is bearish with a $31.00 target.

current Position: short STJ stock @ $37.45

- or -

Long May $37.50 PUT (STJ1219Q37.5) Entry $1.20

04/23/12 new stop loss @ 40.05
04/23/12 triggered at $37.45

Entry on April 23 at $37.45
Earnings Date 04/18/12
Average Daily Volume = 5.1 million
Listed on April 21, 2011