Autozone - AZO - cls: 119.66 change: -0.50 stop: 122.26
AZO under performed the broader market on Tuesday. The rebound failed at $121 and shares closed back under the $120 level. This looks like a new entry point for puts but given the market strength we'd rather wait for a new decline under $118.50 in AZO before initiating new positions. We do have a relatively tight stop loss on this play and more aggressive traders may want to give AZO more room to maneuver. Our target is the $112.00-110.00 range. FYI: The P&F chart is still bullish for now.
Picked on October 21 at $118.67
Chipotle Mexican Grill - CMG - cls: 127.13 chg: +2.19 stop: 128.26
The situation does not look good for the bears or put holders in CMG. The stock has continued to rebound and traders bought the intraday dip near $124. CMG is poised to breakout over resistance near $128 and make a run at its highs near $134. We are not suggesting new positions and readers will want to strongly consider an early exit now to cut their losses. If CMG were to turn around our target is the $112-110 range. We do not want to hold over the October 30th earnings report. FYI: This should be considered an aggressive play since we're suggesting puts on a stock that still has a relatively bullish trend. Plus, the options are looking a little expensive.
Picked on October 21 at $123.40
Tsakos Energy - TNP - cls: 68.44 change: +0.86 stop: 72.16
We would expect the oversold bounce in TNP to continue at least briefly. Wait and watch for the rebound to failed near resistance in the $69.00-70.00 zone and use it as a new entry point for puts. Our target is the $65.10-63.65 zone. Almost all of its technical indicators on both the daily and weekly charts are bearish or they are turning bearish.
Picked on October 22 at $ 67.67 *gap down
Sepracor Inc. - SEPR - cls: 24.03 change: +1.02 stop: 25.05
SEPR out performed its peers in the drug sector and the market with a 4.4% bounce. Volume was very strong on the rebound and that is a warning sign for the bears! More aggressive traders may want to widen their stop loss and place theirs stop above the 10-dma near $25.28. We're not suggesting new positions at this time. Our target is the $20.25-20.00 zone. We do not want to hold over the October 30th earnings report.
Picked on October 21 at $ 22.91 *gap down
(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)
Express Scripts - ESRX - cls: 58.40 chg: -0.51 stop: n/a
ESRX is still under performing the market but traders were buying the dip near $58.00 today. Tomorrow is our last day to open positions ahead of the company's earnings report, which comes out after the closing bell on Wednesday. The $59.00-61.00 zone is where we would want to open positions. The options we suggested for a November strangle were the November $65 calls (XTQ-KM) and the November $55 puts (XTQ-WK). Our estimated cost was $1.95. We want to sell if either option hits $3.50 or higher.
Picked on October 21 at $ 59.65
Google Inc. - GOOG - cls: 675.77 chg: +25.02 stop: n/a
Our speculative, high-risk put and put spread strategies on GOOG and its earnings report have been a bust. The stock continues to rally and shares added another 3.8% today. We're not dropping the stock from the newsletter just yet and here's why. First of all GOOG is now trading near the top edge of its six-week rising channel. It should see some sort of consolidation down toward the bottom of its channel sooner rather than later and when that occurs the put values should recover a little bit. Second, GOOG is holding its analyst day tomorrow. Whenever there is an event like this there is a chance for something to be said that could move the shares either direction. FYI: Speaking of the six-week channel readers could wait and watch for a dip and bounce near $640 as a potential entry point for calls.
Previously Suggested Options:
Our second strategy was the speculative put spread. We suggested buying the November $580 put (GOO-WP) and selling the November $530 put (GOP-WW).
*This isn't a strangle play but given the spread in strategy number two we decided to stick it in the strangles section of the newsletter.
Picked on October 16 at $616.00
Intl. Bus. Mach. - IBM - cls: 114.68 chg: +1.31 stop: n/a
IBM continues to bounce and shares should be testing resistance near $115 and its 50-dma soon. We are not suggesting new strangle positions at this time. Our November strangle suggested the November $125 call (IBM-KE) and the November $110 put (IBM-WB). Our estimated cost was $3.00. We wanted to sell if either option hits $6.00.
Picked on October 15 at $118.03
Garmin Ltd. - GRMN - cls: 120.52 change: +5.34 stop: 117.01
We've been stopped out of GRMN. The stock has seen a huge whipsaw in the last few sessions. Friday's bearish reversal pattern was a fake. We warned readers following Monday's big bounce. Today's session saw GRMN actually gap open higher at $117.53, above resistance near $117. The stock is ready to challenge its highs near $123 soon.
Picked on October 21 at $110.10
Wynn Resorts - WYNN - cls: 158.50 chg: +4.26 stop: 157.55
We warned readers that WYNN was a volatile stock and we've been whipsawed out of it. Friday's sell signal proved to be a head fake and shares have screamed higher from the Monday low of $147. The stock hit our stop loss today at $157.55. If WYNN can trade over $160.00 readers will want to reconsider and think about bullish positions.
Picked on October 22 at $147.53 *gap down
Amazon.com - AMZN - cls: 100.82 chg: +9.53 stop: n/a
Target achieved. AAPL's better than expected earnings last night sparked some euphoria in AMZN ahead of AMZN's earnings report. Shares of AMZN gapped open at $95.28 and rallied to an intraday high of $101.09 before closing with a 10.4% gain. Volume was huge at 41.6 million shares trading versus the normal 6.3 million shares. We had suggested a strangle on AMZN to hold over the company's earnings report, which came out tonight. However, today's extreme move higher pushed the call side of our strangle to our target. The November $100 calls (ZQN-KY) hit our target at $8.50. Our estimated cost was $5.51. So now what? AMZN reported earnings. They beat estimates by a penny and beat the revenue estimates. Yet the stock is seeing a violent sell-off in after hours trading. AMZN was trading back around $90 in the wake of its earnings report. We don't know how much of this sell the news reaction will carry over into tomorrow's trading but we would hold on to the put side of our strangle (November $80 puts ZQN-WP) on the small chance that AMZN breaks support in the $88-90 zone and heads toward $80.
Picked on October 21 at $ 89.76