CNOOC Ltd. - CEO - close: 170.99 chg: -3.92 stop: 164.95
Hopefully no one was surprised to see the weakness in CEO on Thursday. We warned readers not to be fooled by the stock's strength the previous session. As expected the stock dipped and retested the 200-dma. CEO's bounce from its lows is another bullish entry point to buy calls. More conservative traders may want to raise their stop loss toward Thursday's low at $167.18. Remember, trading CEO tends to be a higher-risk play. The stock is traded as an ADR on the NYSE and shares gap open, up or down, almost every morning as it adjusts to trading back home in China. This is also a higher risk play because the spreads on the options can be abnormally wide and that immediately puts us at a disadvantage. If you can handle the volatility this might be a play. We have multiple targets. Our first target is $179.50. Our second target is $184.50. Finally, our very aggressive target is $195.00. July options are available but we would prefer August calls.
Picked on July 01 at $171.36
CBOE Volatility Index - VIX - close: 24.80 chg: -1.12 stop:
The VIX pulled back on Thursday but the trend remains bullish. This is a very speculative play but the dip looks like another entry point. Essentially this play is a bet that the market will see a capitulation-selling event that will push the VIX to 30 or higher. There are only two weeks left for July options so we would suggest the August options. We were listing two targets. One target is $29.50 and a second one at $34.00.
BUY CALL AUG 22.50 VIX-HX open interest=15660 current ask $3.70
Picked on June 30 at $ 23.95
(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.)
Alpha Nat. Res. - ANR - close: 85.87 chg: - 1.75 stop: n/a
It was another volatile session for ANR. The stock plunged to $80.40 before bouncing. Yet the rebound stalled under the $90.00 level and reversed lower again. We are not suggesting new strangle positions at this time. We only have two weeks left for July options. If you're thinking about backing out and trying to salvage some capital then this is probably the time to consider it. With just two weeks to go the time erosion in our options is going to get worse. You could probably exit now for 45% to 50% of our estimated cost. This is a higher-risk strangle play with the options so expensive. The options we suggested were the July $105 calls (ANR-GA) and the July $85 puts (ANR-SQ). Our estimated cost was $9.40. We want to sell if either option hits $14.50.
Picked on June 15 at $ 94.25
Chevron - CVX - close: 98.63 chg: +1.21 stop: n/a
CVX continues to bounce sideways. We would still consider new positions in the $99.00-101.00 zone. The options we suggested were the August $110 calls (CVX-HB) and the August $90 puts (CVX-TR). Our estimated cost is $2.20 (based on June 30th prices we needed 2 calls per 1 put). We want to sell if the puts $3.85 or if the calls hit $1.90. More aggressive traders may want to aim higher.
Picked on June 30 at $ 99.13
Garmin Ltd. - GRMN - close: 41.95 chg: -0.72 stop: n/a
GRMN is still trading sideways and we don't know what it's going to take to see a breakout from this range. We have two weeks left before July options expire. More conservative traders may want to exit early. We're not suggesting new positions at this time. The options we listed were the July $50 calls (GQR-GJ) and the July $40 puts (GQR-SH). Our estimated cost was $2.55. We want to sell if either option hits $ 4.75 or higher.
Picked on June 15 at $ 44.91
Holly Corp. - HOC - close: 33.50 chg: -1.15 stop: n/a
HOC continues to sink. Shares lost another 3.3% on Thursday. We only have two weeks left for July options. More conservative traders may want to exit early right now because any significant bounce will kill the put values. The July $35 puts were trading at $2.30bid/$2.45ask. We're not suggesting new positions at this time. The options we listed were the July $45 calls (HOC-GI) and the July $35 puts (HOC-SG). Our estimated cost was $2.00. We want to sell if either option hits $ 3.00 or higher.
Picked on June 15 at $ 41.25
KLA-Tencor - KLAC - close: 39.90 chg: -0.41 stop: n/a
KLAC has been a terrible performer for us. The stock has traded sideways for two weeks. The intraday trading on Thursday suggests that the stock wants to go lower but on a holiday-shortened, low-volume day I wouldn't trust it. We are not suggesting new positions at this time. We have two weeks left before July options expire. We listed two different strangles on KLAC.
KLAC Strangle #2) The options we listed were the July $45.00 calls (KCQ-GI) and the July $35.00 puts (KCQ-SG). Our estimated cost is $0.70. We want to sell if either option hits $1.50.
Picked on June 22 at $ 40.07
United States Oil - USO - cls: 116.82 chg: -0.02 stop: n/a
The rally in crude oil took a day off on Thursday but the trend remains a bullish one. We only have two weeks left before July options expire and we need to see a bigger move in oil and the USO if these strangles are going to pay off! We are not suggesting new positions at this time. We suggested two different strangles. The strangle with the wider strikes costs less but has higher risk.
USO Strangle #1) The options we listed were the July $115 calls (IYS-GK) and the July $105 puts (IYS-SA). Our estimated cost is $7.10 We want to sell if either option hits $9.75.
USO Strangle #2) The options we listed were the July $120 calls (QSO-GP) and the July $100 puts (IYS-SV). Our estimated cost is $4.10. We want to sell if either option hits $6.50.
Picked on June 22 at $109.14
Deere & Co. - DE - close: 68.45 change: -1.80 stop: 69.95
Wednesday's failed rally in DE turned into a bearish breakdown under support on Thursday. Shares quickly traded below $70.00 support and hit our stop loss at $69.95. This move is very bearish. The $70.00 level has been support since October and November 2007.
Picked on July 01 at $ 73.42 /stopped out $69.95
DIAMONDS - DIA - close: 113.05 change: +0.90 stop: 111.69
The DIA gapped open higher this morning but the initial strength failed and shares slipped to a new low of $111.48. That was enough to hit our stop loss at $111.69 and close the play. Markets don't move in a straight line for very long so look for a bounce eventually.
Picked on July 01 at $113.77 /stopped out 111.69
Murphy Oil - MUR - close: 94.76 chg: -0.37 stop: 93.95
Thursday proved to be another ugly day for MUR. The stock continued its sell-off from Wednesday and dipped to $91.73. This move hit our stop at $93.95. Traders did buy the dip near its rising 50-dma and the bottom of its bullish channel but the rebound was fading again into the closing bell. MUR had already exceeded our early target near $100.
Picked on June 29 at $ 96.26 /stopped out 93.95/1st target hit
S&P SPDRs - SPY - close: 126.31 chg: +0.13 stop: 125.85
Thursday's early morning market strength faded quickly and the SPY dipped to $124.99. The rebound was pretty anemic but stocks will bounce eventually. The SPY hit our stop loss at $125.85 closing the play.
Picked on July 01 at $128.28 /stopped out 125.85
Wynn Resorts - WYNN - close: 78.94 chg: -0.32 stop: 76.95
WYNN has continued to disappoint. We never argued about the longer-term implications of the economy and a struggling consumer would have on gambling stocks. Our plan was to try and capture an oversold bounce from support, which has failed to materialize. The stock hit our stop loss at $76.95.
Picked on June 30 at $ 82.10 /stopped out 76.95