CNOOC Ltd. - CEO - close: 167.19 chg: -3.80 stop: 164.95
CEO stumbled after being hit with a one-two punch today. First of all a $4 drop in crude oil tends to take the wind out of the energy stocks. Second, CEO announced it was buying Norwegian oil services company, Awilco Offshore, for $2.5 billion. Shares of CEO plunged toward support near $165.00 and closed under its 200-dma, which is bearish. The MACD is rolling over again and doesn't look healthy. The technical indicators on CEO are growing worse so we're not suggesting new positions at this time.
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: 25.78 chg: +0.98 stop:
The VIX rallied to new three-month highs. The trend is definitely up. We don't see any changes from our weekend comments. 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.
Picked on June 30 at $ 23.95
Amazon.com - AMZN - close: 72.49 chg: +0.49 stop: 73.85
AMZN did out perform the market today with a 0.6% gain but the trading action looks bearish. The stock failed at the top of its current trading range. We're still waiting for a breakdown. We're suggesting a trigger to buy puts at $69.75. If triggered our target is $62.50. The Point & Figure chart is already bearish with a $63 target. We do not want to hold over the late July earnings report.
Picked on July xx at $ xx.xx <-- see TRIGGER
(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: 87.74 chg: + 1.87 stop: n/a
Many of the coal stocks tried to bounce today after one analyst firm stated their opinion that the recent pull back was a buying opportunity. The bounce appeared to fail across the board. 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. 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: 96.82 chg: -1.81 stop: n/a
A $4 plunge in crude oil futures pressured the oil stocks lower. Shares of CVX lost 1.8% and the afternoon bounce failed. We are not suggesting new positions at this time. 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
iShares Brazil - EWZ - cls: 81.85 chg: -1.21 stop: n/a
The EWZ Bounced around the $81.25-84.00 zone giving us plenty of opportunities to open strangle positions. Our suggested entry range was the $83.50-82.00 region. The options we suggested were the August $90 calls (EWZ-HR) and the August $75 puts (EWQ-TO). Our estimated cost is $3.95 We want to sell if either option hits $5.90.
Picked on July 03 at $ 83.06
Garmin Ltd. - GRMN - close: 42.59 chg: +0.64 stop: n/a
GRMN continues to show relative strength by holding on to the $42.00 level - for now. We have just under 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
Internet Holders - HHH - cls: 51.63 change: +1.38 stop: n/a
The HHH Internet holders out performed today with a 2.6% gain thanks largely to a 12% rally in YHOO. There was a dip back to the $50.54 region. Technically the play is not open yet. Our suggested entry point was the $50.50-49.50 zone. I suspect we'll get an entry point tomorrow. The options we suggested were the August $55 calls (HHH-HK) and the August $45 puts (HHH-TI). Our estimated cost is $1.60 We want to sell if either option hits $2.45.
Picked on July 03 at $ 50.25
Holly Corp. - HOC - close: 33.50 chg: -1.15 stop: n/a
Wow! HOC just can't win. Rising oil prices, which pressure refiner's margins, have been pushing the stock price lower. Yet today oil pull back sharply but HOC failed to bounce. The stock lost another 1.4% and the put options are close to hitting our target. The July $35 puts hit $2.65 today. 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: 40.19 chg: +0.29 stop: n/a
No change from our weekend comments. Readers are going to want to consider an early exit. 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
MarketVectors Agribusiness- MOO - close: 57.55 chg: +0.30 stop: n/a
The MOO provided a minor bounce today. We are suggesting readers open strangle positions in the $57.00-58.00 zone. The options we suggested were the August $62 calls (MYV-HJ) and the August $50 puts (MOO-TX). Our estimated cost is $2.10. We want to sell if either option hits $3.15.
Picked on July 03 at $ 57.25
United States Oil - USO - cls: 114.95 chg: -1.87 stop: n/a
Talk of waning supply concerns and news that Iran might become more cooperative was enough to send crude oil futures to a $4 loss. The USO reacted with a 1.7% loss. We have less than 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