Current Portfolio:

CALL Play Updates

Direct TV - DTV - close 38.47 change -0.08 stop 35.70

Target(s): 38.20, 38.50, 39.50, 41.50
Key Support/Resistance Areas: 38.60, 37.00, 36.30
Current Gain/Loss: N/A
Time Frame: Several weeks
New Positions: Waiting to be triggered

I am keeping the set-up on this trade the same and waiting for the stock to trade near its 50-day SMA prior to entering. It has to trade down there and we will be ready to pounce on the stock when it does. The 50-day SMA is currently $36.70 and it is rising but placing an order slightly above this is suggested.

Suggested Position: Buy July $37.00 CALL if DTV trades down near $36.80 which is just above its 50-day SMA, current ask $2.24, estimated ask at entry $1.40

Annotated chart:

Entry on June xx
Earnings Date 8/5/10 (unconfirmed)
Average Daily Volume: 12.3 million
Listed on 6/5/10

Qualcomm Inc - QCOM - close 35.36 change +0.33 stop 34.20

Target(s): 20-day SMA, 36.00, 36.45 (hit), 36.75, 38.00, 38.95
Key Support/Resistance Areas: 37.50, 37.00, 36.25, 35.25, 34.50
Current Gain/Loss: -12%
Time Frame: 1 to 2 weeks
New Positions: No

QCOM is finally showing some life here and is above its long term support line in the $35.00 to $35.25 area. My exit strategy remains the same. I expect QCOM to at least trade up to its 20-day SMA which is about $35.70. This should create a small winner and is good place to tighten stops to see if we can get more out the stock. I've also listed $36.00 as a possible target which near many of the stock's closing prices in late May.

Current Position: July $36.00 CALL, entry at $1.30

Annotated chart:

Entry on 6/1/2010
Earnings Date 7/21/2010 (unconfirmed)
Average Daily Volume: 26 million
Listed on 5/29/10

Quest Software - QSFT - close 19.35 change +0.59 stop 18.58

Target(s): 19.50, 20.00, 20.50, 21.00
Key Support/Resistance Areas: 18.40, 18.70, 19.36, 20-day SMA, 50-day SMA
Current Gain/Loss: -29%
Time Frame: Several weeks
New Positions: Yes

QSFT is gaining momentum and I expect it to hit our target(s) this week. I have adjusted our first target to $19.50. I can't figure out why the July $20 call option has lost money when the stock has gained in value. The delta is .41 which means that for every price move in the underlying stock the price of the option should move at a rate of 41% of the move. So if QSFT gained 50 cents the price of the option would increase by about 20 cents, or about +24% of our entry price. I suspect the volatility has been sucked out of the premium we paid. I doubt it has to do with time decay because there are still 5 weeks left until July expiry. In any event, if the volatility is decreasing in the stock it should bode well for another push higher this week. I suggest selling into further strength this week or tighten stops to protect any profits. A tighter stop could be placed $18.90.

Current Position: July $20.00 CALL, entry at $0.85

Annotated chart:

Entry on June 7, 2010
Earnings Date 8/10/10 (unconfirmed)
Average Daily Volume: 1.9 million
Listed on 6/2/10

PUT Play Updates

Freeport McMoRan Copper & Gold - FCX - close 64.93 change +0.57 stop 68.80

Target(s): 58.30, 55.20, 52.10
Key Support/Resistance Areas: 66.00, 65.00, 64.00, 58.00, 55.00, 52.00
Current Gain/Loss: -4.2%
Time Frame: 1 weeks
New Positions: Yes

Why We Like It:
FCX traded up to our entry at $65.00. There is formidable resistance in the $65 to $66 area that I think may act as a stone wall for FCX to continue its down move. The stock's 20-day SMA is just overhead along with the a downtrend line that has been intact since the April highs. I view this trade as aggressive and quick so proper position size should be used to limit risk. I am also choosing an out of the money option to limit capital at risk.

Current Position: July $60.00 PUT, entry was at $2.38

Annotated chart:

Entry on June xx
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 19 million
Listed on June 10, 2010

SPDR S&P 500 ETF - SPY - close 109.68 change +0.53 stop 112.10

Target(s): 107.50, 105.00, 103.50, 102.25
Key Support/Resistance Areas: 111.00, 110.00, 109.00, 108.00
Current Gain/Loss: -9.3%
Time Frame: 1 to 2 weeks
New Positions: Yes

We are now long July SPY $109 puts. The stock closed above its 20-day SMA which was providing resistance most of the day on Friday up until the late afternoon surge higher. There is still plenty of resistance overhead at 110.00 and 111.00 which is the 200-day SMA. I have listed a another target of 107.50 for readers looking for a quicker exit. And I have adjusted the stop up 60 cents to account for a possible gap fill if SPY makes it through 111.00.

Current Position: July $109.00 PUTS, entry was at $3.75

Annotated chart:

Entry on June xx
Earnings N/A (unconfirmed)
Average Daily Volume: 340 million
Listed on June 10, 2010

Toronto Dominion Bank - TD - close 68.20 change +0.18 stop 69.90

Target(s): 65.60, 64.50, 62.20, 60.50
Key Support/Resistance Areas: 69.15, 68.00, 66.50, 65.60, 64.50, 63.00
Current Gain/Loss: -23.6%
Time Frame: 1 to 2 weeks
New Positions: Yes, but preferably on bounces

TD was in the in the red most of the day until the late afternoon surge. The stock is sitting near its 20-day and 100-day SMA's and two downtrend lines. I am expect these to hold and the stock to move lower with the broader market this week. I've listed a higher target of $65.60 which is just above the stocks lowest close since February. This is logical place to tighten stops.

Current Position: July $65.00 PUT, entry was at $1.90

Annotated chart:

Entry on June 9, 2010
Earnings 9/2/2010 (unconfirmed)
Average Daily Volume: 1.4 million
Listed on June 8, 2010


Petroleo Brasileiro SA - PBR - close 38.32 change -0.25 stop 37.65

Target(s): 38.50 (HIT), 39.25, 39.95
Key Support/Resistance Areas: 37.45, 36.25
Final Gain/Loss: +23.4%
Time Frame: 1 week
New Positions: Closed

We closed PBR when at our target of $38.50 which was also hit on Thursday. We are flat the position for a +23.4% gain. For readers who still have positions the above targets, stop, and support/resistance areas can be used as a guide to protect profits. PBR may have some room to run here but I would rather take the profit than be surprised with a gap down in the market that could wipe out profits.

Closed Position: July $37.00 CALL at $2.95, entry was at $2.39

Annotated chart:

Entry on June 9, 2010
Earnings Date 8/13/10 (unconfirmed)
Average Daily Volume: 19.6 million
Listed on 6/8/10


Altera Corp - ALTR - close 24.38 change +0.81 stop 24.25

Target(s): 23.15, 22.60
Key Support/Resistance Areas: 24.15, 23.80, 23.15
Final Gain/Loss: -11.7% Time Frame: 1 to 2 weeks

The head and shoulders pattern on ALTR failed and the stock ran right up through our stop. So we are right out of the trade as instructed in the play release. Considering the immense strength in ALTR on Friday morning positions really should not have been opened. It was apparent the pattern was going to fail in the first 30 minutes of trading. For any readers who have positions I suggest placing a stop above the opening range on Monday and see if ALTR reverses. There is resistance right where the stock closed and it could be forming a double top with the highs from 6/3 and 6/4 and is also approaching its 50-day SMA from below. I actually like the short set-up here with a tight stop at $23.75 which is above the 50-day SMA. In hindsight we probably should have waited for ALTR to reach its 50-day SMA and then entered a short position but I saw the head shoulders pattern and was anticipating a move lower off of the right shoulder. I've provided an hourly chart for illustration.

Closed Position: July $25.00 PUTS @ $1.50, entry was at $1.70

Annotated chart:

Entry on June 11, 2010
Earnings 7/20/2010 (unconfirmed)
Average Daily Volume: 9.7 million
Listed on June 10, 2010