Current Portfolio:

CALL Play Updates

Direct TV - DTV - close 39.33 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

We are patiently waiting for DTV to come to us. If it doesn't cooperate soon I will be removing the trade from the portfolio. My comments from last night remain the same. DTV has ran away from us a bit here as we have waited 8 trading days and still haven't gotten filled. $37.20 is a key support area and the 50-day SMA is rising towards this level everyday. Let's use this as our trigger to enter positions. Essentially we are playing for a bounce near the stock's 50-day SMA which it has not touched since the flash crash. The stock also has two trend lines underneath our entry which should provide further support if we get filled. The 50-day SMA is currently $36.87 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 $37.20 which is just above its 50-day SMA, current ask $2.78, estimated ask at entry $1.40

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

Ormat Technologies - ORA - close 29.79 change +0.13 stop 27.25

Target(s): 30.45, 31.80
Key Support/Resistance Areas: 32.00, 30.60, 29.00, 27.50
Current Gain/Loss: +5%
Time Frame: Several weeks
New Positions: Yes

Why We Like It:
ORA traded down to our entry at $29.25 late this morning so we long July $30.00 calls at $1.00. The stock closed above its 50-day SMA and made new daily highs. All of this is good but there is some resistance overhead so there could be a pullback. The broader market strength or weakness is sure to influence the price of the stock. Our initial target is $30.45 with our more aggressive 2nd target at $31.80. I'll leave my comments from the play release. ORA has broken through a long term primary downtrend line and a short term secondary downtrend line. The stock broke through and closed above a resistance area near $29.00. ORA is essentially a utility that is involved in the alternative energy business (i.e. geothermal) and may be in the right place at the right time with a push from the White House in this sector. I would like to see a retracement of some of today's gains and use $29.25 as an ideal entry point to initiate long positions. The stock closed near its 50-day SMA so I expect a pullback before a larger move to the upside. Our stop will be $27.25 which will give this trade some room to work.

Current Position: July $30.00 CALL, entry was at $1.00

Entry on June 16, 2010
Earnings Date 8/4/10 (unconfirmed)
Average Daily Volume: 345,000
Listed on 6/15/10

PUT Play Updates

Freeport McMoRan Copper & Gold - FCX - close 67.03 change -0.02 stop 68.80

Target(s): 65.15, 64.00, 63.10, 61.50, 58.30
Key Support/Resistance Areas: 66.00, 65.00, 64.00, 58.00, 55.00, 52.00
Current Gain/Loss: -40%
Time Frame: 1 week
New Positions: No

FCX was weak again this morning but buyers stepped in and the stock closed at about breakeven on the day. The stock traded down to our key support level at $66.00 and then reversed higher. On the intraday charts FCX has been in an uptrend the past 5 days and on the 30 minute chart FCX has bounced off of the 50-period SMA (currently $66.66) as support on the way up. This level needs to break convincingly to get the stock moving lower, and if it does I think we could see $65.00 relatively quick. Fundamentally, demand for copper should be weakening as evidenced by housing starts in the US and other countries like Australia, which came in overnight at 4.3% Q/Q compared to estimates of 7.0%. This has been a frustrating trade and I think it is prudent to consider exiting positions to preserve capital. As such, I have added $65.15 and $64.50 as additional targets. The estimated price of our options at these targets is about $1.75 and $1.90, respectively. These are good levels to either take profits or tighten stops to see if we can get more out of the trade. When FCX gets moving the moves tend to be big. On the daily charts, the stock remains in a downtrend and has made a series of lower highs and lower lows, but it has also stubbornly refused to give up any of the recent gains. Readers may want to consider placing a sell limit order based on the option (as opposed to the stock price) to simply exit positions. 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

Entry on June 11, 2010
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 19 million
Listed on June 10, 2010


Home Depot - HD - close 32.14 change -0.12 stop 33.65

Target(s): 31.75 (hit), 31.35, 30.10
Key Support/Resistance Areas: 33.25, 32.90, 32.30, 31.25, 29.95
Current Gain/Loss: +30.59%
Time Frame: 1 to 2 weeks
New Positions: Closed

HD pulled a repeat of yesterday. The stock hit our target of $31.75 in early trading before reversing higher. We are flat the position for a +30.59% gain. The stock has still not broken previous days highs since last Friday while the market has showed strength. The stock remains below its downtrend line that started on May 18th and if the market turns down from here HD should be a big decliner. If that happens I think HD will retest its recent lows and possibly even make a trip down to its 200-day SMA. But protecting gains is the name of the game in this volatile environment. There is a formidable resistance and congestion range from $32.15 to $32.90. A tighter stop could be placed at $33.05 which is above the 20-day SMA and would get you out of the trade if HD begins to fill the gap lower from 6/3 to 6/4.

Closed Position: July $32.00 PUTS @ $1.11, entry was at $0.85

Annotated chart:

Entry on June 14, 2010
Earnings 8/18/2010 (unconfirmed)
Average Daily Volume: 23 million
Listed on June 12, 2010