Cisco Systems | Momentum Stock Options Trading Alerts and Option Picks Blog

Blogs Directory

EatonWeb Blog Directory

Finance Seek Directory

Trade Updates

Sunday, August 9th, 2009

11:35pm (EST)

Bank of America (BAC, $16.42, down $0.28)

November 15 calls (BYOKO, $2.60, down $0.27)

Entry Price: $1.50 (6/12/09)
Exit Price: $3.00
Return: 100%
Stop: CLOSED

Action: These calls hit $3.20 on Friday and I had raised our exit target Thursday night to $3.00. BofA traded to a high of $17.14 and we were stopped out on the way back down. Our next step is to see how BofA acts this week.

Now, here is where I want to talk about “rolling” out your positions. Let’s say you had bought 10 contracts for $1,500 back on June 12th which is when the trade was initiated. That gives you the luxury of taking a chance on some cheaper out-of-the-money calls.

The November 17.50 calls (BYOKZ, $1.40, down $0.16) and the November 20 calls (BYOKT, $0.66, down $0.12) could be used as a replacement for the 15′s. Target $1.25 as an entry price for the 17.50′s but they could be considered a buy up to $1.50if BofA runs again this week. For the 20′s set a limit price of 55 cents and don’t pay no more than 75 cents.

If your profits were $1,500 on 10 contracts for the original trade then you made a 100% return. You would be risking half of that if you bought 10 contracts of the 20′s. It would cost you $750 (75 cents x 10 contracts) and would give you the assurance that no matter what happens you still would be up 50% from your original investment. That means you could ride these things into the ground and they could expire worthless and you still netted 50%.

For you new subscribers, if you take this trade, then there is a chance BofA retreats and never touches $20. Then you would risk losing ALL of you capital if you don’t have stops in place. Having said that, set stops at half of your entry price. The stock has had a huge run over the last 10 trading days so you could also do just “half” positions. That means if you normally buy 10 contracts, buy 5. If you normally do 20 contracts, go with 10.

Cisco Systems (CSCO, $22.12, down $0.12)

October 20 calls (CYQJD, $2.64, down $0.13)

Entry Price: $1.50 (6/2/09)
Exit Price: $3.00 (8/4/09 1/2 the trade was closed)
Return: 100%
Stop: $2.50

Action: The call options traded to a high of $3.05 when Cisco hit $22.74 but faded as the day wore on. The break above $22.50 was good on a technical basis and that clears the way for a test of $24. I know I have been calling for $25 but the charts are saying if we clear this area, $24 would be the next hurdle.

You also could have closed the other half of this trade once the calls hit $3.00 on Friday but the stop protects our profits while waiting to see what Cisco does from here.

Visa (V, $69.17, up $0.52)

August 70 calls (VEHHN, $1.20, up $0.10)

Entry Price: $1.60 (7/27/09)
Exit Price: $3.20
Return: -25%
Stop: 80 cents

Action: Visa is another stock that is running right against resistance and $70 is the key this week. Otherwise, these calls will start to lose some serious “time premium” and they are still technically out-of-the-money.

Imax (IMAX, $9.35, down $0.05)

September 7.50 calls (IMQIU, $1.90, down $0.10)

Entry Price: $1.90 (8/4/09)
Exit Price: $3.00
Return: 0%
Stop: $1.50

Action: These call options are right at entry level prices and it will be interesting to see if Imax can keep it rolling. The company reported its first profit in 3 years and the shares made it above $10 after they announced earnings. It would be nice to see a few Wall Street boys come out with “upgrades” but Imax has the pieces in place to make a ton of cash.

Another trade I would like to add to the mix is the March 2010 12.50 calls (IMQCV, $0.50). These options do not expire until March 19th 2010. Folks, that is 8 months away. I’m going to run some quick figures by you and you will see why buying 10 contracts at 50 cents ($500) could pay off big time when March rolls around. If Imax is at $15, these call options are worth $2.50 each or $2,500 minimum. Since Imax’s slogan is “Think Big”, then if the stock is at $20, these calls are worth $7.50 or $7,500. $500 to $7,500 is a “15-bagger” as the great Peter Lynch would say…

PowerShares QQQ’s (QQQQ, $39.88, up $0.50).

August 40 calls (QQQHN, $0.63, up $0.12)

Entry Price: $0.65 (8/7/09)
Exit Price: $1.30
Return: -2%
Stop: 30 cents

Action: This was a trade that was added on Friday and the futures are mixed at 11:20pm. Dow futures are up 11, S&P 500 futures are up 1 while the Nasdaq futures are down 1. I will be back in the morning with the earnings outlook and what to watch for this week.

Rick Rouse
Rick@MomentumOptionsTrading.com

Tags: Bank of America, Cisco Systems, Imax, PowerShares QQQ
Posted in Entertainment Stocks, Option Trades, Strategies, Trading Tips | No Comments »

Futures Pointing Towards Big Open

Monday, August 3rd, 2009

9:00am (EST)

Futures are sharply higher this morning as broad gains in the overseas markets have helped put Wall Street in a buying mood this morning. Ahead of the bell, the Dow futures are up 78, to 9,205. The S&P 500 futures are up 9, to 994, while the Nasdaq 100 index futures are up 19, to 1,621.

Ford (F, $8.00) reports July auto sales at 11am this morning. Surging demand from the “cash for clunkers” program has helped lift the company to its first monthly auto sales increase in two years. For those of you who have just signed on, we are long Ford and in pre-merket trading the stock is up 52 cents to $8.52. The December and August call options we are following should get a nice pop at the open.

Earnings are still coming in and the big one this week will be Cisco Systems (CSCO, $$22.01). I’ve been saying the bulls have been looking for a catalyst and this could be one but all eyes will be on Friday’s jobs report. As far as corporate earnings, here is a list of the companies reporting this week:

Monday: Anadarko Petroleum (APC, $48.20), Carmike Cinemas (CKEC, $9.50), Chesapeake Energy (CK, $21.44), Clorox (CLX, $61.01), FirstEnergy (FE, $41.20), Humana (HUM, $32.85), Loews (L, $30.03), Pulte Homes (PHM, $11.37) and Tyson Foods (TSN, $11.43).

Tuesday: Allegheny Energy (AYE, $25.21), Boston Beer Company (SAM, $31.19), Cephalon (CEPH, $58.65), Coinstar (CSTR, $33.23), Diebold (DBD, $27.72), Electronic Arts (ERTS, $21.47), HealthSpring (HS, $12.63), IntercontinentalExchange (ICE, $94.06), Jack in the Box (JACK, $21.10), Kraft Foods (KFT, $28.34), Onyx Pharmaceuticals (ONXX, $35.92), Stanley (SXE, $30.74) and ValueClick (VCLK, $11.50).

Wednesday: 99 Cents Only Stores (NDN, $14.65), Agrium (AGU, $46.19), AmeriCredit (ACF, $15.69), Blackboard (BBBB, $33.97), Cisco Systems (CSC), $22.01), Devon Energy (DVn, $58.09), Foster Wheeler (FWLT, $23.10), Healthsouth (HLS, $14.40), Nationwide Health Properties (NHP, $29.02), Owens Corning (OC, $18.38), Procter & Gamble (PG, $55.51), Prudential Financial (PRU, $44.27), Sunoco (SUN, $24.69) and Transocean (RIG, $79.54).

Thursday: Alliant Energy (LNT, $26.16), American Italian Pasta (AIPC, $31.46), Beazer Homes (BZH, $3.22), Blue Nile (NILE, $46.23), California Pizza Kitchen (CPKI, $16.50), Dollar Tree Stores (DLTR, $46.12), Emulex ($9.13), K-Swiss (KSWS, $10.84), Public Storage (PSA, $72.57), Speedway Motorsports (TRK, $15.96) and VeriSign (VRSN, $20.44).

Friday: Cimarex Energy (XEC, $35.78), Edison International (EIX, $32.32), LifePoint Hospitals (LPNT, $27.66), Mirant (MIR, $18.06) and Sun Communities (SUI, $15.30).

Rick@MomentumOptionsTrading.com

Tags: Cisco Systems, Ford
Posted in Market Analysis, Option Trades | No Comments »

Trade Updates

Thursday, July 30th, 2009

11:15pm (EST)

Ford (F, $7.39, up $0.27)

December 6 calls (FLI, $1.85, up $0.20)

Entry Price: $1.25 (5/18/09)
Exit Price: $2.50
Return: 48%
Stop: $1.45

December 7 calls (FLJ, $1.20, up $0.13)

Entry Price: $1.00 (5/18/09)
Exit Price: $1.50-$2.00
Return: 20%
Stop: 75 cents, raise to $1.00

Action: Another new 52-week high for Ford. Nothing else I can add here.

Cisco Systems (CSCO, $21.98, up $0.26)

October 20 calls (CYQJD, $2.55, up $0.10)

Entry Price: $1.50 (6/2/09)
Exit Price: $3.00
Return: 70%
Stop: $2.00

Action: The stock hit a high of $22.40 and the call options traded as high as $2.92 which was a stone’s throw away from our exit target. Tech remains strong and we’ve been in this trade for 2 months now. It is starting to pay dividends and it wouldn’t have been a bad idea to close half the trade up at those levels. That makes it a risk-free trade from here on out.

Bank of America (BAC, $13.97, up $0.45)

November 15 calls (BYOKO, $1.26, up $0.11)

Entry Price: $1.50 (6/12/09)
Exit Price: $2.25
Return: -17%
Stop: If the stock falls below $11, close the position.

Action: Shares broke $14 today and you gotta love the action in BofA this week.

IBM (IBM, $117.86, up $0.60)

August 105 calls (IBMHA, $13.00, up $1.20)

Entry Price: $3.40 (7/14/09)
Exit Price: $12.00 (7/24/09 1/2 the trade was closed)
Return: 253%
Stop: $11.00, raise to $12

August 115 calls (IBMHC, $4.00, up $0.50)

Entry Price: $1.05 (7/16/09)
Exit Price: $2.00 (7/24/09 1/2 the trade was closed, other half sold at $3.25 yesterday)
Return: 245% together
Stop: CLOSED

Action: We were taken out of the 115’s on Wednesday and we have raised the stop on the 105’s call options. Yeah, the 115’s traded as high as $5.13…

Cerner (CERN, $65.57, up $0.44)

August 70 calls (CQNHN, $0.75, down $0.60)

Entry Price: $1.30 (7/27/09)
Exit Price: $2.20
Return: -42%
Stop: Lifted

Action: The calls opened at 25 cents and I said to “play the rebound” meaning we knew the stop was going to get hit and we knew this was an earnings trade. The options have another 3 weeks before they expire.

Microsoft (MSFT, $23.81, up $0.01)

August 23 calls (MSQHQ, $1.07, down $0.06)

Entry Price: $0.78 (7/27/09)
Exit Price: $1.60
Return: 99%
Stop: CLOSED

Action: I’ve been talking all week about this being a “short-term” trade and how we were going to be out by Friday. The exit price was $1.60 and the calls hit a high of $1.59. If you will notice this was a penny shy of $1.60. Now, if you didn’t close the trade then you were greedy. It is important to remember that once an exit target is reached you follow your game plan. I probably should have listed an exit target of $1.56 which is exactly a 100% return but I rounded up.

Visa (V, $67.21, up $0.23)

August 70 calls (VEHHN, $0.85, down $0.30)

Entry Price: $1.60 (7/27/09)
Exit Price: $3.20
Return: -47%
Stop: Lifted

Action: This was the other earnings trade we left open. The calls traded as high as $2.00 today as Visa tried to clear $70 but they faded along with the stock the rest of the day. This was a profitable trade when the calls traded above $1.60. I’ll keep it on the books since I didn’t provide an update at 1:00 pm on the trade but the 80 cent stop was lifted.

Like I said, I don’t do a lot of earnings trades but I couldn’t resist the charts on Visa and Cerner.

Rick@MomentumOptionsTrading.com

Tags: Bank of America, Cisco Systems, Ford, Microsoft, options blog
Posted in Company Commentary, Earnings, Option Trades | No Comments »

Wednesday’s Wake-Up Call

Wednesday, July 29th, 2009

9:00am (EST)

Futures are pointing towards a negative open after Durable Goods orders came in lower than expected. Dow futures are down 38, S&P 500 index futures were down 6, while Nasdaq futures were down 7.

I mentioned the bulls were trying to hold Dow 9,000 and with earnings season nearing a close the bulls are looking for the next catalyst.

Bank of America (BAC, $13.34, up $0.25)

November 15 calls (BYOKO, $1.00, up $0.05)

Entry Price: $1.50 (6/12/09)
Exit Price: $2.25
Return: -33%
Stop: If BAC falls below $11, close the position.

Action: This position has gained over 30% since Sunday night’s Weekly Wrap but is still down from an entry price of $1.50. Open Interest continues to build in the November options as the 15’s have an OI of over 100,000 contracts. That means there are a lot of bets being placed at the $15 strike and they are very liquid. This is great if you are trading 50 or 100 lot contracts. I still like current positions at these levels.

For our new subscribers, BofA was below $5 on March 11th when I recommended a couple of call options, May 6’s and July 10’s. They returned 400% and 500% as BofA stood at $10 a month later. If you do the math and the stock doubles from here it puts BofA at $26. These calls would be worth $11 and you would have a 1,000% return on you hands. Anything is possible, right? However, all we are looking for is a run past $15 so we can double or triple or money. (PS, if you haven’t gotten my track record for 2009 or 2008, email us by going to the website and sending us a request)

Cisco Systems (CSCO, $21.93, up $0.09)

October 20 calls (CYQJD, $2.50, up $0.05)

Entry Price: $1.50 (6/2/09)
Exit Price: $3.00
Return: 67%
Stop: $2.00

Action: Tech held up well on Tuesday and Cisco traded up to $21.99. The 52-week high is $25.25 which is my target for the stock. The options traded as low as $2.16 so we will keep the $2.00 stop in place.

Green Mountain Coffee Roasters (GMCR, $67.50, down $0.25)

August 80 calls (QGMHP, $1.50, down $0.10)

Entry Price: $1.40 (7/27/09)
Exit Price: $2.10+
Return: 7%
Stop: $0.70

Action: The goal is to be out of this trade by the closing bell. We will be watching this one all day as the company reports earnings after the bell today. These options are inflated meaning the premiums are rich so be careful with this one. If you can escape with a gain, even if it’s 10%, it may be better than leaving this one open.

Buffalo Wild Wings (BWLD, $39.32, up $2.21)

August 40 calls (BQUHH, $1.25, up $0.01)

Entry Price: $1.10 (7/27/09)
Exit Price: $1.50 (7/28/09)
Return: 36%
Stop: CLOSED

Action: I told you the best time to sell is at the open and these calls traded as high as $1.60. The first 20 minutes are when the sharks are in the water and we all know sharks usually win these battles. I can’t stress this point enough to the beginners we have on board. If a stock is hot, the best time to sell is shortly after the bell because all of the rookie options traders were in there BUYING these call options on Buffalo reporting and beating Wall Street’s estimates. Each earnings trade is different as you will see and it’s best to have a plan going in and an exit on when to close the trade.

This trading tip is invaluable.

Cerner (CERN, $64.18, down $0.81)

August 70 calls (CQNHN, $1.20, down $0.15)

Entry Price: $1.30 (7/27/09)
Exit Price: $2.20
Return: -8%
Stop: $0.65

Action: Cerner got a 50 cent pop at the open and these call options trades as high as $1.50. The company reports after the bell on Wednesday.

Another point I want to make is how some option traders will only look for a 20 or 30 cent move in an option and then sell it. If you buy 20 contracts and an option goes up 30 cents in price you have made $600. Do it twice a week and you are making $50,000 a year. Hard but not impossible.

I’m throwing all of this information and tips at everybody this morning because I’m trying to teach you how to use options and the many different ways people trade them. What kind of profits you want to make is up to each trader. And each trader’s strategy is different. Some people like straddles and strangles, some investors write covered calls while others get naked. “Naked” option trading is not my game but all it means is that you are taking on a ton of risk.

Microsoft (MSFT, $23.47, up $0.36)

August 23 calls (MSQHQ, $0.98, up $0.23)

Entry Price: $0.78 (7/27/09)
Exit Price: $1.60
Return: 26%
Stop: $0.30

Action: Well, well, well…Yesterday I said “these calls options are technically in-the-money and we only need the stock to recover by 5% to make a decent return off of the trade.” Microsoft was in the red all morning but made a comeback along with the Nasdaq. The stock only made a 1.5% gain but the options gained 30%. Again, it was a short-term trade and I wanted to be out Friday. Hopefully we can ride this one a little higher but 25% is 25%.

IBM (IBM, $117.28, down $0.35)

August 105 calls (IBMHA, $11.69, down $1.17)

Entry Price: $3.40 (7/14/09)
Exit Price: $12.00 (7/24/09 1/2 the trade was closed)

Return: 253%
Stop: $11.00

August 115 calls (IBMHC, $3.70, down $0.40)

Entry Price: $1.05 (7/16/09)
Exit Price: $2.00 (7/24/09 1/2 the trade was closed)
Return: 281%
Stop: $2.00-$2.25, raise to $3.25

Action: We closed half of each side of these call options to make it a risk free trade from here on out. Our stops are in place and you’ll notice I raised the stop on the August 115’s. IBM has made a nice run but $118 is the new hurdle. The stock was down 60 cents in after-hours so we may be close to getting stopped out on the other half of the trade.

Visa (V, $66.30, down $1.89)

August 70 calls (VEHHN, $1.30, down $0.50)

Entry Price: $1.60 (7/27/09)
Exit Price: $3.20
Return: -19%
Stop: $0.80

Action: Visa will no doubt be the crown jewel of announcements on Wednesday. On Monday, the company said it would “continue to meet or exceed” Wall Street’s expectations. The numbers we want to watch for after the close is 64 (cents a share) and $1.63 billion on the revenue side. Warning: If Visa misses or doesn’t impress the Street then these options will drop like a rock if the stock heads south.

DryShips (DRYS, $6.79, down $0.29)

August 7 calls (OOCHJ, $0.50, down $0.15)

Entry Price: $0.25 (7/21/09)
Exit Price: $0.65 (7/27/09)
Return: 160%
Stop: CLOSED

September 7.50 calls (OOCIU, $0.60, down $0.13)

Entry Price: $0.35 (7/21/09)
Exit Price: $0.70
Return: 71%
Stop: $0.40, raise to 50 cents

Action: I don’t like giving gains back which is why we closed the August calls on Monday for a 160% return. The September call options had given us over a 100% gain and our stops were set just above our entry point to protect profits. I didn’t like the action in DryShips yesterday which is why I raised the stop. These calls hit a low of 45 cents on Tuesday so if DryShips doesn’t rebound we will let the market take us out with a small profit. This is exactly why we sold the August options. DryShips is a very liquid stock capable of making huge moves but let’s take what the market gives us.

Ford (F, $7.14, down $0.13)

December 6 calls (FLI, $1.63, down $0.07)

Entry Price: $1.25 (5/18/09)
Exit Price: $2.50
Return: 30%
Stop: $1.00, raise to $1.45

December 7 calls (FLJ, $1.06, down $0.01)

Entry Price: $1.00 (5/18/09)
Exit Price: $1.50-$2.00
Return: 6%
Stop: 50 cents, raise to 75 cents

Action: It is looking as though Ford is trying to build a solid base at the $7 level which would be perfect for this longer-term play. If we can build a base at $7 then move towards $8-9 then were are golden.

Check back after lunch for an update on today’s action.

Rick Rouse

Rick@MomentumOptionsTrading.com

Tags: Bank of America, Buffalo Wild Wings, Cerner, Cisco Systems, DryShips, Ford, Green Mountain Coffee Roasters, IBM, Microsoft, Visa
Posted in Earnings, Option Trades, Stock Earnings, Strategies, Trading Tips, Yahoo / Microsoft | No Comments »

Weekly Wrap for 7/26/09

Sunday, July 26th, 2009

1. Commentary
2. Green Mountain Coffee Roasters Brewing Big Gains
3. Earnings
4. Current Trades & Closed Trades
5. Monday Morning Playbook
6. Closing Thoughts

**************************************************

1. Commentary

The market continued its upward momentum last week after a wave of better-than-expected earnings helped pushed the Dow over 9,000. Nearly half of the Dow’s components reported earnings and most of them easily topped Wall Street’s estimates. Caterpillar (CAT, $42.00, up $0.74) was one of the Dow’s stars as it had a huge week after making a run from $34 to $42.

The bears had an opportunity to take back some of that momentum on Friday after Microsoft (MSFT, $23.45, down $2.11) and Amazon.com (AMZN, $86.49, down $7.38) dropped the earnings ball. Microsoft missed Wall Street’s revenue number while Amazon missed on its operating margins. Both stocks folded like a cheap lawn chair but the Nasdaq ended the day only slightly lower (-7 points) and finished at 1,965. However, the bulls were able to take the Dow higher by 24 points as it finished at 9,093. The S&P added 3 to close at 979.

For the week all three indexes added 4.0%-4.2%.

It has been an amazing stretch of action for the bulls as they have taken control of the market and have forced short sellers to cover their positions. With the market pushing new highs and crossing over its 200-day moving averages we could start seeing some of that cash that has been on the sidelines come into play.

The one thing we were watching going into earnings season was the tight trading range we had been in for nearly a month and I kept saying that because of this we could get a huge breakout one way or the other. Intel (INTC, $19.36, down $0.12) was the key to jump on board.

In fact, in the 7/19 Weekly Wrap, I had this to say:

“With the Dow at 8,734 and the S&P 500 at 940, I’d say the bulls are going to do something special or we will fall back into a trading range once again? That wouldn’t be so bad but it would set-up a bigger stage for a more explosive move either up or down. However, given the momentum, it appears the bulls are in firm control and willing to push us to new highs. Dow 9,000? S&P 1000? Nasdaq 2,000? Those are the targets on the scope and we have enough meaningful earnings this week to make a run at those levels.” (END)

One out of three isn’t bad and the other two indexes could close in on those targets if the bulls keep running.

**************************************************

2. Green Mountain Coffee Roasters Brewing Big Gains

On June 30th I did a review of Green Mountain Coffee Roasters (GMCR, $68.64, down $0.14) and talked about its recent stock split. At the time, the stock was at $58 and a month later it is at $68. Here were my thoughts at the time with quotes from that day as well:

“Green Mountain Coffee Roasters (GMCR, $58.54, down $0.02) recently completed a 3-for-2 stock split. This is normally a bullish event and there are ways to play these types of news events but you have to be careful.

For example, in the “old” days, you could buy a call option on a stock that was splitting and the stock normally kept going up as did the option. Nowadays, it’s a little trickier.

Green Mountain split its stock on June 9th and the price was adjusted from $93 to $62 to reflect the 3-for-2 split. Up until the split, the stock ran from $75 to $95 in just a month’s time. This is known as the “pre-announcement stage”. That was big money if you had bought a call option.

What usually happens now after a split is what is known as an “announcement pullback”. On June 9th, the stock closed at $62.57. By June 23rd, the stock hit a low of $51.65. That was “big money” if you had bought a put option right after the announcement.

Now we are seeing what is known as the “post split” rally. Since making the low of $51 last week, the stock has challenged $60 over the past few sessions. The key number we are watching is the $62.57 number because that would mean the stock is trying to resume its uptrend. A break above $60 could lead to the test of its 52-week high. Remember, most financial sites will quote $94 as the 52-week high but they do not factor the 3-for-2 split.

So basically, if Green Mountain gets back above $62-$63 it is at new highs

I don’t like any trades for this week in Green Mountain because of the 3-day weekend coming up but let’s put the July 60 calls (QGMGL, $2.00, down $0.05) and the August 65 calls (QGMHM, $2.90, unchanged) on our Watch List. You may be able to “day trade” these for this week by buying 10 or 20 contracts and looking for a 50 cent bump which would get you $500-$1,000 but don’t hold anything overnight.” (END)

Well, that is exactly what we did as we rode the July call options for a quick 70% profit and closed out the August calls on July 1st at $3.55 for a 20% profit.

The July options have already expired and the August 65 calls (QGMHM, $7.80, up $0.14), as you can see, have doubled. In hindsight, we could have left the August 65’s open but it was a “paired” trade and we were only looking to keep these options opened for a short period of time. There was also a pullback to $53 by mid-July. However, when I said the key number we were watching was $62.57 that was the alert to go long again. The stock broke thru this level last Monday.

The point I want to make is that we still have it on our Watch List and I wanted to remind everybody of this “option trade” if you see something like this in the future. We did the right thing by taking quick profits but I did fail to remind you of this level. Although Green Mountain is listed in the Monday Morning Playbook section and will report earnings this week, the easy money has already been made.

Another point I want to make is that some financial sites have the 52-week high at $94.50 but this is not accurate. Green Mountain IS at new 52-week highs and we are looking to take advantage of this trend on Monday morning.

**************************************************

3. Earnings

Monday: ACE Limited (ACE, $48.40, up $1.34), Amgen (AMGN, $60.92, up $1.08), Buffalo Wild Wings (BWLD, $37.65, up $1.23), ChangeYou.com (CYOU, $41.65, up $0.45), Corning (GLW, $17.00, up $0.21), Honeywell (HON, $33.99, down $0.23), Olin (OLN, $14.03, up $0.29), Plum Creek Timber (PCL, $32.35, up $0.19), RadioShack (RSH, $16.06, up $1.49), Sohu.com (SOHU, $63.63, up $0.83) and Verizon (VZ, $31.50, up $0.23).

Tuesday: Black Box (BBOX, $29.83, up $0.41), Coach (COH, $29.31, up $0.08), Deutsche Bank (DB, $72.91, up $0.61), DreamWorks Animation (DWA, $28.26, down $0.12), Energizer (ENR, $59.34, up $0.66), Fresh Del Monte Produce (FDP, $19.08, down $0.24), Jacobs Engineering Group (JEC, $42.28, up $0.27), Massey Energy (MEE, $23.74, up $0.65), McKesson (MCK, $46.71, up $0.43), Norfolk Southern (NSC, $44.84, down $0.52), Panera Bread (PNRA, $55.18, up $0.24), Teva Pharmaceutical (TEVA, $50.35, up $0.16), Valero Energy (VLO, $18.31, down $0.01) and Western Digital (WDC, $30.40, up $0.22).

Wednesday: Akamai Technologies (AKAM, $21.13, down $0.12), American Tower (AMT, $33.48, down $0.29), Callaway Golf (ELY, $5.27, up $0.12), ConocoPhillips (COP, $44.95, up $0.96), Daimler (DAI, $44.85, up $0.77), Flowserve (FLS, $74.65, up $1.65), Green Mountain Coffee Roasters (GMCR, $68.64, down $0.14), Hartford Financial Services (HIG, $15.02, up $0.64), Hess (HES, $53.63, up $0.45), Honda Motor (HMC, $28.35, up $0.04), Moody’s (MCO, $25.93, up $0.41), NutriSystem (NTRI, $15.68, down $0.13), O’Reilly Automotive (ORLY, $41.07, down $0.03), Taser International (TASR, $5.54, up $0.12), Time Warner Cable (TWC, $33.42, up $0.15) and Visa (V, $67.29, up $0.10).

Thursday: Apache (APA, $79.75, up $0.48), AstraZeneca (AZN, $47.54, up $0.44), Barrick Gold (ABX, $35.35, up $0.26), Colgate-Palmolive (CL, $75.10, up $0.52), First Solar (FSLR, $169.43, up $11.65), Genworth Financial (GNW, $6.89, flat), Kellogg (K, $47.92, down $0.21), Las Vegas Sands (LVS, $10.88, up $0.73), MasterCard (MA, $185.47, down $0.40), McAfee (MFE, $44.22, up $0.07), MetLife (MET, $33.69, up $0.93), Regal Entertainment Group (RGC, $14.19, down $0.05), Rosetta Stone (RST, $26.91, up $0.02), Travelers (TRV, $43.22, up $0.61), Walt Disney (DIS, $26.58, down $0.22) and Wynn Resorts (WYNN, $47.29, up $2.62).

Friday: Allergan (AGN, $52.68, up $0.79), Calpine ($13.10, up $0.10), Constellation Energy Group (CEG, $29.50, up $0.49), Dominion Resources (D, $34.59, up $0.69), DryShips (DRYS, $6.23, up $0.05), Kaydon (KDN, $36.72, up $1.28), Snap-on (SNA, $33.32, up $0.62) and Washington Post (WPO, $407.88, up $5.30).

**************************************************

4. Current Trades & Closed Trades

Ford (F, $6.78, down $0.20)

December 6 calls (FLI, $1.43, down $0.09)

Entry Price: $1.25 (5/18/09)
Exit Price: $2.50
Return: 14%
Stop: 60 cents, raise to $1.00

December 7 calls (FLJ, $0.88, down $0.11)

Entry Price: $1.00 (5/18/09)
Exit Price: $1.50-$2.00
Return: -12%
Stop: 50 cents

Action: Ford announced earnings last Thursday and going into the report I was telling our subscribers that I still liked BOTH call options although they were slightly lower than our entry prices. Ford gave back 3% on Friday but longer-term these positions look solid.

Bank of America (BAC, $12.51, down $0.18)

November 15 calls (BYOKO, $0.75, down $0.03)

Entry Price: $1.50 (6/12/09)
Exit Price: $2.25
Return: -50%
Stop: If BAC falls below $11, close the position.

Action: The action in BofA has been weak since the company announced earnings and the call options are at a 50% loss. This is normally the cut-off on “trades gone wrong” but this position was back at even going into earnings.

These calls will be worth at least $3 if the stock can make it to $18 in 4 months which is when the November options expire. There are times when you will see an option loss 50%-75% of its value before turning around a posting a 100% return. This could be one of those situations so we shall see. For those of you looking for good entry prices, now may be the best time…if BofA can make it to just $16.50 by November these calls are worth at least $1.50 or a double.

Cisco Systems (CSCO, $21.88, down $0.02)

October 20 calls (CYQJD, $2.50, down $0.02)

Entry Price: $1.50 (6/2/09)
Exit Price: $3.00
Return: 67%
Stop: $2.00

Action: I still have a short-term target of $25 on Cisco and I’m hoping we get there within a couple of months, if not weeks. This position was DOWN 50% a few weeks ago and here is the point I was making with BofA. If you will notice, I used longer-term options because when these two positions were profiled when the market was in the process of establishing a trading range. I knew that going into the trade but I was still bullish on Cisco and that patience has paid off.

IBM (IBM, $117.64, up $0.58)

August 105 calls (IBMHA, $12.60, up $0.20)

Entry Price: $3.40 (7/14/09)
Exit Price: $10.00
Return: 215%
Stop: $10.00-$10.50, raise to $11

August 115 calls (IBMHC, $4.10, up $0.40)

Entry Price: $1.05 (7/16/09)
Exit Price: $2.00
Return: 171%
Stop: $2.00-$2.25

Action: I suggested closing some of these call options on both the August 105 and 115 call options on Friday to lock in gains of 250+%. Half of the 105’s could have been closed to lock in a 253% return on some of the position. You could have taken some off the table with the 115’s at $4.00 and locked in gains of 290%. This made it a RISK FREE trade from here on out with the added luxury of participating in any further gains.

USEC (USU, $6.03, up $0.03)

August 7.50 calls (USUHU, $0.26, flat)

Entry Price: $0.52 (7/16/09)
Exit Price: $1.00
Return: -50%
Stop: None

Action: We should get word in a few weeks on if the company is getting funding for a secured loan of $2 billion. USEC has a monopoly on the uranium market and about 30 plants waiting in the wings. Don’t start new positions here because of the nature of the trade.

Fairchild Semiconductor (FCS, $8.69, down $0.14)

August 10 calls (FCSHB, $0.10, down $0.05)

Entry Price: $0.17 (7/16/09)
Exit Price:$0.34
Return: -41%
Stop: $0.10

Action: This trade got stopped out on Friday at 10 cents but I have a strange feeling it could turn positive. These were such cheap out-of-the-money options that we probably could have left them open but the stop was triggered.

DryShips (DRYS, $6.23, up $0.05)

August 7 calls (OOCHJ, $0.30, up $0.05)

Entry Price: $0.25 (7/21/09)
Exit Price: $0.50
Return: 20%
Stop: None

September 7.50 calls (OOCIU, $0.40, up $0.07)

Entry Price: $0.35 (7/21/09)
Exit Price: $0.70
Return: 14%
Stop: $0.20

Action: DryShips is capable of explosive moves and all we need is a run to $7.25-$7.50. This is a high risk/ high reward play and is based on market momentum. The company reports earnings this Friday so we may close the position or at least half ahead of earnings if we can get 50% returns.

**************************************************

5. Monday Morning Playbook

We are in the process of closing out some trades as we have stops in place to protect our profits. The futures are lower as I go to press and anything can happen between now and the opening bell. If the bulls are going to show up, they will do so early.

If we get a lower open on Monday morning it may provide us a good opportunity to go long if the bulls are serious.

Here is what I’m watching and a list of trades that can be added as well. These trades are going to run around earnings so keep that in mind. Earnings bring extra volatility and price premiums on options so we will have to pick our entry points carefully.

Green Mountain Coffee Roasters (GMCR, $68.64, down $0.14) reports earnings on Wednesday after the bell. We have three days to see if the August 80 calls (QGMHP, $1.80, up $0.05) can make a move. Set an entry price of $1.60 but if Green Mountain opens strong don’t pay over $2.00 for the calls. Also wait until 20-30 minutes after the market is open and use limit orders if this is the case.

Buffalo Wild Wings (BWLD, $37.65, up $1.23) reports after the bell on Monday and we may have missed this one. The company has opened 40 restaurants in 2009 while other chains have slowed growth. In fact, the company just opened its 600th store and is shooting for 1,000. Again, we may be late to the party. The August 40 calls (BQUHH, $1.50, up $0.50) surged 50% on Friday as traders positioned themselves ahead of the report. This has me hesitant on making it an “official” recommendation and I wouldn’t pay over $1.75 for them. Restaurant stocks have been heating up…

Cerner (CERN, $65.89, up $1.67) set a 52-week high on Friday and will report earnings on Wednesday. It’s a play on HealthCare and I like the August 70 calls (CQNHN, $1.60, up $0.55) up to $1.75.

Microsoft (MSFT, $23.45, down $2.11) got pounded after reporting a disappointing quarter and the August 23 calls (MSQHQ, $0.92, down $1.73) dropped a whopping 65%. I believe the sell-off was a bit much but was expected. The company said computer sales we down but some of that could be the fact that people are waiting for Windows 7. There may be a trade here up to $1.00 and Microsoft could rebound if the market continues higher. If we start lower, set limit prices at 85 cents.

All of these trades carry a high degree of risk because of the earnings and the fact that Microsoft could continue lower.

**************************************************

6. Closing Thoughts

Many of you that have followed me for a while know I can be both bullish and bearish. The bottom line is I love price movement and volatility. Last summer at this time I was preparing us for a steep market correction and we got it. There were a ton of good trades on the way down and that is another thing I want to mention this week. When the market drops, you can make just as much money by buying put options as you can by buying call options which is what we have been doing of late. The key is you have to train your brain not to freak-out when things take a turn for the worse.

However, until the bulls tell us different, we will continue to go long but remember that at times we can get caught by being too bullish. The odds are increasing that we could enter another phase of this bull market and as option traders that means buying more calls than put options. Also, we can’t forget the ferocity that the bears can have on any given day. As we have seen in the past, the market can reverse course quicker than Twitter gets tweeted but the bulls have the momentum.

Keep an eye on the other two levels I have mentioned – S&P 1000 and Nasdaq 2,000. The Dow made the 9,000 target and could make a run to 9,600 if the other two indexes keep moving higher. We have another round of heavy earnings and the China stocks could make some nice runs if earnings come in better-than-expected.

Economic news will also have an impact on things and Friday’s GDP (gross domestic product) and employment numbers will be watched closely.

See ya’ at the opening bell!

Rick@MomentumOptionsTrading.com

Tags: Amazon.com, Buffalo Wild Wings, Cisco Systems, DryShips, IBM, Microsoft, USEC
Posted in Company Commentary, Earnings, Market Analysis, Market Commentary, Option Trades, Sectors, Stock Earnings, Trading Tips, Watch Lists, Weekly Wrap | No Comments »

« Older Entries

Newer Entries »

Our updated 2012 Track Record is now at 85-18 for an 82% win rate. We have closed 24-straight winning option trades since late March!

Despite the recent volatility, we have given more "locks" to our subscribers than a Vegas bookie. If you started with a $10,000 trading account, our CLOSED option picks would have made you over 600% by now. In other words, YOUR $10,000 option trading account would be worth over $70,000 as we have become one of the most powerful option newsletters in the business. Our biggest trade of the year so far was hit in early May when shares of Green Mountain Coffee Roasters (GMCR) fell 50% after an earnings miss which made our subscribers 576% on the put options!

We DON"T count "half" closed trades twice, or "third" closed trades three times like other option newsletters do. Some option services will fluff their Track Records up by using these smoke-and-mirror tricks. They will also "average down" a losing trade in hopes of it coming back then will record the "average" price of the trade when it was really 2 bad trades. Most option websites DON'T have track records and say they give 300% winners. The devil is in the details.

We don't play these types of games which is why we have the most dedicated subscribers in the business because we have earned their trust. We have recommended 103 trades, 85 winners, 18 losers for 2012. Pretty simple and pretty powerful. We also have verified auto-trading partners who trade our recommendations for your account if you cannot watch the market. They will also tell you how good and how honest our service is.

Here are some of our other profitable triple-digit recommendations: Capital One (COF) call options +423% in 8 days, American Express (AXP) call options +310% in under 7 days, magicJack (CALL) call options +80% in 3 days, Microsoft (MSFT) call options +124%, STX call options +100% in 2 weeks, +114% and +131% on 2 MGM Resorts (MGM) call options trades in 3 weeks, +158% on Zynga (ZNGA) call options and +107% in Aflac (AFL) call options in 6 days. We also had a +200% winner with Scientific Games (SGMS). Some of our double-digit gains include +58% on WPRT calls, +80% on TSM and +38% on INT call options.

Our Weekly Wrap is 35-0 since the start of 2011 and is 17-0 for 2012. Some of our winners include +55% on Solazyme (SZYM), +27% on Clean Energy Fuels (CLNE), +38% on Vivus (VVUS), +17% on MGM, +18% on Dendreon (DNDN), and +20% on Darling (DAR). Despite what the suit-and-ties say, you can make incredible gains trading the RIGHT covered calls.

Over the past 5 years we are averaging a 75% winning percentage for all our trades despite volatile, flat and choppy markets. Come see why some of Wall Street's pros are following us instead of the Journal!

Here are some of our profitable 2011 recommendations: ORLY call options +191%, VMW call options +100%, JOYG call options +169%; GS put options +184%; FDX put options +164%; OXY put options +74%; +137% on RIMM put options, +1,167% on RMBS puts in 11 days, +296% on FCX calls; +157% on ZAGG calls; +110% on LNKD puts; +133% on RLD put options.

You can also request our Track Records to see all years by entering your email address which will allow you access to the portfolios.

If you are missing these juicy profits, come give us a try. Get your password to our Members Area instantly when you sign up TODAY! One profitable trade will easily pay for your membership. You can request our 2008-2011 Track Records by sending us an email or filling out the box below. 665 Total Trades; 459 WINNERS or 7-out-of-10.

REGINA L.
I just want you to know that I love the way you write and explain everything. I am new to this, and have lost 50% of my account until I met you guys. Iit is slowly coming back. I will be calling to set up a year
of membership rather than the one quarter. Thanks again, and LOVE YOU ALL.

STEVE T.
Rick, I appreciate the advice. I think I will just sit back and utilize your selections only for awhile. This will obviously save me a great deal of money in commissions. I have gone thru your entire site including the video on money management. This has brought me to the stark realization that I have been trading too much for too little. I definitely have not been "swinging for the fences", but I also think I have been getting impatient with trades and getting out too fast. This has no doubt caused me too trade too much. I like, and definitely agree on, the advice on money management. Thanks for the help.

SCOTT H.
Thank you!!! I held on to the NFLX position since Nov. 13 at a cost of $1.89. Sold ½ on April 14th for a 540% return and the other ½ upon earnings for 702% return. Total profit of $11,615 a 621% return. Keep the recommendations coming and thanks to you and your team for the service you provide.

PETER G.
Rick & Team, GREAT Call on NKE for my two trading accounts:
1) Entry at .65, out at 1.45, 1.55 Profit = $415
2) Entry at .60, out at 1.75, 1.50 Profit = $485

LAWRENCE O.
Hey Rick! Here is an update on what your picks have done in my accounts.

1) Great call on the JoyG March 55. I bought when you said, then bought again on one of the dips. Booked 80+% profit. Made enough to pay for your service for years to come.

2) Also booked profits on your Berk Feb 74 (80%) and threw a major chunk of change at the March 75’s (190+%). I would have never known that Buffet's stock had split if it weren’t for your service. Bought the shares also for the long haul. Won’t look at them for another 20 years. Great job on getting us in before the indexes did.

3) Took profit on your Imax March 12.5. 20 cent trailing stop at 1.90 yesterday. Not sure what the profit on that was, but profit is profit.

I see that you took a loss on some of these. It’s all good. I look to trade your “ideas” not your exact calls. I THANK YOU! For your ideas and commentary. Keep up the good work. And keep those ideas coming.

C.J.
Loving this subscription so far! I got into the BRK feb 76 calls the day you talked about right before the split...now up over 300% (0.70 to 2.475)! Keep the good picks coming and let's see some OSIS and EMC upside soon! Just wanted to share my positive enthusiasm on your newsletter...it gives us individual investors great ideas on not only the options market, but also the broader equity market! Case in point is BRK...I can't always read the breaking business news but its easy to read your twice daily updates on my smartphone...helped me get some BRK shares immediately after the split which I will hold for the long haul! Thanks again!

SHAUN
Aloha Rick - Thank you so much for the great CL pick. I am not sure if there was buy-out/merger news or what but at 3PM today Colgate-Palmolive absolutely EXPLODED to the upside, and my calls turned into green candy when they went from 1.40 to 3.8 in a matter of seconds! I even sold a few for over 4.0! Much thanks and keep the solid picks up my friend, honestly. Only a fool would scoff at 267% gains... Peace!

MICHAEL K.
I like the fact that you ask for comments from subscribers. Good customer service. By the way, am enjoying the service so far. Some good
profitable calls. Keep up the good work.

PARAG P.
Woo hoo! Out for 50% on WMT this am. Making up for my depression for getting out of pcln for a 30% gain monday :( you the man! any word on the manual? My friend Mike ( who I sent to your service) told me he emailed you about your integrity in reporting fills. I echo that sentiment big time.. keep it up! Cheers!

JAY P.
Hi Rick, as a new member all I can say is, 'show off' LOL, with PCLN.

MIKE
Rick, I am a new subscriber to your service, and I want to say I am impressed. I am impressed by your results, but more than that I am impressed by your reporting of your fills. You could have easily said you got that Wal-Mart call today for 80 cents, instead you reported 98 cents! Good job and keep it up, I watched the reporting of the fills first, and then I subscribed. Thank You.

TRISH D.
Hi, good morning. I jumped the gun a little on this one (PCLN). But still made $1,675.00 profit!! Very happy!! Keep up the good work!! Thanks.

MIN L.
Hi there, I have joined recently, and I am very happy to tell you that I am up over $10,000 on your picks in a month. I started on 10/7 with the Intel pick. I'll be your member for life. Please don't quit on us. Also, I am learning a lot about options. I didn’t get in your recent APOL and that gold trade and only had one loss on CHK. I appreciate all the DD you do. I enjoy your market commentaries. Best advice site period, and I have tried a few here and there. Again, you guys rock!

JOE G.
Thanks be to Momentum Options Trading for providing me with some fantastic wins. I just started with this service and am up nearly 50% in less than a month. There have been losses, but if I manage them properly, I will continue the best efforts given on the blog (in which there are no complaints). What a great cause for humanity. I feel more confident about my trades and continue to play the wins. Best of all, I am now keeping my regular paychecks in the bank! Thank you!

GREG F.
Rick - I wanted to say thanks for getting me started on the right foot with your service. I have made six trades since starting on October 22, 2009. Five are winners and One loser netting me $6,245. Thanks again and keep the trade recommendations coming.

NOEL
I got into the Nike 60 Call at 1.85, sold at 5.00, also bought a 55 put at 1.05, but got stopped out at .35. What a ride! $2830.00 in the black even with the put. It's right at 100% return. I hope earnings season coming up is going to look like this trade.

TODD F.
Nice call on Nike. I think I'll go buy a pair with my profits! : ) I did the straddle for safety but still made 62% on the trade. Not bad for less than 24 hours. If Goldman is right, then the Nov 70s or 75's could be a steal today.

PAUL H.
What a sweet way to get introduced to Momentum. My first trade based on your picks and it a 2X. Thank you!

NOEL
“Limit order was set at 1.60 on RIMM so it sold. I may have left some money on the table but you can't go broke making a profit. That was a fun trade. Thank you. Good call. I’ve been watching and trading Rick's advice since March. It’s usually a fun ride, but I give him heck when it's wrong to. :) ”

CHRISTIAN
“Your service rocks! I made bank on Dendreon last week! The other thing I have to say is that it took me quite a while to find a REAL options trading service like yours. Most of what’s out there is 99% scam and very sketchy. Momentum Options Trading is the first service I found that I can trust and seriously make money with.”

JOHN
“I made $420.00 on ANF in 2 days. Thanks for the trade and updates on getting out of the trade.”

CHARLES M.
“I did follow a lot of your trades with 1-2 contracts per trade and YTD I’m up 108%. I try not to follow blindly by not entering all of your trades and sometimes entering the ones you don’t. I entered AIG a few weeks ago against recommendation – that one hurt.”

BRYAN C.
“I have been following you for several months and am interested in the new service. I hate to see the free service go away but as they say, “all good things must come to an end”. My ability to join will be greatly influenced by the monthly fee so I’m very curious to see the new prices. Thanks for making April a great month for me and my family.”

JOHN H.
“I have really enjoyed the past month since finding your blog. You have made some great calls. I would appreciate info. on the new options mentoring program. Thanks.”

JEFFREY
“Hi Rick, I have been following your blog for several months now and I would like to be including on the list for your new service and to receive more information about it. And yes I was a Dendreon winner with your tips. Turned $280 into $7700, and literally saved my butt.”

ED
“I made over 6k on your Dendreon trade, and I’m very interested in learning how you pick and trade options. Sign me up.”

GREG
“Rick – Wow what a day! I got in at the Dendreon calls at $2.25. Thanks to for your advice. I appreciate that. This company has a lock on this type of therapy and no one else in the world is close. Kind of reminds me of the type of companies that Peter Lynch and Warren Buffet suggest that investments be made in. Companies that can build a moat around their business model, that allows them to charge a premium for their product or service. In other words - a monopoly.”

KEN
“Hi Rick, Thank you so much for the Dendreon trade, I made almost $10,000 with that trade with a little over $2,000 investment. You have shown me the power of options trading. Again, thank you so much for all your inputs.”

GARETT
“Hi Rick, thanks for the encouragement to play the dendreon calls! did freaking great! Got in the first lot at $1.44 on 3-24-09, sold at $2.45, 70% not bad. Bought it back at $2.30 on 4-7-09 closed out on 4-14-09 for 454% gain! Wow! I love it when that happens. So, thanks the encouragement to get back in when others were saying sell, sell, sell. Keep up the good work.”

TERENCE
“Rick – Thanks for Dendreon – it has made all the headlines today! I missed on RIMM earlier, but I’ve been holding onto DNDN calls since 3rd week March. Of course today it all paid off today, as DNDN rocketed up.”

Jan. 31 2012
Rick, new member...Studied all current trades, did some chart work,picked ZNGA, PEP, MGM...Sold on Feb. 2 for $3600.00 profit...Cost for 1-year membership to your newsletter was less than $1000.00..All I have to say..Thank you. John H –

3/18/11
Rick, I purchased 10 contracts of the Nike March 85 puts Thursday afternoon for $2.00. Thing is, I was upset because the puts went down to $1.60 or so before the market closed. Well, needless to say Nike didn’t impress Wall Street and when I turned on the computer this morning the puts were worth $7.10! Sold them for a $5,100 profit!. Thanks again, you are the MAN. Chuck J-

2/3/12
Hi Rick,

I will start off with a thank you for your time and dedication to all
the research you and your team commit yourself to. This is not me just being excited about the profits I have accumulated aka (bank) ! You have helped me get back to the passion I had of researching stocks/options. Keith N-

Hi Rick,

I want to share my great results on GMCR. Based on your comments on February 15th, I bought 20 options at $0.28. They closed today at $7.00, which is a 2,300% gain. My $560 dollars turned into $14,000 in less than a month. In decades of trading, this is my single best trade ever. Thank you! By the way, the Dow was down 228 points today and I could care less. What a great trade. It proves the amazing power of options. I am so grateful for your service, which calls it straight all the time, your options trading manual, and most of all, your amazing skill
at finding winning trades. I have attached a copy of the trade from
my brokerage screen.

Posts Tagged ‘Cisco Systems’

Trade Updates

Futures Pointing Towards Big Open

Trade Updates

Wednesday’s Wake-Up Call

Weekly Wrap for 7/26/09