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Tuesday, August 7th, 2012
1:35pm (EST)
Over the years, we have covered quite a few explosive biotech stocks that have made incredible returns for our subscribers but sometimes we can overlook the 800-pound gorillas in the room.
We have been following shares of Pfizer (PFE, $23.84, down $0.42) for years but we rarely, if ever, play options on the stock as a directional call or put play. Shares don’t quite move as much as they did in the late 90’s which saw the stock split 4 times and growth was abundant. Nowadays, there is risk associated in owning the stock as some of Pfizer’s drugs come off patient and face competition risks.
There are also risks with developing new drugs as research and development, clinical trials, and marketing can get expensive. However, getting a multi-billion dollar blockbuster drug approved and to market can be lucrative for years to come.
Pfizer had high hopes for its Alzheimer’s drug, Bapineuzumab, which it was in development with Johnson & Johnson (JNJ, $68.37, down $0.48) and Elan (ELN, $10.87, down $0.38) but halted plans to develop the drug after another trial failure.
Bapineuzumab was in the second stage of a final 4-stage trial but failed to improve the symptoms of dementia. In late July, the drug also failed a late-stage trial.
Alzheimer’s is a hard disease to crack and there hasn’t been much advancement in finding a cure. Pfizer decided to pull the plug and go back to the drawing board but they will be looking to partner with another biotech company that may have a new cure for Alzheimer’s in their pipeline.
Shares of Pfizer looked like a steal under $20 but we waffled on the chance to buy it in the high teens and add it to our Weekly Wrap covered call portfolio. We mentioned a few years ago Pfizer should’ve have taken a hard look at Vivus (VVUS, $23.24, up $2.02) or Arena Pharmaceuticals (ARNA, $7.41, up $0.20) as a possible play in the obesity market but they ignored us.
We have done well with Vivus and Arena this year by playing both the stock and options. Vivus has returned our subscribers numerous double-digit gains over the past couple of years. In 2011, we recommended covered calls 3 times that made our subscribers 18%, 17% and 14% as shares traded below $10 for much of the year. In January, we went back to the well and suggested another Vivus covered call trade that made our subscribers 38% by March.
We also started recommending Arena back in February when shares were just above $2. We used the juicy premiums in the calls options to lower our risk to $1.88 and in July our Weekly Wrap subscribers closed a trade for a 117% return. In March, we made 12% on a quick Arena call option trade but rolled the position over in late April and early May to get repositioned. Those 2 call options trades made our subscribers 464% and 54%, respectively.
Although we don’t own Pfizer, we did reload on Vivus again in July and we are hoping to make a double-digit profit by next Friday with the trade. As far as Pfizer, we would love to see shares fall back to $20 but support is strong at $22 and we doubt shares fall 10% on this news. They could over the next few weeks and we are watching Pfizer closely as a possible covered call trade, but for now, we are happy holding Vivus.
As far as the market, the bulls have pierced resistance and have cleared our next wave of price targets. We will have to see how the indexes end at the close but we are still waiting to see if there will be a breakout. In the meantime, we have a couple of trades in our Weekly Wrap that are allowing us to enjoy the upside and the new trades for our Daily have September expiration dates so we have plenty of time to wait for a pullback while the bulls continue running.
When the market is in a trading range, it is best to have both long and short positions which should offset some of the volatility we have been seeing. Although we are itchy to trade, we are trying to remain disciplined to avoid the urge of adding call options or buying more puts until we get a few more signals on where this market is headed over the next month or two and not just today.
As we head to press, the Dow is up 97 points to 13,214 while the S&P is higher by 12 points to 1,406. The Nasdaq is popping 35 points and is at 3,024. Subscribers, check the Members Area for the updates.
Tags: ARNA, Bapineuzumab drug trials, biotech options, biotech stock, VVUS
Posted in BioTech, Hot Stocks | Comments Off
Friday, March 16th, 2012
12:55pm (EST)
Tomorrow is St. Patty’s Day and the bulls are trying to add some more green to this week’s gains. We have a lot to cover so let’s go over the numbers real quick.
The Dow is up 2 points to 13,255 while the S&P is higher by 2 points to 1,404. The Nasdaq is also up 2 points to 3,059. Maybe we should play 222 as a “pick 3” today as hot as we have been.
Here is a quick update for our portfolios.
This week has been one of our best week’s ever for the Daily publication. We are currently nursing open trades of 428%, 308%, and 118% to go along with the 35 winning trades we have closed for 2012.
We have been able to turn a $10,000 trading account into over $40,000 which is a return of over 300%. We seriously doubt any other option newsletter can match our results so far this year.
Not only have we had an incredible week for our Daily newsletter, our Weekly Wrap quietly continues to perform beyond our wildest expectations. We are on track to close up to 7 double-digit winners by the closing bell as the March options expire today. Take a look at the profits that could be coming our way if shares hold above the current strike price on the options we have sold.
magicJack VocalTec (CALL, $25.19, up $1.00) +19%
Bank of America (BAC, $9.58, up $0.34) +20%
Vivus (VVUS, $20.34, up $0.20) +38%
Alcoa (AA, $10.56, up $0.21) +17%
Symantec (SYMC, $18.11, down $0.09) +16%
Solazyme (SZYM, $15.66, down $0.19) +55%
MGM Resorts (MGM, $14.44, down $0.27) +13%
This will bring our 2012 Closed Trades for the Weekly Wrap to 19-0. If we include last year’s 16-0 mark, we could be 35-0 since started the newsletter a little over a year ago. Remember, our goal is to bring you solid double-digit profits every month with this publication no matter what the market is doing. If you can hit 5 winning trades for 20% or more you will double your money. The aforementioned covered call winners would have done just that for you.
We will give you our full track record this weekend as we are squaring-up a number of positions today. We did take a few hits on a few aggressive earnings trades but overall we should be 55-10 thru the first 3 months of 2012. Please note, and this is super important, we do not count half or quarter winning trades 2, 3, and 4 times. There are many option services that do this. If we did, our track record would be 85-10.
Other newsletters will also double down and tell you to buy more of a position if it is down and then they will average their cost down. However, if the trade is a loser, they will only count it once.
The bottom line is that most investment newsletters don’t have a track record because they give you so many trades hoping to hit on a few and they don’t trade their own account. They brag about the winners but won’t mention the losers.
We have auto-trading partners which verify our results and you can always request our current 2012 Track record by sending us an email if you are not a current subscriber.
Our reputation is built on trust and all of our trades are done in real time and are time dated. Our auto-trading partners get great fill prices on all of our trades for your account and your order is placed the instant our Trade Alerts go out. If you are a busy professional and can’t watch the market all day long, let our brokers do the work for you.
The reason we are telling you all of this is because we have been tired of listening to the Wall Street “pros” and talking heads that have gotten this market wrong and when it does crash they will tell you they were right. However, if and when there is a selloff, don’t get nervous. Remember, we can make just as much money to the downside as we can the upside. Just take a look at our 2008 portfolio, especially some of the returns on the Financial stock option trades.
We have a busy weekend ahead of us but the good news is our portfolio is light for both our Daily and Weekly Wrap which means we are ready to start our next batch of 50 trades. We will let the charts tell us which way the market is headed instead of trying to guess and wait for a pullback. The trend has been higher since the August lows and we have outlined clear support levels to watch for if there is a trend change. Until then, the trend is our friend.
We will be back Sunday night with the Weekly Wrap and we have updated our current trades one last time. Until then, have a great weekend everyone!
(Remember, we just ran a special for our Weekly Wrap so if you would like a 3-month trial at a 50% discount, please send us an email.)
Tags: AA, bac, CALL, Covered Calls, VVUS
Posted in Covered Calls, Hot Stocks, Money Management, Option Trades | Comments Off
Friday, March 9th, 2012
12:55pm (EST)
Following a slow start, the market is pushing higher as the bulls zone in our “fluff” targets once again. Futures held steady going into this morning’s marquee event as the unemployment numbers took center stage. We weren’t too nervous because the trend has been higher so we were just hoping there was some improvement or things stayed flat.
Nonfarm payrolls totaled 227,000 versus estimates for 204,000 while Private payrolls came in at 233,000 versus a forecast for 220,000. The Unemployment Rate came in flat at 8.3% while Average Hourly Earnings were up 0.1%. Hip, hip, hooray!
We mentioned coming into March that the first two weeks are normally bullish while the back half of the month can be sketchy. Next Friday is “triple-witching” week which is when the March options expire. While we can expect heightened volatility, as the market has usually finished mixed over the past decade on this day so anything can happen.
We also talked about Friday/ Monday market closes in our Weekly Wrap so a positive close today and a break above our fluff targets would be bullish.
As we head to press, the Dow is up 40 points to 12,946 while the S&P 500 is advancing 8 points to 1,374. The Nasdaq is up a double-deuce (22 points) to 2,992.
We would like to see Dow 12,950; S&P 1,375; Nasdaq 3,000 when the closing bell sounds.
We will be back Sunday night with our Weekly Wrap and many of you have given us rave reviews since joining the publication. We have also received a lot of requests for our 3-month special that ended in February which was priced at a ridiculously low at $129.
With March options expiring next Friday we will likely get “called-away” from at least a half-dozen trades so it would be the perfect time to see how this process works for those of you who are new to covered calls.
The publication aims at providing solid monthly double-digit gains and one of our current trades could return as much as 40%! Vivus (VVUS, $21.00, down $0.25) has surged past our “strike price” as the March 15 calls (VVUS12031700015000, $8.00, down $0.25) we sold will likely get exercised.
We constantly remind our readers 5 winning trades of 20% or more will double your money and the newsletter is 28-0 since inception. We could be 34-0 by next Friday.
If you would like one last chance to join this publication, please use this coupon code
A0FB422004
(copy and paste it, please) and go to the subscription page and click on the 3-month Weekly Wrap tab. Use the code, set up your Members Area password, and you will be in like Flynn.
All of our trades have beautiful charts to show you exactly what to expect and we update the portfolios with Trade Alerts just like we do with the Daily newsletter. At less than $45 a month, we are practically giving away this publication away but we really want to show new traders how to safely build a portfolio which will allow you the risk to speculate with buying options for even bigger gains with our Daily publication. One trade will likely pay for your membership.
We do have a NEW TRADE today as we roll over some profits so we have to go as we want to get our subscribers in this name before the good news comes out on Monday.
We also have a few last minute updates for our current trades, including more profits to take in one trade that is up 175%! Subscribers, check the Members Area for the updates.
We will be back Sunday night with our next edition of the Weekly Wrap so be there or be square. Until then, have a great weekend everyone!
Tags: Covered Calls, Vivus drug approval, VVUS
Posted in Market Analysis, Market Commentary | Comments Off
Friday, February 24th, 2012
1:00pm (EST)
The bulls are going for their second weekly win following a slight pullback in the first full week of February and are looking towards March to continue the rally. The bears have done their best to try and break the first wave of support but buyers have stepped-in and bought the dip all week.
Although trading has been choppy, the bulls are still pushing resistance and a close above our fluff targets could propel more buying. We have done some really good chart work over the past few months and the homework has been paying off.
We were able to close two more call option recommendations for our Daily publication which brings our 2012 track record to 27-3. Remember, we don’t count “half” profits twice like some option publications do and none of them have come close to matching our start for the year.
We also had a big trade go our way for our Weekly Wrap as Vivus (VVUS, $20.17, up $1.44) doubled for the week after getting pre-approval for its obesity drug, Qnexa. Many of you have written to us over the last few days to thank us for our research as we told you we had a good feeling the FDA advisory panel might give the drug the thumbs-up.
Here is how the trade looked last Sunday in our Weekly Wrap, along with the chart work (quotes from 2/17/12):
Vivus (VVUS, $11.99, up $0.81)
March 15 calls (VVUS12031700015000, $1.45, up $0.10)
Original Entry Price: $12.60 (1/12/12)
Lowered Price from Selling Options: $10.85
Exit Target: $15
Return: 11%
Stop Target: None
Action: Shares will move big-time this week so expect volatility.
Vivus dipped to a low of $10.12 last Thursday on news of its upcoming FDA meeting this week which made some investors nervous. The 20-year chart shows a run to $15 on good news and a recommendation to the FDA panel and $20+ on approval of its obesity drug, Qnexa, down the road. However, any negative news could knock shares back below $10 or even $7.50. It is a 50/50 chance this week on which way the news goes so if you don’t want to stay in the position, you could buy the call option back and sell the stock. We are going for an approval recommendation so we are going to stay in the trade.
Here is another chart for Vivus from the beginning of the month:
As you can see, we maintained our “Buy” rating on Vivus when others Wall Street pros were waffling and said the drug wouldn’t make it to market. We said it could be a multi-billion dollar jackpot for the company and that Qnexa wasn’t the only drug Vivus has in its pipeline.
Of course, we don’t do TV or grant interviews so only our subscribers knew the real deal with Vivus and we thought we would show you how our trades look for the Weekly Wrap.
Our current Vivus covered call trade will return nearly 40% but it will be the fifth time we have recommended the stock for our Weekly Wrap. The average return for the other four trades was 20%, and our total return since last May was nearly 120%.
We have also combined our winning 2011 recommendations (16-0) and our closed trades for 2012 (12-0) into one spreadsheet to show you how we have turned a $10,000 trading account into nearly $15,000 with these 28 trades. The return is 46% thus far and we could have another 10 winners in March. If you are a current subscriber, you can view all of our portfolios in the Members Area. If you are not yet a subscriber, you can request our track records in PDF format to see for yourself.
We also have auto-trading partners who can process the trades for you as we have decided to add the Weekly Wrap, along with our Daily, so that you will never miss a trade or a Trade Alert.
Don’t forget we are running one last special for the Weekly Wrap. After this weekend, that’s it and it will be your last chance to sign-up for an incredible deal.
You can sign up for a one-time 3-month membership to our Weekly Wrap newsletter for only $129. This is a 50% savings off our regular subscription price and averages out to just $43 a month. Use promotion code A0FB422004. Please associate with Weekly Wrap 3 month Subscription (Reg. $261).
3-month Weekly Wrap membership – $129 – use coupon code A0FB422004 and go here:
https://secure.MomentumOptionsTrading.com/amember/signup.php
We have a lot to cover in our Members Area including our new trade that was filled at the open. We will be back Sunday night with our next issue of the Weekly Wrap and Monday morning for the daily. Until then, have a great weekend, everyone.
Tags: 000, Dow 13, Vivus call options, Vivus Qnexa approval, VVUS
Posted in Covered Calls, Hot Stocks, Market Analysis | Comments Off
Thursday, February 23rd, 2012
12:50pm (EST)
We wanted to talk a little more about covered calls because we really want you to broaden your horizons when it comes to investing. It’s no secret how much money buying the right call or put option can make you if you pick the right option on a stock but everyone should have an investment strategy where they have “safe” money and “speculative” money. The safe money earns you double-digit gains, the speculative money tries to hit the triple-digit gains.
Option traders love fast triple-digit “homerun” gains in a day or two or even a week but many of them overlook the “singles”. Vivus (VVUS, $20.00, up $10.00) has been a name that not many traders follow but we can bet they are trying to trade the options and stock today. It is all over the news on how the company won pre-approval of its obesity drug, Qnexa, but we have been doing our homework on this company for years and although we just missed a huge trade for our Daily, here is how we played the stock in our Weekly Wrap all last year and into 2012.
In May 2011, we recommended Vivus at $7.93 and sold 2 call options for a total of 80 cents which lowered our cost basis to $7.13. We were called away in August at $9 for an 18% gain.
In September, we recommended shares again at $8.45 and we sold October and November 9 call options for a total of 75 cents to lower the cost to $7.70. In mid-November, shares were called away at $9 as the stock was at $9.84. Our return was 17%.
The next week, we recommended shares again at $9.78 and sold the December 10 calls for $1.00 which lowered our cost basis to $8.78. In mid-December, Vivus was called away at $10 as the stock was at $10.09 on expiration day. The trade made 14%.
That same day, we recommended buying the stock again at $10.09 and selling the January 11 call option for 90 cents. This lowered the cost basis to $9.39. In mid-January, Vivus was at $12.04 so we were called-away once again. The return was 17%.
Knowing we might get called away in January, we also suggested on January 12, 2012 with the stock at $12.60 to reload the position and to sell the March 15 calls (VVUS120317C00015000, $5.10, up $4.15) which were going for $1.75. This lowered our cost basis to $10.85 but we will likely have to sell the shares at $15 if they maintain a price above our “strike price” until mid-March.
So here is our point.
If you had $8,000 and started taking these trades, the first trade would have made $1,250. The second trade $1,300. The third trade would have made you $1,220. The fourth trade would have made $1,610 and our current trade will make $4,150 if shares are called away at $15 in mid-March.
The total profits would add up to be $9,530. The return on the $8,000 investment would be 120%. So yes, we may have left a little on the table but by writing covered calls, we lowered our risk. If shares would have fallen to $5 on a negative vote, you still would have banked $5,380 from selling call options and we could have closed the trade out on the bad news and still made money.
This is another reason why the Wall Street pros who bash covered call writing have no clue what they are talking about. It was one of the reasons we started the Weekly Wrap newsletter to prove these knuckleheads wrong and to make you money.
Remember, we brought you the Dendreon (DNDN, $14.42, up $0.69) story at $4 before shares made a run past $50. We told you to get out at $40 last summer. We now like the stock again at current levels. We also gave you the Imax (IMAX, $24.69, up $0.73) story at $3 and was bullish up until the low $30’s which is when we told you to get out.
These two stocks are another reason we started the Weekly Wrap. Owning stocks require a little more trading capital and they don’t provide the leverage options do but when you use these two strategies together, man, can they be a powerful combination.
For those of you who do not subscribe to the Weekly Wrap, it is the SAFEST way to play options if you are a new trader and just learning or if you have a trading account under $2,000.
You can sell an option by owning just 100 shares of a stock so the above trades would have yielded the same returns if you would have started with just $800.
Our Weekly Wrap trades were 16-0 last year and we are 12-0 for 2012. We could have up to 10 more positions called away in March. We just added 2 new trades this week where we are expecting profits of 50% and 100% over the next 6-12 months.
If you are not a subscriber to this publication, we have ran specials in the past but we have come to the point where we are on the verge of exploding as subscribers take notice and trading firms find out about our research.
We have kept the price low for those of you who took a flyer and believed in us and we want to offer one more special to everyone who is not a subscriber. One trade will probably pay for this low introductory offer so take notice.
We are offering a special 3-month membership to the Weekly Wrap that we will probably never offer again because the publication is starting to speak for itself. This special rate is for current members and new subscribers and for those of you visiting the website today. We will not advertise this rate either and it will only last through the weekend.
As far as the 2 trades we entered this week, one stock is priced at $9 and we have a 6-12 month target of $15. The other is a stock that could go from $4 to $8 in 1-2 years.
You can sign up for a one-time 3-month membership to our Weekly Wrap newsletter for only $129 to get these 2 new trades which are still at these low levels. This is a 50% savings off our regular subscription price and averages out to just $43 a month. Use promotion code A0FB422004. Please associate with Weekly Wrap 3 month Subscription (Reg. $261).
3-month Weekly Wrap membership – $129 – use coupon code A0FB422004 and go here:
https://secure.MomentumOptionsTrading.com/amember/signup.php
As far as the market, the bulls have finally showed some strength after Monday’s big pop at the open and are pushing our fluff targets once again.
The Dow is higher by 44 points to 12,982 while the S&P 500 is up by 4 points to 1,362. The Nasdaq is higher by 20 points to 2,953.
We also have profits to take in another call option trade as shares have fallen below our Hard Stop. We were able to book profits of 36% but we will be back to trade the options again. It is a $12 stock that is going to $20 this year. Count on it.
Make sure you hit us up on our Weekly Wrap offer to start adding even more profits to your portfolio.
Subscribers, check the Members Area for the updates and we will be back in the morning with our next update.
Tags: covered call trading, Covered Calls, VVUS, VVUS call options
Posted in Covered Calls, Hot Stocks, Market Commentary, Money Management, Strategies, Trade Update, Trading Psychology, Trading Tips, Weekly Wrap | Comments Off
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Bulls Back in Driver’s Seat
Friday, March 9th, 2012
12:55pm (EST)
Following a slow start, the market is pushing higher as the bulls zone in our “fluff” targets once again. Futures held steady going into this morning’s marquee event as the unemployment numbers took center stage. We weren’t too nervous because the trend has been higher so we were just hoping there was some improvement or things stayed flat.
Nonfarm payrolls totaled 227,000 versus estimates for 204,000 while Private payrolls came in at 233,000 versus a forecast for 220,000. The Unemployment Rate came in flat at 8.3% while Average Hourly Earnings were up 0.1%. Hip, hip, hooray!
We mentioned coming into March that the first two weeks are normally bullish while the back half of the month can be sketchy. Next Friday is “triple-witching” week which is when the March options expire. While we can expect heightened volatility, as the market has usually finished mixed over the past decade on this day so anything can happen.
We also talked about Friday/ Monday market closes in our Weekly Wrap so a positive close today and a break above our fluff targets would be bullish.
As we head to press, the Dow is up 40 points to 12,946 while the S&P 500 is advancing 8 points to 1,374. The Nasdaq is up a double-deuce (22 points) to 2,992.
We would like to see Dow 12,950; S&P 1,375; Nasdaq 3,000 when the closing bell sounds.
We will be back Sunday night with our Weekly Wrap and many of you have given us rave reviews since joining the publication. We have also received a lot of requests for our 3-month special that ended in February which was priced at a ridiculously low at $129.
With March options expiring next Friday we will likely get “called-away” from at least a half-dozen trades so it would be the perfect time to see how this process works for those of you who are new to covered calls.
The publication aims at providing solid monthly double-digit gains and one of our current trades could return as much as 40%! Vivus (VVUS, $21.00, down $0.25) has surged past our “strike price” as the March 15 calls (VVUS12031700015000, $8.00, down $0.25) we sold will likely get exercised.
We constantly remind our readers 5 winning trades of 20% or more will double your money and the newsletter is 28-0 since inception. We could be 34-0 by next Friday.
If you would like one last chance to join this publication, please use this coupon code
A0FB422004
(copy and paste it, please) and go to the subscription page and click on the 3-month Weekly Wrap tab. Use the code, set up your Members Area password, and you will be in like Flynn.
All of our trades have beautiful charts to show you exactly what to expect and we update the portfolios with Trade Alerts just like we do with the Daily newsletter. At less than $45 a month, we are practically giving away this publication away but we really want to show new traders how to safely build a portfolio which will allow you the risk to speculate with buying options for even bigger gains with our Daily publication. One trade will likely pay for your membership.
We do have a NEW TRADE today as we roll over some profits so we have to go as we want to get our subscribers in this name before the good news comes out on Monday.
We also have a few last minute updates for our current trades, including more profits to take in one trade that is up 175%! Subscribers, check the Members Area for the updates.
We will be back Sunday night with our next edition of the Weekly Wrap so be there or be square. Until then, have a great weekend everyone!
Tags: Covered Calls, Vivus drug approval, VVUS
Posted in Market Analysis, Market Commentary | Comments Off