Return of the Mack

If one were to take a couple of minutes to peruse my P&L, while simultaneously examining my life you would see something not wholly surprising.  The more focus I apply to my trading, the better my performance.

That being said, I need to do a much better job of being a student of the markets and getting in them every day.  Here are some tickers I am following, with my thoughts where applicable.  (Unless otherwise noted, all charts are daily charts and are from freestockcharts.com)

CALL - If this can get going above $20, could do some running.

SWFT - Nice follow through on 03/05 of a breakout day 03/04 - Will be taking a position in this one.









BRCD - Looking for some follow through on yesterday's breakout.

MAR - Would like to see the hotel giant break out over that 54 level.

Current positions:

HTH - From $23.75
EME - From $43.32
MANH - From $33.98
FB - From $69.87

This material is provided for informational/entertainment purposes only, as of the the date hereof and is subject to change without notice.  This material may not be suitable for all investors and is not intended to be an offer or solicitation of any offer to buy or sell any securities.  Following me in trades will lose you money.

UA - Purchase

Stop me if you've heard this one before:  UA - Bought Under Armour September $60 calls at $1.00/contract today.  What follows is the exact verbiage from my previous UA purchase.  This was a purely technical play.  I am a member of iBankCoin's PPT trading website.  It is quite honestly one of the most useful tools I have come across and worth every penny.  UA flagged in The PPT algorithms as Oversold.  The stats said that the previous 10 times that had happened with UA the stock had turned around for an average return of better than 10%.  

Today the stock is trading in the $56 range, and looks to be 'resting' for it's next leg higher.  Since the PPT implies seeing $60 or $61 in the next two weeks, the Sept $60 calls should just about be a sure thing.  Of course, weak numbers from either Dick's (announces Q2 tomorrow, August 14) or Foot Locker (announces Q2 Friday August 17) could jack this play up.  At that point I will re-evaluate the position and may double down.

This material is provided for informational purposes only, as of the date hereof and is subject to change without notice.  This material may not be suitable for all investors and is not intended to be an offer, a solicitation of any offer to buy or sell any securities.  Following me in trades will lose you money.

Earnings Play: MRVL

Marvell Technology reports second quarter results after the market close on Thursday August 16.  In anticipation of what some smart money (and my independent research) is anticipating to be a good news quarter, I purchased the September   $13 call options for $0.38/contract.

Target is $1.00/contract either in the run-up to earnings or in post-earnings action.

This material is provided for informational purposes only, as of the date hereof and is subject to change without notice.  This material may not be suitable for all investors and is not intended to be an offer, a solicitation of any offer to buy or sell any securities.  Following me in trades will lose you money.

Earnings Play: JCP

JC Penney's is in the downward spiral.  Painfully obvious.  They made a strategic move earlier this year to get away from what had become constant sales.  Their customer base did not appreciate this move.  They signed Ellen Degeneres as lead spokesperson.  Their customer base did not appreciate this move.  Seemingly every thing this once great american retailer does has blown up in it's face.  JCP was set to report second quarter results prior to the market open on Friday August 10.

With this in mind, I bought the August 22 put options right before the market closed on Thursday August 9 at $1.52.

And as expected JCP reported disastrous results for Q2.  And essentially admitted that as bad as that was, worse was likely to follow.  The stock should have tanked and I should have banked coin.  Sadly that was not meant to be.  After dropping 6% in the pre-market, JCP turned it around and ended Friday up 5.88% (off of a high of $24.57 or 11.1% gain).  This is what makes the market so much fun (and so endlessly frustrating!).  No matter what the logical response should be, one just never knows how the market is going to handle news.

The bear case is still very much in force for JCP, so I have doubled down on this bet by purchasing the September 22 puts at $1.05.  Having until September 21 for my thesis to be proven correct should allow me to exit these two trades at least flat, hopefully with a profit.

In hindsight, I should have opened with the September puts.  The August puts expiration is just too close for me to able to work off bad price movement.  So be it, lesson learned.

This material is provided for informational purposes only, as of the date hereof and is subject to change without notice.  This material may not be suitable for all investors and is not intended to be an offer, a solicitation of any offer to buy or sell any securities.  Following me in trades will lose you money.

DNKN - After Action

This is my after action report for DNKN.

**Quick disclaimer: as I just started this blog, there will be several entries that are only after action, as I had already purchased the shares.  I am not trying to make myself look better than I really am by only reporting good trades.  I will put every trade I make on this blog, good or bad.**

DNKN was bought March 9, 2012 at $30.74.  This trade was entered based on a the cup and handle formation that was formed from Oct to Feb (cup) and mid-Feb to March (handle).  The buy was signaled on a breach of the $30.25 level.

DNKN was sold on August 2, 2012 at $28.76, for a loss of $1.98/share or -6.44% before commission and taxes.  The sell was made as I finally pulled my head from my ass and realized that this stock had turned against me and would not be returning to profitability any time soon.  This was a great example of laziness and lack of discipline on my part.

The sell should have been made on July 20, when the upward trend line was broken.  That would have been somewhere in the $33 range, which would have been a nice 10% or so profit (before t&c).  Looking back at this I simmer in rage at my inablility to do the right thing here.  The signs were obvious, just lacking execution on my part.  The only positive to take away from this is that I did finally wake up and pulled the plug without further damage to my capital.

I would rate myself 4/10 on this particular trade.  I followed my position sizing guidelines and obeyed my risk rules.  I had sound reasoning for my entry but totally screwed the exit up.  By not executing the exit properly I turned a winner into a loser.  The key will be to make sure that I learn from this mistake and not repeat it in the future.

This material is provided for informational purposes only, as of the date hereof and is subject to change without notice.  This material may not be suitable for all investors and is not intended to be an offer, a solicitation of any offer to buy or sell any securities.  Following me in trades will lose you money.

GMCR - Purchase

Bought GMCR September $20 puts at 1:57 pm August 7, 2012 for a price of $1.00.  

Green Mountain Coffee Roasters, Inc. engages in the specialty coffee and coffee maker business.  The company sources, produces and sells approximately 200 varieties of coffee, cocoa, teas and other beverages in K-Cup portion packs and coffee in traditional packaging (from Yahoo! finance).

The bear case still exists and is quite strong for this company.  My belief is this will see $18 before it sees $28, and these puts are a low-cost/low-risk way to play the short.  My target is $3.00/contract, my protective stop will be at $0.50/contract.

This material is provided for informational purposes only, as of the date hereof and is subject to change without notice.  This material may not be suitable for all investors and is not intended to be an offer, a solicitation of any offer to buy or sell any securities.  Following me in trades will lose you money.

UA - Sell

Sold the UA August $55 calls for $3.40 at 11:54am August 7, 2012.  The purchase was described here.

The gains for this transaction were $2.30/contract or 209.1%.  This trade went exactly as planned.  There exists the possibility that these contracts will continue to run higher, but the odds were not great enough that it was worth violating my exit plan.  The underlying stock touched above $58 today, which as I explained in the purchase piece was where I thought it would go.  The stock has made quite the run over the last couple of days becoming a little over-extended.  The greater probability over the next couple of days is for sideways, possibly corrective price movement.  Given the time-sensitive nature of options, the time to exit was now.

I would rate myself 9/10 on this particular trade.  I followed my position sizing guidelines and obeyed my risk rules.  I had sound reasoning for my entry and nailed the exit.  There is a small chance that I left money on the table, however I am completely satisfied with a three-bagger.

This material is provided for informational purposes only, as of the date hereof and is subject to change without notice.  This material may not be suitable for all investors and is not intended to be an offer, a solicitation of any offer to buy or sell any securities.  Following me in trades will lose you money.