Written by Pat McCubbin
Exact Stock Picks
Good afternoon,
Today marks the end of another week of trading and another month in the books. The following is a result of our efforts for June. Our overall goal is always try to accumulate $1000 in profits, and we were successful last month to the tune of $1426. But what all traders want know is what have you done for me lately?
Over the next two weeks it is very important to make decisive moves in the portfolio. All of our plays are stocks combined with protective options. We only play front month options and they are due to expire in two weeks. Here is how the portfolio looks going into July.
Annaly Capital Management Inc (NLY)
This company is very strong. Trending well above the 10 day moving average and has been very consistent in these choppy markets. We went long 300 shares of stock coupled with 3 July 17 puts. We are almost in the money on the play. This stock also offers a 15% dividend to boot.
Cephalon, Inc. (CEPH) – We closed out the short position this week and now hold 1 July 60 call option. With two weeks left in trading if we get a run in this stock we can still cash in nicely on the option. This trade went well against us in the beginning so a break-even on the entire trade would not be the worst thing in the world.
Nike Inc. (NKE). – We put this on as a short position with a July 75 call option as a hedge. The stock immediately went our way so we decided to take the profits on the stock and look to make more on the long call option. Everything was going our way until the markets collapsed. Unless they start selling shoes to centipedes in the next two weeks we will probably take a loss on this one. The overall trade though will still remain positive.
Cognizent Technology Solutions – Another example of covering a short stock position and retaining the call option. Unfortunately, this one as well got sold off in the last couple of weeks and the option is far out of the money. We will most likely take a small loss on the entire play.
Jos. A. Banks (JOSB) – We are long this stock at $60.36. This has been a very strong performer and we believe a turnaround in the markets will push this back to our entry point.
Dril-Quip, Inc. (DRQ) – This is one of our more interesting set-ups. We are long a put, long a call, and short the stock. In yesterdays trading we nearly cashed in a quick profit on the stock but it just missed our target price. We see this as still being a nice piece of action over the next two weeks.
Companhia de Saneamento Basico (SBS) – A tremendous trend and a very strong contender going forward.
If we can get the markets to move to the upside this stock will run nicely. We are currently slightly out of the money and hold a long July 40 put for protection.
Syntel Inc (SYNT) – We are currently out of the money on this stock but still have a great deal of time to make that up and cash in a profit. This one still looks strong on the charts.
Plan of Action for July
We had a very nice June, but July is going to challenge our skills a bit. The recent 8% drop in the markets made it very difficult to turn easy profits. The good news is that if we had not protected our stock positions with options we would have absorbed probably twice the losses. When you hold an option play on a stock it not only protects you, but allows you to make decisions in a rational manner. How many times have you sold a stock out of fear only to regret it when the stock rallied back. We all have done it. Our strategies are in place to prevent that.
We will be putting on numerous positions over the next couple of weeks. What we would like to see is some volatility so that we can take advantage of the fears and greed of the traders. We also feel that this market is still oversold in the short-term. We are hesitant at this time to load up on short positions, but we will put on a short play if it makes sense.
So there it is. A wrap up of the week, month, and an action plan for July. We want to thank all our new subscribers that joined us this week. We will continue to do everything in our power to assist you in your investing needs. Thank you, and have a great holiday weekend.
TEN Exclusive: Portfolio Update – 7/2/10 is an article from: 
