Play Recommendations:

Lotto Weekly Options:

Calls: 690 (Expired)

Puts: 635 (sold)

Puts: 650 (sold)

Aug Options:

Puts: 630 (sold)

Calls: 700 (Expired)

8/10/12 - Profit Stopped Out at $70.00 - This play is now completely closed out!

8/9/12 - Still trailing the stop

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8/8/12 - Wow, what an awesome trade we had on the put side!! Congrats if you were able to get in and even more if you are still hanging on. Of course, the calls will expire, but that is expected because we were doing a straddle play and as you can see below, the stock moved more than enough to pay off those losses and make a very nice profit! I am still holding the Aug 630 Puts with a trailing $5.00 stop. I will be keeping an eye on this stock for another opportunity to make some more money. 

Look at what the further OTM options did this time:

Weekly Options

Monthly Options

Open Trades:

Closed Trades:

8/8/12 - Pre-market chart

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8/7/12 - Earnings were good per say, but future revenue projections will fall short of analysts expectations; and that is very bad news for a high flying stock like PCLN. As I said below, I favored the puts and suspected there was something amiss with the chart patterns.

Will this drop get some reversal at the open tomorrow? I have seen that happen several times, especially on a stock such as this, but I still believe I will be deep enough ITM on my put options; and that will more than pay for the calls. Question is, will this be the beginning of a long-term sell off? Time will tell...just do not get married in your mind to a particular direction with PCLN—follow the trend closely with this one.

Ok, so what caused all this deluge to befall the stock? The report from management that they will be making less money in the future. Plus, their competitor, TZOO is building revenue which means competition has finally gained enough momentum to interest money managers who look for value in stocks with future compelling news and growth. With that said, TZOO should start to see a rise in share price as PCLN falls further from grace.—analysts are so fickle!

TZOO is currently trading at $22.50 vs. $600 plus on PCLN; besides, if you take all the hype out of this stock, it's only worth $30.74 P/E and $13.06 Price/Book. Translation: it's gotta whole lotta snub coming from big money managers. I would be a shorter on any bounce that fails to hold a 30 minute green bar tomorrow.

Be sure to watch the charts for a Bear 180 signal and then get on board with PUTS!!

Next stop, if this train keeps on rolling down, will be sub $400 per share.

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8/7/12 - Cha-Ching  PCLN gets decimated in after hours!

8/7/12 - Here are the trades I placed on PCLN

Here are the deeper OTM puts:

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8/6/12 - Tomorrow is the big day for PCLN. The action today started out strong, but went flat along with the overall markets. PCLN did hold the gap from Friday, so this could be a good indication there are buyers waiting in the wings. Looking over the options today I see a lot of open interest at 670 then 690 on the calls and on the put side open interest is 500 or less across several strikes. This means more investors are bullish, so if PCLN surprises, there will not be a strong short covering rally to add to the upside action.  According to www.shortsqueeze.com PCLN has 3.1 million shares short which translates into 3.3 days to cover. That's not a large enough amount to take this stock over a 10% move unless they make a very unexpected announcement.

Because this stock is so highly priced, the options are very expensive as well. The weekly options are ridiculous, so this time around, I am looking at buying no further than 5% out of the money. If you have a small trading account, I strongly suggest you sit this one out. The risk to reward ratio is very low on the weekly trade, so if you must, then buy the Aug expiration strikes and be sure to stay around 5% OTM.

Here is an interesting headline from Forbes:

Priceline's Earnings Will Show Global Growth Continues Despite Europe Woes

Whenever I see this kind of optimism, I like to overweight the put side of my trades. Of course with a stock like this, you have to do a straddle unless you have the money to risk.

I know from past experience with this stock that if they miss, it's going to be a massively profitable ride on the puts!

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8/5/12 – On Tuesday, we have PCLN earnings report which can make for some great profit opportunities as you have seen from past picks in my Lotto Plays section. In the past two weeks we have seen an amazing swing in price for this stock. It's definitely a stock that closely follows the overall market trends, so you need to be ready to act fast on a daily basis in order to capture the most profit opportunities.

Looking over the daily chart below, we see that PCLN has been in a solid sideways channel for a month now. Channels tend to resolve in a big breakout or breakdown, so watching each earnings report will bring you closer and closer to a huge trading opportunity.

First off we need to look at what happened in the past to get a better idea of what might continue to happen or change in the future.

As you can see, this stock continuouly beats analysts estimates and the stock price swings in very large movements when they report good or bad news. Below are the last three quarterly reports and the results the next trading day:

This particular stock has a whole lotta love from the analyst world. The interesting thing to me is this stock has too much analyst love going on. Almost every day I hear nothing but buy-buy-buy recommendations on this stock. Of course had you been on the train raid from the beginning or even a few months ago, you are a very happy investor. Should you get on the band wagon now? Why not? I certainly would advise you to keep a running put contract under you because when the love stops (NFLX is a great example), the massive drop in price will look leave a very bad taste in your mouth.

You should record all these talking heads when they are touting PCLN; and then watch them when it falls from grace; that alone will convince you they are just ants following a chemtrail when they spew their investing prowess.

I do not make bold statements on this website, but I do show you both my winning and losing trades without bias. After all, I am a trader like you, and I spend my days looking for clues that will allow me to capture profits—consistently!

Ok, so you want to see why I am skeptical about all the buy hype on this stock?

Institutions own ALL of this stock! This means they totally control the action and movement. What you need to do is just get on the ride while it lasts, but always be ready to capture the drops, because as you can see from this past week, PCLN is capable of massive price moves to the downside.

Note: Only institutions can make such a highly prices stock move this much in such a short time frame, so you need to be ready to capture the profits when the big Elephants step into the PCLN pool.

Currently PCLN is trading in a tight sideways channel and is poised to make a strong move after earnings on Tuesday. The last time PCLN traded in a long-term sideways channel, it broke out to a very long up trend making investors a substantial profit! Of course, it took over 41 weeks to do this and just 9 short weeks to put in an all time high.

It's a long believed notion that a channel breakout will move the distance of the high and low. That being said, if PCLN makes a break of this current channel, we could see a new all time high again. What concerns me this time is the current channel is inside a major drop vs. the last one that was sideways of a major new high.

Looking deeper into the weekly chart we see the 200MA is well below $400 per share. This is the target support area should the love affair turn into a messy divorce...and it will, eventually. Question is, will you be on the right side of the settlement!...I will, so you better be subscribed to know when I am trading this one!

Tomorrow I will post my suggested plays for earnings in my Lotto Section and Current Plays sections.

Profits Up!