Option Investor
Newsletter

Daily Newsletter, Thursday, 9/26/2013

Table of Contents

  1. Market Wrap
  2. New Option Plays
  3. In Play Updates and Reviews

Market Wrap

Debt Ceiling Weighs Heavy

by Thomas Hughes

Click here to email Thomas Hughes
Introduction

This morning the futures trade was mildly positive ahead of today's economic events. Global markets were mixed, yesterday's late-day sell-off had lingering effects hard for some to shake off. Chinese indexes lost as much as 2% while the Nikkei, lifted by Abenomics, gained nearly 1.25%. In Europe the mood was a little more subdued. Early losses were recouped and these markets were able to enter positive territory before the close of their day. U.S second quarter GDP final revision was met with little fan fare but seemed to support global stock prices in the end. Adding to the positive tone was the announced drop in jobless claims that came with statements concerning the state of recent jobless claims reporting issues.


After the data was release at 8:30 AM index futures gained some ground and held it into the open. After the bell the U.S. indices continued to climb. The S&P put on +8 points off the get-go and regained the 1700 support level. The NASDAQ and Dow Jones Index also gained at the open, adding roughly 0.8% and 0.6% together. Talk of tapering is falling off, being replaced by the impending Debt Ceiling crisis. For now the Debt Ceiling seems to be a non-issue for the markets, I at least am assuming that something will be done, most likely at the last minute, just like the last time, and the time before that etc. Speaker Boehner made comments around 10:15 in response to the Presidents stance of “no negotiation”. The Speaker basically called him out saying that “it just doesn't work that way”. I expect to hear more and more of the same from both parties over the next few days.

Early gains did not hold. By lunchtime the indices had fallen back to near break even. The S&P 500 hovered around 1696-97 until after noon when it tried to perk back up. After reaching an afternoon peak around +5 points the S&P traded side to side until the close. The index is trading above support but below the 1,700 level. At this time 1,700 appears to be more of a round number resistance area with lesser importance provided current support levels hold. Near term fears are dominating the market, specifically the Debt Ceiling hooplah. The markets may be expecting, as I am, a quick resolution. If we get one the rally could be back on, if not there may be some more downside in the near term.

Today's Data

First up, 2nd quarter GDP. The previous estimate held steady at 2.5% growth in the second quarter. This isn't a great market moving event but helps support the current outlook. The first half of the year wasn't awesome but it wasn't bad either, and in some respects better than expected. This could provide a spring board for the second half of the year which is expanding and expected to expand into the end of the year.


Initial jobless claims fell to 305,000 from the previous weeks revised 310,000. These numbers include revisions due to the California/Nevada backlogs so are a little more trustworthy than what we received the past two weeks. California and Nevada both say that the reporting issues have been resolved. The revision to last weeks data was only +1,000, a very small number in my opinion. This week no states reported a drop in claims while 8 states including California and Nevada reported increases in claims larger than 1,000. California tops the list with over 22,600 new claims, a jump that is likely explained by the delay in processing. The four week moving average also fell this week. The average is now 308,000, a new five year low. Assuming that issues are resolved the jobless claims data is starting to look pretty good. Claims levels are falling off as expected and are pointing to a potential drop in unemployment for the current month and quarter.


Continuing claims rose 35,000 from a mild upward revision to last weeks data. At this time this data point is also looking pretty good. Claims have made a substantial drop and also point to a possible drop in the overall unemployment rate. Assuming there are no major revisions to this weeks data I am starting to think that the jobs market has made a marked improvement. Total claims also climbed this week, and by a comparably small amount. Total claims are now at 3.921 million, below 4 million for the second week and at multi-year low levels. Total claims do not get revised.



Pending home sales were released after the bell. The annual rate of pending sales remained steady at +5.8% despite a drop in August sales. August sales fell by about 1.6% according to the National Association Of Realtors. Sales were impacted by rising interest rates and rising prices. This is the third month of decline in the index since it hit a 6 year high early this summer. Tomorrow be on the lookout for Personal Income and Spending as well as the Michigan Sentiment Index. Next week things get hot on the economic front again with the release of September data. Auto and truck sales will be followed by ADP Employment, Challenger lay off's, Initial Claims, NFP and U.S. Unemployment.

The VIX

My attention was called to the VIX this morning by a comment made by Rick Santelli. The VIX is indeed at low levels but not extremely so. The index is currently trading around the 14 level, just under long term resistance. This is a low level in comparison to the long term chart but not extremely low when compared to last 6 months. Indicators are pointing to a possible rise in the VIX. A move above resistance, around 14.50, would be bearish for the market in the near term. The Debt Ceiling could provide the catalyst for such a spike in the VIX.

The VIX

The Gold Index

Gold experienced some volatility this week. The metal has been bouncing off the $300 level, making a peak yesterday before falling back down today. Today gold shed about 1% on renewed fears of Fed Tapering. The jobless data is pointing to lower unemployment, one of the FOMC thresholds. Better jobs markets equals tapering which should equal a stronger dollar and weaker gold. Over the same time the Gold Index has retreated to the lower range of the triangle patterned previously identified. MACD is weakly bearish, stochastic weakly bullish, both indicate support at the current level. If gold prices remain semi-stable and over $1300 the triangle range may hold. However, I will also be watching closely for any signs of a break down below support. If such a break were to occur the index could complete the 1000% retracement of the 2008-2011 bull market.

The Gold Index

The Oil Index

The price of oil has fallen quite a bit this week. Today oil prices gained mildly but remained near 5 weeks lows. Diminishing geo-political fears as well as renewed production in some previously shut down oil fields have helped to alleviate some of the upward pressure on oil prices. The Oil Index has retreated somewhat as well but remains near a multi-year high and a major resistance line. Even with this weeks decline in prices oil prices have been high this quarter which should equate into higher revenues and potential profits for oil companies. The index may be in a consolidation at this time, overbought conditions have been relieved while the index has maintained high prices. MACD is still bullish but close to the zero line and stochastic is currently pointing down. Support currently exists at 1400 and resistance at 1430. A break above would be bullish longer term, a break below could find additional support at the 1375 level coincident with the long term trend line and the 150 day moving average.

The Oil Index

The Dollar And The Yen

The dollar gained versus the yen in today's trading. The pair is still bouncing between the top of the previously broken triangle pattern and the resistance of 100. Looking more closely it appears as support is actually at the 23.6% Fibonacci retracement level. The pair has been able to maintain this level for about 4 weeks now and has made two significant bounces from it. Indicators are bearish at this time. Momentum is very weak and also shows support at the current level. The pair may continue to bob along at this level until the next round of BOJ meetings or even the next FOMC meeting. Support exists at the Fibonacci retracement, resistance at the 100 level. Strong U.S. data should help strengthen the dollar and to support this trade.

USD/JPY

Story Stocks

I want to start first by following up with RedHat which reported earnings earlier this week. I began two weeks ago by introducing the new earnings season with my early bell weathers, Oracle, Adobe and RedHat. Adobe was the first to report, surprised negatively on the bottom line and yet inspired investors with news and future guidance. Adobe is switching to a subscription based model that is expected to increase revenues and profitability. Adobe shares are up 5% since the earnings news hit the wire. Next up was Oracle who also reported weak revenues and earnings. This company also lowered full year guidance. Since the report the stock has traded sideways, just under resistance, and is possibly topping out for the near to short term.

Oracle

This week Redhat followed up it's two rivals. The company reported better than expected revenue and earnings but still failed to excite investors. The company reported billings that were significantly lower than analysts expectations. The lower billings have been blamed by several analysts for recent downgrades to the stock. Share prices fell by more than 10% to come close to the 12 month low. Current consensus for the stock is market perform/equal weight with a price target around $57, well above the 12 month high. Revenue and earnings increased by more than 17% in the current quarter and are expected to continue increasing into the next by company management. The drop in prices and apparent improvements in revenue and earnings don't really add up in my mind, this could be a great buying opportunity for shorter term speculators and longer term investors. If share prices perform in a similar fashion to Oracle following its last two down gaps we could expect a 5-10% upside from the current low levels.

Redhat

The U.S. Treasury announced this morning that it was selling more of its stake in GM. This is the third sale of GM shares by the Treasury and possibly the last. At the time of the announcement the Treasury still owned over 100 million shares. It was not announced if they were planning to sell all of the shares or if all they were selling were going to be sold at this time. Since today's volume in GM was less than 20 million I will assume the Treasury did not sell out of it's position. GM trade to the downside today but held it's ground near it's recent (post restructuring) all time high.

GM

Jamie Daimon was reported visiting the Department of Justice this morning. This is in response to pending penalties stemming from the sub-prime mortgage crisis. The visit raised a lot of speculation over what was afoot with most agreeing that Jamie would be seeking a deal with the DOJ. The nature of the deal is not known at this time but could bring the cost of settlement to near $11 billion dollars. One potential outcome of the deal would be for JP Morgan to be immune from further lawsuits once the a deal was settled upon. Shares of JP Morgan moved higher on the news only to fall back later in the day. The stock is sitting just above the $50 level, a level indicated as strong support.

JP Morgan

Index Rundown

Although I primarily am interested in the S&P 500 I like to check up on the other indices from time to time to gain perspective. Each index is made of different types of companies and attract different kinds of investors. Today I will start with the Russell 2000. This index is broadest and most representative of the U.S. market. This index is trading near all time highs with bullish technicals. The MACD is bullish but in declining, stochastic is above the upper boundary line but oversold in the near term. The long term trend is still up with short term support at 1060, 1050 and 1035.

Russell 2000

The Nasdaq Composite is up next. This is another very broad, yet technology heavy, index. This one has been a leader over the past few months and is also trading at 13 year highs. This index even touched the 13 year intra-day high in today's trading. Indicators here are also bullish and also in decline. The candles from the last two weeks suggest a possible near to short term top may be in place. Looking back over the last few peaks in price there are significant divergences from MACD. These point to declining long term momentum and possible correction/consolidation. A break above 3780 would be bullish. Support exists around 3600 and 3500.

Nasdaq Composite

Next up is the Dow Jones Industrial Average. This is the smallest index but important for the sheer size of the businesses involved. This index has been trending sideways over the last 5 months while the broader RUT and COMP have been making new highs. This index has also made new highs but to date the last two peaks were whipsaws outside the current range. The longer term MACD analysis is convergent with higher prices even though the index is moving down at this time. Momentum is currently declining from an extreme peak, near to crossing into bearishness. Stochastic is pointing down and crossing below the upper signal line. Nearer term fears may keep this index range bound until the longer term trends can take over, providing the index is not at a longer term top. Current support exists at the short term moving average, a drop below this level has a target around 14750-15000 level. Resistance is at the top of the range around 15,500. The ten month trend line is also in question. Failure to regain trend would add pressure and help keep the index within the range.

Dow Jones Industrial Average

As a group it looks as if the other major U.S. indices are trending to up to sideways. It also looks as if they are all cresting a short term top with the potential for a larger downward movement. Long term trends are still intact although the Dow looks as if it could break trend. The S&P is also still trending up and has recently crested a new high. The index is now trading at support with bullish momentum. Momentum is in decline, stochastic is moving below the upper signal line but while the index remains above support this looks like consolidation following the recent break above 1,700. If the S&P moves lower it will find support in the 1675-1690 level and then just below that at the long term trend line.

S&P 500

There is a lot of noise in the markets today. On one hand we have a simmering IPO and M&A scene, on the other there is the Debt Ceiling Debate and impending government shut down. In between all of that is the economy, tapering and Obamacare. Longer term the economy is getting better. This should keep the long term trends up so long as future out look does not deteriorate. Increasing employment (evidenced at the time by decreasing unemployment claims) leads me to think that the economic trends will continue as is for now. In the meantime short term fears may weigh heavily on the markets. And I haven't even mentioned earnings season yet. Even though the season is upon us the real giants don't start reporting until week after next. Monday after next is Alcoa, Friday after next is Wells Fargo and JP Morgan.

Until then, remember the trend!

Thomas Hughes


New Option Plays

Aviation & Software

by James Brown

Click here to email James Brown

Editor's Note:

In addition to tonight's new candidate(s), consider these stocks as possible trading ideas and watch list candidates. Some of these stocks may need to see a break past key support or resistance:

(bullish ideas)
IWM, WSO, CRR, EQT, RTN, TWX, RS, TJX, SHW, TM, ROP, RAX, JAZZ, TSCO, MELI, ILMN.



NEW DIRECTIONAL CALL PLAYS

Boeing Co. - BA - close: 119.38 change: +0.87

Stop Loss: 117.75
Target(s): 127.50
Current Option Gain/Loss: Unopened
Time Frame: Exit prior to Oct. 23 earnings announcement
New Positions: Yes, see below

Company Description

Why We Like It:
The defense-related names are on the rise again. While many in the group saw a pullback in mid September, shares of BA managed to weather the industry decline with only a minor drop. BA does more than make military equipment. Wall Street seems to be immune to the monthly, if not weekly, headlines regarding technical difficulties with BA's 787 Dreamliner planes. On the subject of commercial aviation there was a new study out this week. According to French aviation giant Airbus, their global market forecast said, "In the next 20 years, air traffic will grow at 4.7 percent annually, requiring over 29,220 new passenger and freighter aircraft valued at nearly $4.4 trillion." That's a lot of new planes!

Right now BA is consolidating sideways below resistance near the $120 level. The September 19th high was $120.38. I am suggesting a trigger to buy calls at $120.50. If triggered our target is $127.50 but we will plan on exiting positions prior to BA's earnings report in late October.

Trigger @ 120.50

- Suggested Positions -

Buy the NOV $125 call (BA1316K125) current ask $1.66

Annotated Chart:

Entry on September -- at $---.--
Average Daily Volume = 4.5 million
Listed on September 26, 2013


Workday, Inc. - WDAY - close: 82.37 change: +2.10

Stop Loss: 79.75
Target(s): 89.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
WDAY is part of the new cloud-based application software industry. Wall Street is pretty bullish on the stock. Just the last four weeks have seen multiple firms raise their price targets on WDAY. Yet there are some investors who believe the stock has gone too far too fast. Unfortunately for the shorts WDAY continues to climb. The stock could actually see a short squeeze. The most recent data listed short interest at 18% of the 65.2 million share float.

On a short-term basis WDAY has been bouncing off its rising 10-dma and look poised to hit new highs soon. Today's intraday high was $82.55. I am suggesting a trigger to buy calls at $82.75. If triggered our target is $89.00.

Trigger @ 82.75

- Suggested Positions -

Buy the Dec $90 call (WDAY1322L90) current ask $2.80

Annotated Chart:

Entry on September -- at $---.--
Average Daily Volume = 1.2 million
Listed on September 26, 2013



In Play Updates and Reviews

Stocks Snap 5-Day Losing Streak

by James Brown

Click here to email James Brown

Editor's Note:

The S&P 500 index ended a five-day losing streak with today's +0.3% gain. Meanwhile both the NASDAQ composite and the small cap Russell 2000 index look poised to breakout to new highs.

JAH has been removed. N was closed this morning.
ATK and COO have been stopped out.


Current Portfolio:


CALL Play Updates

Actavis, Inc. - ACT - close: 142.67 change: +3.58

Stop Loss: 135.75
Target(s): 148.50
Current Option Gain/Loss: +13.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/26/13: ACT shot higher this morning and finally broke away from resistance near the $140 level. The stock outperformed the broader market with a +2.5% gain and closed at new all-time highs.

- Suggested Positions -

Long Oct $145 call (ACT1319j145) entry $1.50*

09/25/13 new stop loss @ 135.75
09/21/13 Shares of ACT were volatile right at the closing bell on Friday (09/20/13). Expected more volatility on Monday morning
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on September 19 at $139.50
Average Daily Volume = 985 thousand
Listed on September 18, 2013


Anadarko Petroleum - APC - close: 94.48 change: -0.35

Stop Loss: 92.25
Target(s): 99.50
Current Option Gain/Loss: -30.4%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
09/26/13: Hmm... APC underperformed the energy group and the broader market with a -0.3% decline. I didn't see anything to account for today's relative weakness. Shares did find some short-term support near the rising 20-dma. I am not suggesting new positions.

- Suggested Positions -

Long Oct $95 call (APC1319j95) entry $3.05*

09/21/13 new stop loss @ 92.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on September 11 at $94.25
Average Daily Volume = 2.55 million
Listed on September 09, 2013


3D Systems - DDD - close: 55.69 change: +0.73

Stop Loss: 52.48
Target(s): 59.75 & 64.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks and two-to-three months
New Positions: Yes, see below

Comments:
09/26/13: DDD spent today slowly drifting higher yet shares failed to breakout past Tuesday's high. I don't see any changes from my earlier comments.

Earlier Comments:
DDD could see a short squeeze. The most recent data listed short interest at 33% of the 94.5 million share float. Tuesday's high was $56.23. We are suggesting a trigger to buy calls at $56.35. If triggered our short-term target is $59.75. Our longer-term target is $64.00. The Point & Figure chart for DDD is bullish with a $71 target.

Trigger @ 56.35

- Suggested Positions -

Buy the NOV $60 call (DDD1316k60) current ask $2.55

- or -

Buy the 2014 Jan $60 call (DDD1418a60) current ask $4.30

Entry on September -- at $---.--
Average Daily Volume = 4.1 million
Listed on September 24, 2013


Hanesbrand Inc. - HBI - close: 63.17 change: +0.74

Stop Loss: 62.25
Target(s): 68.50
Current Option Gain/Loss: -35.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/26/13: Looking at HBI's intraday chart today's move doesn't look like much, just a sideways churn near $63.00. Yet HBI outperformed the major indices with a +0.74% gain. I remain cautious here given Wednesday's intraday reversal lower.

Earlier Comments:
The late July high near $65.60 could be short-term overhead resistance. I would not be surprised to see HBI stall or pullback on its initial test of this level.

- Suggested Positions -

Long Oct $65 call (HBI1319j65) entry $1.40

09/21/13 new stop loss @ 62.25

Entry on September 16 at $63.25
Average Daily Volume = 612 thousand
Listed on September 10, 2013


Magna Intl. - MGA - close: 83.84 change: -0.16

Stop Loss: 81.90
Target(s): 89.50
Current Option Gain/Loss: - 8.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/26/13: MGA did not participate in the stock market's bounce today. Shares continue to churn between resistance near $85.00 and short-term support at the 10-dma.

- Suggested Positions -

Long Oct $85 call (MGA1319j85) entry $1.20

09/21/13 new stop loss @ 81.90
09/16/13 trade opened on gap higher at $82.76
trigger was $82.65

Entry on September 16 at $82.76
Average Daily Volume = 545 thousand
Listed on September 14, 2013


Northrop Gruman - NOC - close: 96.37 change: +0.64

Stop Loss: 94.95
Target(s): 99.50
Current Option Gain/Loss: (Oct97.5c:+118.1%) & 2014j100c: - 8.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/26/13: It looks like the correction lower in the defense stocks might be over. NOC added +0.66% today and looks poised to challenge its recent highs.

- Suggested Positions -

Oct $97.50 call (NOC1319j97.5) entry $1.10 exit $2.40*(+118.1%)

- or -

Long 2014 Jan $100 call (NOC1418a100) entry $2.16

09/25/13 new stop loss @ 94.95
09/18/13 closed the Oct. $97.50 calls @ the open
*option exit price is an estimate since the option did not trade at the time our play was closed.
09/17/13 prepare to exit the Oct. $97.50 calls at the open tomorrow
09/17/13 new stop loss @ 94.75, adjust exit target to $99.50
09/16/13 new stop loss @ 94.25
09/14/13 new stop loss @ 93.30

Entry on September 12 at $95.25
Average Daily Volume = 1.2 million
Listed on September 11, 2013


Starbucks Corp. - SBUX - close: 77.18 change: +0.84

Stop Loss: 73.90
Target(s): 79.00
Current Option Gain/Loss:(Oct75c:+ 93.2%) & 2014Jan75c: +55.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/26/13: SBUX displayed some relative strength today with a +1.1% gain. Shares look poised to test the $78 level soon. More conservative traders might want to raise their stop. I am not suggesting new positions at this time.

- Suggested Positions -

Oct $75 call (SBUX1319j75) entry $1.18 exit $2.28 (+93.2%)

- or -

Long 2014 Jan $75 call (SBUX1418a75) entry $3.25

09/19/13 new stop loss @ 73.90
09/18/13 new stop loss @ 73.40, adjust exit to $79.00
this morning we closed the Oct. $75 calls at the open.
09/17/13 prepare to exit the October $75 calls at the open tomorrow
09/17/13 new stop loss @ 72.40
09/14/13 new stop loss @ 71.75
09/11/13 SBUX at new highs. Cautious traders may want to lock in some gains.

Entry on September 05 at $72.35
Average Daily Volume = 3.0 million
Listed on September 04, 2013


SouFun Holdings - SFUN - close: 49.29 change: -0.71

Stop Loss: 47.90
Target(s): 57.50
Current Option Gain/Loss: -42.8%
Time Frame: exit prior to October expiration
New Positions: see below

Comments:
09/26/13: Yesterday SFUN looked poised to rally but the move may have been short circuited today due to a drop in the Chinese markets. The Shanghai index lost almost -2% today.

I am still suggesting readers wait for a rise past $51.00 before launching new positions.

Earlier Comments:
This is an aggressive, higher-risk trade. I am suggesting we use small positions to help limit our risk. The recent high near $53.50 could be resistance but we're aiming for $57.50. The Point & Figure chart for SFUN is bullish with a $63 target.

*small positions* - Suggested Positions -

Long Oct $55 call (SFUN1319j55) entry $1.75*

09/24/13 trade opened on gap higher at $51.14. Trigger was 51.10
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on September 24 at $51.14
Average Daily Volume = 1.2 million
Listed on September 23, 2013


PUT Play Updates

Energizer Holdings - ENR - close: 93.25 change: +1.13

Stop Loss: 94.65
Target(s): 88.00
Current Option Gain/Loss: -40.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/26/13: Our plan was to open positions this morning. ENR gapped open higher at $92.36 and eventually closed with a +1.22% gain. While shares did outperform the broader market today's move was stuck inside of yesterday's trading range. That makes today an "inside day" and suggest investor indecision. The overall trend (down) remains in effect.

Readers could wait for a new failed rally in the $93.50-94.00 zone as a new entry point for bearish positions.

- Suggested *Small* Positions -

Long Oct $90 PUT (ENR1319v90) entry $1.00

Entry on September 26 at $92.36
Average Daily Volume = 424 thousand
Listed on September 25, 2013


The Fresh Market, Inc. - TFM - close: 47.72 change: +0.44

Stop Loss: 50.05
Target(s): 42.00
Current Option Gain/Loss: -33.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/26/13: TFM gapped open higher at the open as the stock reacted to new of a new "buy" rating. Yet the rally attempt failed near its descending 10-dma. Today's low was $47.35. Readers could wait for a drop under today's low as a new entry point for bearish positions.

Earlier Comments:
Our target is $42.00. I am suggesting we keep our position size small because TFM can be a little bit volatile. Plus the most recent data listed short interest at 13% of its small 40.1 million share float. FYI: The Point & Figure chart for TFM is bearish with a $39 target.

- Suggested Positions -

Long Oct $45 PUT (TFM1319v45) entry $0.45

Entry on September 25 at $47.50
Average Daily Volume = 591 thousand
Listed on September 16, 2013



Longer-Term Play Updates



Chicago Bridge & Iron - CBI - close: 67.09 change: +1.25

Stop Loss: 59.75
Target(s): 74.50
Current Option Gain/Loss: +84.3%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
09/26/13: CBI is back to showing relative strength again. The stock added +1.89% and set a new all-time closing high today.

I am not suggesting new positions at this time.

*Small Positions* - Suggested Positions -

Long 2014 Jan $65 call (CBI1418A65) entry $2.55

09/21/13 new stop loss @ 59.75
09/11/13 new stop loss @ 57.65
07/20/13 new stop loss @ 55.75
06/29/13 CBI might be poised to dip into the $57-55 zone again.
06/24/13 triggered @ 56.75
06/22/13 adjust entry trigger to $56.75
06/15/13 entry strategy change: change the breakout trigger at $65.25 to a buy-the-dip trigger at $56.50. Adjust the stop loss to $53.75.
Adjust the option strike to the 2014 Jan. $65 call

Entry on June 24 at $56.75
Average Daily Volume = 1.8 million
Listed on June 01, 2013


Vanguard FTSE Europe ETF - VGK - close: 54.83 change: -0.02

Stop Loss: 50.95
Target(s): 58.50
Current Option Gain/Loss: +16.6%
Time Frame: exit PRIOR to 2014 March option expiration
New Positions: see below

Comments:
09/26/13: Most of the major European stock markets closed in the red today. The VGK spent the day churning sideways. This ETF has been drifting sideways in the $54.60-55.00 zone for the last four sessions. I am not suggesting new positions at this time.

Earlier Comments:
We are taking a multi-month time frame with this trade. If we are triggered our target is $58.50 but we'll adjust it as the trade progresses. FYI: The Point & Figure chart for VGK is bullish with a $63 target.

- Suggested Positions -

Long 2014 Mar $55 call (VGK1422L55) entry $1.80*

09/11/13 trade opens. VGK @ 53.60
*option entry @ 1.80 is an estimate. Ask closed at $1.75 yesterday
09/10/13 entry trigger met. open positions tomorrow.
09/10/13 new stop loss @ 50.95
08/24/13 adjust the option strike from 2013 Dec $55 to $2014 Mar $55.

Entry on September 11 at $---.--
Average Daily Volume = 3.0 million
Listed on August 10, 2013


CLOSED BULLISH PLAYS

Jarden Corp. - JAH - close: 48.35 change: -0.30

Stop Loss: 47.75
Target(s): 54.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/26/13: JAH is not cooperating. Big picture the stock continues to look bullish but short-term JAH is still retreating from round-number, psychological resistance near $50.00. Our trade has not opened yet with the entry trigger at $50.25. Tonight we are removing JAH as an active candidate.

I would keep JAH on your radar screen for a breakout past $50.00.

Trade did not open.

09/26/13 removed from the newsletter. Trigger was $50.25

chart:

Entry on September -- at $---.--
Average Daily Volume = 1.9 million
Listed on September 21, 2013


NetSuite Inc. - N - close: 109.65 change: +1.15

Stop Loss: 104.75
Target(s): 109.75
Current Option Gain/Loss: +89.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/26/13: Yesterday N cam within 20 cents of our exit target at $109.75 and then reversed. We decided last night to exit immediately at the open this morning to lock in gains. Yet if we had stuck to our guns and held the trade as planned N would have hit our exit target anyway.

N did gap open 17 cents to $108.67 this morning. Our option trade closed at $5.20. If we had held on it would have been about $5.70.

- Suggested Positions -

Oct $105 call (N1319j105) entry $2.75* exit $5.20 (+89.0%)

09/26/13 closed this morning.
09/25/13 prepare to exit at the open tomorrow morning
09/18/13 new stop loss @ 104.75, adjust exit target to $109.75
09/17/13 new stop loss @ 103.75
09/14/13 new stop loss @ 102.40
09/12/13 readers may want to take profits now
09/11/13 new stop loss @ 101.45
09/10/13 new stop loss @ 99.45
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on September 09 at $101.05
Average Daily Volume = 294 thousand
Listed on September 03, 2013


CLOSED BEARISH PLAYS

Alliant Techsystems - ATK - close: 98.32 change: +1.18

Stop Loss: 98.05
Target(s): 90.25
Current Option Gain/Loss: -60.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/26/13: The defense-related names are starting to show relative strength again. While ATK was underperforming its peers the stock has produced a three-day bounce. Today's rebound (+1.2%) was enough to cross a short-term trend line of resistance and hit our stop loss at $98.05. The industry is starting to look bullish again.

Earlier Comments:
I do consider this a slightly more aggressive, higher-risk trade.

- Suggested Positions -

Oct $95 PUT (ATK1319v95) entry $2.80 exit $1.10 (-60.7%)

09/26/13 stopped out
09/24/13 new stop loss @ 98.05

chart:

Entry on September 23 at $94.75
Average Daily Volume = 434 thousand
Listed on September 21, 2013


The Cooper Companies - COO - close: 129.98 change: +0.74

Stop Loss: 130.25
Target(s): 124.00
Current Option Gain/Loss: -37.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/26/13: The oversold bounce in COO continued on Thursday and shares traded above what should have been resistance near $130.00 and its 50-dma. Our new stop loss was hit at $130.25.

- Suggested Positions -

Oct $125 PUT (COO1319v125) entry $2.00 exit $1.25 (-37.5%)

09/26/13 stopped out
09/25/13 new stop loss @ 130.25, COO not cooperating.

chart:

Entry on September 24 at $128.90
Average Daily Volume = 280 thousand
Listed on September 23, 2013