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Daily Newsletter, Tuesday, 12/9/2014

Table of Contents

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

Market Wrap

Volatility Jolt

by Jim Brown

Click here to email Jim Brown

The market open was better than a triple cappuccino at producing a strong surge of adrenaline for traders long the market.

Market Statistics

The carnage started overseas when China changed the collateral requirements to buy stocks. They said only AAA or AA bonds could be used as margin collateral. This was the equivalent of raising margin requirements for all Chinese investors. The Shanghai Composite declined -8% before rebounding slightly to close down -5.4% or the equivalent of -960 Dow points. This was the biggest drop since the Great Recession.


Also disrupting markets was news of an early election in Greece and the potential for the radical left Syriza party to win. The Greek ASE crashed -12.8% or the equivalent of nearly -2,000 Dow points. This was the biggest drop in 27 years. Prime Minister Antonis Samaras called for a December vote in a political gamble. If the Syriza party wins they could walk away from the $297 billion Troika bailout program that ends this year and withdraw from the EU.


The declines overseas sent our markets into a panic decline with the Dow falling -222 points at its lows and the Nasdaq down -66. About 10:30 a monster rebound began to push the Nasdaq back into positive territory with a +26 point gain. The Dow was not so fortunate but still finished well off the lows at -51. There was a rumor Mario Draghi was talking up QE for Europe again but I could not find any confirmation.

The financial uncertainty saw investors fleeing into bonds to push the yield on the ten-year down to 2.187% at its lows. As the equity markets recovered the yield rose to 2.23%.


With the drop in oil prices and the turmoil in the overseas markets there is almost no way the Fed can raise rates until late 2015 or even 2016. Every day another analyst pushes his expected rate hike date farther into the future.

On the U.S. economic front the NFIB Small Business Optimism Index rose +2 points. The headline number rose from 96.1 to 98.1 and a new cyclical high. That is the highest level since February 2007. The largest number of respondents since November 2010 at 13% expect the economy to improve over the next six months. That was a 16 point improvement over the prior month and the largest jump since April 2009. Those planning on hiring rose from 10% to 11% and those planning on capex expenditures declined only slightly from 26% to 25%.

The Job Openings and Labor Turnover Survey (JOLTS) for October showed the available jobs increased slightly from 4.7 million to 4.8 million. The openings rate rose to 3.3%. Hires declined from 5.075 million to 5.056 million. Separations increased from 4.809 million to 4.824 million. Quits declined from 2.735 million to 2.72 million. Layoffs increased from 1.653 million to 1.7 million.

While the headline number appeared to show a positive improvement the internal components above showed a negative bias. This report is ignored by the market because it is lagging data from two months ago.

The calendar for Wednesday has nothing of importance for the market. Thursday provides a little more with the Retail Sales for November as the highlight.

The big event is still the FOMC meeting for next week. We are likely to see the end of the "considerable period" language and investors will want to see how they word the replacement phrase.


Helping crush the Dow this morning was a -4% drop in Dow component Verizon. The company said it was losing customers because of increased competition and it will become more aggressive to counter promotions by rivals. This will pressure earnings in Q4. The company said customers are departing at a higher rate than they did in the prior three quarters. This higher churn rate is occurring despite a wider acceptance of 4G and upgrade from 3G phones. Last week Sprint advertised it would cut customer bills in half if they would switch from AT&T and Verizon.

Cowen & Company said "value oriented customers" appear to be shifting to T-Mobile and Sprint while Verizon and AT&T continue to battle over higher spenders. Verizon declined -$2 to account for -16 Dow points and AT&T lost $1 for -8 Dow points. Shares in all the carriers declined on worries over a 2015 price war. AT&T fell -3%, Sprint -4% and T-Mobile -5.4%.


Dow component Merck (MRK) fell -$2 after the company said it was still committed to the Cubist (CBST) acquisition despite a court ruling that will allow faster generic replacements for their best selling product. Cubicin is the largest selling product for Cubist and used to fight skin infections. However, a district judge in Delaware invalidated 4 Cubicin patents and ruled that Hospira can offer a generic replacement as early as 2016, some 2 years earlier than expected. Merck said it was considering an appeal of the decision. MRK lost -$2 or -16 Dow points.


Citigroup warned on Q4 earnings saying they would take a $3.5 billion charge for various problems. They will take a $2.7 billion charge for settling foreign exchange, LIBOR and money laundering cases. They will take another $800 million in charges for closing down some overseas operations in a restructuring effort to shrink its global footprint. The charges will basically erase any chance for a material profit in Q4. All of these issues are well known but apparently Citigroup had underestimated the legal ramifications and the extent of the potential fines. Citi also said revenue would decline about 5%. Citi shares declined slightly.


Bank of America (BAC) warned lower trading revenue in Q4 would pressure earnings. The CEO said low trading volume was only one of the revenue headwinds that were facing the bank in Q4. The COO said he had cut costs in the markets division reducing the amount of trading revenue needed to break even from $3.5 billion to $2.5 billion. Shares declined slightly on the news.


Bluebird Bio (BLUE) spiked 72% to $84 after reporting a successful trial for a gene therapy that will allow patients with anemia and low hemoglobin to skip blood transfusions. Patients in the trial were able to go 5 months or more without a transfusion. The company extracts blood stem cells from the patient and then corrects the defective gene and the blood is re-injected back into the patient where the new gene performs correctly.


Beleagered CEO Michael Jefferies, who topped several polls as the worst CEO, abruptly resigned from Abercrombie & Fitch. The resignation was immediate. Falling sales, repeated scandals, stiffer competition and changing tastes finally took its toll on Jefferies. Activist hedge funds had lobbied for him to be replaced after he said ANF goes after "attractive kids who can fit into our clothes" and alienated millions of customers. He will get $5.5 million in severance benefits. His employment contract was not up until February so odds are good sales are not doing well this quarter. Shares rallied +8% on the news.


After the bell YUM Brands (YUM) slashed its outlook for Q4 and the full year saying sales were not recovering quickly from a food scare in China. The company cut its full year profit growth to 5%, down from the 6-10% prior estimate and the "at least 20%" forecast from earlier in the year. YUM and MCD both suffered after a meat processor in China was found to be selling out of date meat. This scared away customers once again. A similar scare last year took almost a year to recover. Food safety and cleanliness in China has a very bad record. YUM shares declined -6% in afterhours.


Conn's Inc (CONN) cancelled its 2015 guidance saying credit delinquencies were a growing problem. The company also said the COO would be leaving immediately and that is not a good sign. Two months ago Conn's said it was investigating strategic alternatives including a possible sale. Conn's missed on Q3 earnings on both revenue and earnings with the credit division posting a -$33.2 million loss. Shares fell -41%.


Late in the afternoon the Federal Reserve said it was going to assess capital surcharges for banks deemed too big to fail starting in January 2016. The 8 banks named were JPM, BK, C, BAC, GS, MS, STT and WFC. The surcharges would range from 1.0% to 4.5% of risk weighted assets annually.

Here is the kicker. In the press release the Fed said net capital shortfall for the 8 banks mentioned was $21 billion. That means they have to come up with $21 billion in additional capital by the end of 2019. However, during a Fed conversation the Vice Chair, Stanley Fischer, said $22 billion of that was additional capital required by JP Morgan. That means the entire $21 billion in the press release was actually all JP Morgan and the other banks actually have a small surplus in the aggregate. Since JP Morgan makes about $20 billion a year in profits they can accumulate that additional capital by retaining earnings until the total is reached.


Crude prices were stable today above $63 where WTI may be trying to put in a bottom. However, external events suggest this level may not hold. Kuwait Petroleum said prices would remain in the $65 range for at least half a year until OPEC cuts production or economic growth rebounds. Kuwait produces about 2.9 mbpd. Prices have declined about 40% from the highs in June. Economic weakness in Europe, China and Japan has reduced demand and analysts believe there is 1.8 million barrels per day of excess production.

Iraq followed Saudi Arabia in slashing prices to Asia offering the largest discount in 11 years. Iraq set the discount to $4 per barrel below the average of the Oman and Dubai grades. Those are the benchmark grades for the Middle East. Saudi Arabia announced a $2 discount about a month ago and that accelerated the selling in crude. That is the widest Saudi discount since June 2000.

OPEC produced 30.56 mbpd in November, down about 420,000 bpd from October. The U.S. produced 9.083 mbpd last week and that is the most since January 1983.

Some technicians are targeting $53.50 for WTI prices because bear markets in oil typically retrace 50% from their highs. With the high at $107 in June a 50% drop would take it back to that level. There is also support at the $57.50 level from the monthly lows in 2007. Either level would create an entirely new round of carnage in the energy sector.

Companies are already slashing capex plans with Conoco (COP) saying they will cut capex by -20% in 2015 and they are just one of many that have already announced. Drillers in the Bakken are saying there will be no more wells if the price falls under $60. Several other shale plays with breakeven numbers well over $70 will be shutting down even faster. For the shale producers in the Bakken their oil prices are already in that mid $50 level. Bakken crude was selling for $54 late last week. They have to discount it because of transportation issues from North Dakota. Getting only $54 per barrel definitely makes most new wells unprofitable.

There have been multiple rumors of a potential emergency OPEC meeting in either January or March. The next scheduled production meeting is on June 5th. Rumors are just rumors until something is actually announced. However, if OPEC does announce an emergency meeting I would go "all in" on energy stocks. There is no reason to call an emergency meeting except to cut production. Many of the OPEC nations are seriously suffering with prices this low. At least half of the 12 OPEC nations have budgetary problems with anything under $90 and we are way under $90 today.

These low prices are going to be self perpetuating because the only way to make up that lost revenue is to produce more oil. They will be pumping every barrel they can to offset the revenue decline.

On the positive side Goldman Sachs claims every 25 cent decline in gasoline creates another 500,000 bpd of demand. With gas down from $3.31 to $2.70 today that is more than one million barrels of additional demand. It does not happen overnight because it takes a while for driving habits to change. Once they do the change will last for a long time even if prices begin to rise. American consumers are saving $630 million a day compared to the price they paid in June. That would equate to a $230 billion windfall if prices stayed at this level for a year.

Energy insiders, officers in energy companies, are buying stocks at a frantic pace. Time Rochford, co-founder of Ring Energy said "this is an absolute fire sale. It is an overreaction and stocks are oversold." He is one of 118 energy insiders that have purchased shares in their companies in November. Bloomberg said it was the biggest wave of insider buying since 2012. The number of insider buys has increased +64% from last November and more than doubled the average from the first ten months of 2014. Lowes Corp, a major shareholder in Diamond Offshore bought 1.18 million shares in November and another 410,000 shares last week. The CEO of Lowes said the selloff in the industry will allow Diamond to acquire assets at a cheaper price. "Hopefully this will allow Diamond to acquire rigs at a discount." The chairman of Chesapeake Energy bought 500,000 shares and the most since he joined the board in 2012.

Energy earnings are expected to drop -15% in Q4 for the worst performance of any S&P sector.


Markets

The rebound today was very telling. It is one thing to sell off -66 points on the Nasdaq but when it is followed by an +91 point rebound that tells you all you need to know about the market. Dip buyers are alive and well and they showed up in volume. Everyone worried about the December rally at 10:AM had a completely different view by 4:PM.

The Dow did not make it back to positive territory because of the losses in Verizon, Merck, McDonalds, Coke and AT&T. Their -7 point collective loss knocked more than 50 points off the Dow and that is exactly where it closed at -51.

The highlight of the day was the Russell 2000. The Russell dropped -10 points at the open then rebounded to close up +21. That is a rebound to be proud of. The motivational factor there was the small gain in crude prices or maybe I should say the lack of a drop. The majority of energy stocks posted decent gains and there are a lot of energy stocks in the Russell 2000.


The Russell is typically weak in late November and early December and then rallies into yearend. This index has vaulted back into the leading indicator position for the rest of December. If the Russell can push through that overhead resistance it will probably lead the big cap indexes for the rest of the year.


The S&P crashed below support at 2,050 at the open but surged back from the 2,034 low to close at 2,060. That +26 point rebound was just enough to get it back to the flat line for the day but remarkable nonetheless. The close back above support at 2,050 was a milestone event. The morning drop cleared a lot of stop losses and weak holders and the rebound was on strong volume. The 7.3 billion shares was the second highest volume since October 31st.

I view the morning drop as a knee jerk reaction to China and Greece and nothing to do with our market fundamentals. I still see 2,050 as support and 2,075 as resistance.


The Dow has been whipped around by individual stocks for the last week. The big caps are still strong but the individual stories are causing havoc. Unfortunately those stories eventually begin to mount up and can cause a change in market sentiment. We have had multiple warnings from Dow stocks and we are starting to hear more and more comments about the strong dollar and weak European economics weighing on earnings. Let's hope that does not turn into a tsunami as we move farther into the earnings warning season.

The Dow did not make it back to positive territory but it did manage to close back above 17,800. That is a sentiment win for the bulls. We have several weak levels of support in the 17,725 to 17,775 range so a close over the round number gives us something to fall back to without damaging the prior trend.



The Nasdaq, like the Russell, rebound strongly from the gap down open. There was no doubt about the tech stocks. Only 15 lost more than $2 with quite a few gaining more than that. Amazon, Google, Netflix and Apple all participated in the rebound and all sectors appeared to participate. The biotech sector was the black sheep with a few losers.


The gap down open did not reach critical support at 4,650 but it did break interim support at 4,725 for most of the morning. The rebound to 4,766 quickly reestablished that level as support again for tomorrow.

I view this rebound as very bullish for the rest of the week as long as that 4,725 level is not violated again. If future gains can move over Monday's resistance at 4,790 then I would expect us to finish the week a lot higher.


I felt really depressed at the open today. I had visions of Greece and EU problems coming back to haunt us again. Fortunately at this point I don't think investors are really interested in what happens to Greece.

The big drop in China was overdue. The markets had been going vertical for the last two weeks and China simply reacted to tone down the irrational exuberance. No harm, no foul but their market weakness could last for several more days.

I still believe the historical trend for a bullish December will hold despite the non historical drag of Europe, Japan and China. Money is flowing into the U.S. from those areas as evidenced by the strength of the bond market. We are the best house on a bad block and that should lift our markets for the rest of the year.

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Enter passively, exit aggressively!

Jim Brown

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New Option Plays

Buying The Dip

by James Brown

Click here to email James Brown


NEW DIRECTIONAL CALL PLAYS

Starbucks Corp. - SBUX - close: 83.03 change: -0.77

Stop Loss: 79.90
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 4.0 million
Entry on December -- at $---.--
Listed on December 09, 2014
Time Frame: 8 to 12 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The world seems to have an insatiable appetite for coffee. Starbucks is more than happy to help fill that need. The first Starbucks opened in Seattle back in 1971. Today they are a global brand with locations in 66 countries. SBUX operates more than 21,000 retail stores with more than 300,000 workers.

A few years ago Business Insider published some facts on SBUX. The average SBUX customer stops by six times a month. The really loyal, top 20% of customers, come in 16 times a month. There are nearly 90,000 potential drink combinations at your local Starbucks. The company spends more money on healthcare for its employees than it does on coffee beans.

The company's earnings results have only been so-so this year. You can see the results in SBUX's long-term chart below. After incredible gains in 2013 SBUX has essentially consolidated sideways in 2014. The good news is that looks like it's about to change.

Five-Year Plan

SBUX recently announced their five-year plan to increase profitability. Here's an excerpt from a company press release:

"The seismic shift in consumer behavior underway presents tremendous opportunity for businesses the world over that are prepared and positioned to seize it," Schultz said (Howard Schultz is the Founder, Chairman, President, and CEO of Starbucks). "Over the next five years, Starbucks will continue to lean into this new era by innovating in transformational ways across coffee, tea and retail, elevating our customer and partner experiences, continuing to extend our leadership position in digital and mobile technologies, and unlocking new markets, channels and formats around the world. Investing in our coffee, our people and the communities we serve will remain at our core as we continue to redefine the role and responsibility of a public company in today's disruptive global consumer, economic and retail environments."

"Starbucks business, operations and growth trajectory around the world have never been stronger, and we are more confident than ever in our ability to continue to drive significant growth and meet our long term financial targets," said Troy Alstead, Starbucks chief operating officer. "We have more customers visiting more stores more frequently, both in the U.S. and around the world, than at any time in our history. And we expect both the number of customers visiting our stores and the amount they spend with us to accelerate in the years ahead. With a robust pipeline of mobile commerce innovations that will drive transactions and unprecedented speed of service, Starbucks is ushering in a new era of customer convenience. We believe the runway of opportunity for Starbucks inside and outside of our stores is both vast and unmatched by any other retailer on the planet."

The company believes they can grow revenues from $16 billion in FY2014 to almost $30 billion by FY2019. To do that they will expand deeper into regions like China, Japan, India, and Brazil. SBUX expects to nearly double its stores in China to over 3,000 locations in the next five years

They're also working hard on their mobile ordering technology to speed up the experience so customers don't have to wait in line so long at their busiest locations. This will also include a delivery service.

Part of the five-year plan is a new marketing campaign called Starbucks Evening experience. The company wants to be the "third place" between home and work. After 4:00 p.m. they will start offering alcohol, mainly wine and beer, in addition to new tapas-like smaller plates.

The company just launched its first ever Starbucks Reserve Roastery and Tasting Room in Seattle, near their iconic first retail store. The new roastery is supposed to be the ultimate coffee lovers experience. CEO Schultz said they will eventually open up about 100 of these Starbucks Reserve locations.

Wall Street is bullish on the stock. Several firms have upgraded shares recently. Carter Worth, chief market technician at Sterne Agee, thinks SBUX could rally +10% to +15% in the short-term. JP Morgan raised their price target to $89. Goldman Sachs just added SBUX to their conviction buy list with a $95 target. Piper Jaffray has a $100 target. The same analyst at Piper believes SBUX's stock could double in the next four years. The point & figure chart is bullish and forecasting at $105.00 target.

The breakout past its all-time highs set in Q4 of 2014 is very bullish. This pullback is a gift. Tonight we are suggesting a trigger to buy calls at $83.55.

Trigger @ $83.55

- Suggested Positions -

Buy the Feb $85 CALL (SBUX150220C85) current ask $2.08

Option Format: symbol-year-month-day-call-strike

Daily Chart:

Weekly Chart:



In Play Updates and Reviews

Updating Stop Losses

by James Brown

Click here to email James Brown

Editor's Note:

The stock market saw a sharp move lower this morning but dip buyers came out in force and equities pared their losses.

We did see FDX, NOC, and ZBRA hit our stop loss.

Tonight we are updating several stop losses.


Current Portfolio:


CALL Play Updates

Aetna Inc. - AET - close: 89.56 change: -0.56

Stop Loss: 87.65
Target(s): To Be Determined
Current Option Gain/Loss: +14.8%
Average Daily Volume = 2.45 million
Entry on December 03 at $88.65
Listed on December 02, 2014
Time Frame: Exit PRIOR to January expiration
New Positions: see below

Comments:
12/09/14: The stock market's widespread sell-off on Tuesday sent AET to short-term technical support at its rising 10-dma. Fortunately shares bounced and pared their loss to -0.6%.

Tonight we are raising the stop loss to $87.65.

Earlier Comments: December 2, 2014:
AET is in the healthcare sector. According to a recent press release, "Aetna is one of the nation's leading diversified health care benefits companies, serving an estimated 46 million people with information and resources to help them make better informed decisions about their health care. Aetna's customers include employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers, governmental units, government-sponsored plans, labor groups and expatriates."

If you study a one-year chart of AET the stock has definitely seen its ups and downs. That's because the healthcare industry has faced a number of issues. AET's CEO commented on this past year in their latest post-earnings conference call.

Mark T. Bertolini, Aetna chairman, CEO and president, said, "some of the challenges we face this year, including pricing solving for nearly $1 billion in ACA related industry fees and taxes, solving for the largest rate cuts to the Medicare Advantage program in our recent history, navigating a host of new regulatory requirements in our small group and individual businesses, managing through a turbulent launch in public exchanges and controlling pharmacy costs in a year where heavy priced Hepatitis C treatments first became available and treatment guidelines changed in unforeseen ways." (ACA stands for Affordable Care Act, a.k.a. Obamacare).

In spite of all these challenges shares of AET are outperforming the major indices with a +27% gain in 2014 compared to a +11% gain in the S&P 500. AET's strength is due to the company's earnings performance. They have beaten Wall Street's earnings estimates and raised guidance three quarters in a row.

AET's most recent quarterly report was October 28th. Analysts were expecting a profit of $1.58 a share on revenues of $14.7 billion. AET delivered a profit of $1.79 a share. Revenues were up +13% to match estimates. The company said they added 470,000 new medical insurance customers in the third quarter, putting the total at 23.6 million.

Bertolini commented on their results, "Aetna reported solid third-quarter results, including our 10th consecutive quarter of membership growth, record quarterly operating revenues, and continued high single-digit pretax operating margin."

The major healthcare companies are reaping the benefits of Obamacare as more people sign up. Management raised their full year 2014 earnings guidance into the $6.60-6.70 zone versus Wall Street's estimate of $6.57.

Just last month AET raised their quarterly dividend 11% to 25 cents a share and added $1 billion to its stock buyback program, up from $464 million. In the last two months the stock has received multiple price target upgrades into the $95-100 zone. The point & figure chart is bullish with a $112.00 target.

AET's bullish trend of higher lows has just produced a breakout past resistance to new all-time highs. Tonight we are suggesting a trigger to buy calls at $88.65.

- Suggested Positions -

Long 2015 Jan $90 call (AET150117C90) entry $1.76

12/09/14 new stop @ 87.65
12/03/14 triggered @ 88.65
Option Format: symbol-year-month-day-call-strike


CR Bard Inc. - BCR - close: 170.10 change: -2.58

Stop Loss: 169.45
Target(s): To Be Determined
Current Option Gain/Loss: +29.3%
Average Daily Volume = 538 thousand
Entry on November 13 at $165.65
Listed on November 12, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
12/09/14: BCR slipped -1.5% and spent most of the day hovering near support at $170.00. If shares breakdown further we want to be out. Tonight we're updating the stop loss to $169.45. I'm not suggesting new positions at this time.

Earlier Comments: November 12, 2014:
BCR is in the healthcare sector. The company makes medical supplies. According to the company website, "C. R. Bard, Inc. is a leading multinational developer, manufacturer, and marketer of innovative, life-enhancing medical technologies in the product fields of vascular, urology, oncology, and surgical specialty. BARD markets its products and services worldwide to hospitals, individual health care professionals, extended care facilities, and alternate site facilities."

The company has been on a roll with its earnings reports. BCR has beaten Wall Street's estimates on both the top and bottom line the last four quarters in a row. The last couple of quarters have seen some pretty big beats and management has raised guidance.

BCR's most recent earnings report was October 22nd. Wall Street expected a profit of $1.87 a share on revenues of $818.8 million. BCR said earnings rose +28% from a year ago to $2.15 a share. Revenues were up +9% to $830 million. Inside the U.S. net sales were up +13%. Management raised their Q4 EPS guidance above analysts' estimates.

The stock has been struggling to breakout past major resistance near the $150-155 range but the October earnings results launched shares of BCR higher. The last couple of weeks have seen BCR consolidating sideways under resistance near the $165.00 level. We think it's about to break out. The point & figure chart is bullish and forecasting at long-term target of $194.00.

Tonight we are suggesting a trigger to buy calls at $165.60

- Suggested Positions -

Long 2015 Jan $170 call (BCR150117c170) entry $2.63

12/09/14 new stop @ 169.45
12/01/14 new stop @ 165.85
11/22/14 new stop @ 163.35
11/13/14 triggered @ 165.65, suggested entry was $165.60
Option Format: symbol-year-month-day-call-strike


Deckers Outdoor Corp. - DECK - close: 97.61 change: -0.69

Stop Loss: 95.65
Target(s): To Be Determined
Current Option Gain/Loss: +36.8%
Average Daily Volume = 763 thousand
Entry on November 17 at $92.25
Listed on November 15, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
12/09/14: DECK found support near $96 and its 10-dma midday. The afternoon bounced trimmed its loss to -0.7%. Tonight we are moving the stop loss up to $95.65. I am not suggesting new positions.

Earlier Comments: November 15, 2014:
DECK is part of the consumer goods sector. The company owns a number of brands but for many Deckers means UGG. The iconic footwear line was started in 1978 in Southern California. Strength in the UGG line helped power the company's latest quarterly results.

According to the company website, "Deckers Brands is a global leader in designing, marketing and distributing innovative footwear, apparel and accessories developed for both everyday casual lifestyle use and high performance activities. The Company's portfolio of brands includes UGG, I HEART UGG, Teva, Sanuk, TSUBO, Ahnu, MOZO, and HOKA ONE ONE. Deckers Brands products are sold in more than 50 countries and territories through select department and specialty stores, 130 Company-owned and operated retail stores, and select online stores, including Company-owned websites. Deckers Brands has a 40-year history of building niche footwear brands into lifestyle market leaders attracting millions of loyal consumers globally."

The most recent earnings report was October 23rd. Analysts were expecting a profit of $1.03 per share on revenues of $457.2 million. DECK beat estimates with a profit of $1.17 a share. That's a +23.2% increase from the same period a year ago. Revenues soared +24.2% to a record $480.3 million. U.S. sales rose +21.1% and international sales surged +29.2%. E-commerce sales soared +45%.

It was DECK's Q2 and their gross profit rose +34% while gross margins increased 340 basis points to 46.6%. This was above estimates of 45% and above their gross margin a year ago of 43.2%. Management said all brands delivered a strong performance.

The company lowered their Q3 guidance (current quarter) to below Wall Street estimates. They also raised their Q4 and 2015 guidance on both the top and bottom line. DECK expects 2015 to see revenues up +15%, earnings up +15.8%, and gross margins around 49%. Last quarter the S&P 500 saw earnings growth of about +6.9%. DECK is clearly outgrowing the market with +23% growth. The S&P 500 is expected to see +10-11% growth in 2015.

Technically shares are poised for a breakout on both the daily chart and the point & figure chart. Looking at the point & figure chart (not shown), a breakout past $92.00 would generate a new triple-top breakout buy signal. A breakout could also spark some short covering. The most recent data listed short interest at 17% of the small 33.6 million share float.

Tonight we are suggesting a trigger to buy calls at $92.25. Such a move probably signals a run toward resistance near $100.00.

- Suggested Positions -

Long 2015 Jan $95 call (DECK150117c95) entry $3.80

12/09/14 new stop @ 95.65
11/29/14 new stop @ 93.65
11/22/14 new stop @ 89.75
11/17/14 triggered $92.25
Option Format: symbol-year-month-day-call-strike


DineEquity, Inc. - DIN - close: 99.55 change: +0.38

Stop Loss: 96.85
Target(s): To Be Determined
Current Option Gain/Loss: +266.7%
Average Daily Volume = 154 thousand
Entry on November 05 at $91.55
Listed on November 04, 2014
Time Frame: Exit PRIOR to December 20th option expiration
New Positions: see below

Comments:
12/09/14: DIN dipped to last week's low near $97.50 and bounced. Shares managed to post a gain on the session. DIN now looks poised to breakout past resistance at $100 soon.

I'm not suggesting new positions at the moment. Keep in mind that our December options expire relatively soon.

Earlier Comments: November 4, 2014:
Restaurant stocks were showing relative strength today. Better than expected earnings results from the likes of Red Robin (RRGB) and Bloomin Brands (BLMN) helped buoy the group. Additional stocks in this industry showing relative strength on Tuesday are: BWLD, PNRA, JACK, EAT, SONC, TXRH, KKD, DNKN, CAKE, DRI, and PBP. The one we like tonight is DIN.

According to a company press release, "Based in Glendale, California, DineEquity, Inc., through its subsidiaries, franchises and operates restaurants under the Applebee's Neighborhood Grill & Bar and IHOP brands. With more than 3,600 restaurants combined in 19 countries, over 400 franchisees and approximately 200,000 team members (including franchisee- and company-operated restaurant employees), DineEquity is one of the largest full-service restaurant companies in the world."

The company has seen success with a steady improvement in earnings. DIN has beaten Wall Street's estimates on both the top and bottom line three quarters in a row. Their most recent report was October 28th. Analysts were looking for a profit of $1.05 a share on revenues of $157.2 million. DIN served up $1.14 per share with revenues climbing to $162.85 million.

The company saw domestic system-wide same-store sales up +2.4% at IHOP and +1.7% at Applebee's. Management then raised their sales guidance on both Applebee's and IHOP. DIN also raised its dividend by 17% to $0.875 per share and they boosted their stock buyback program from $40 million to $100 million.

The restaurant industry should be a major beneficiary of the drop in oil prices. Lower gasoline prices at the pump mean consumers have more spending money and will likely burn a lot of that cash eating at restaurants.

Shares broke out to new highs on this earnings report and bullish guidance. Today the stock is at all-time highs. The point & figure chart is bullish and forecasting a long-term target at $118.00.

Tonight we are suggesting a trigger to launch bullish positions at $91.55.

- Suggested Positions -

Long DEC $95 call (DIN141220c95) entry $1.20

12/06/14 only two weeks left on our December options
11/29/14 new stop @ 96.85
11/26/14 new stop @ 94.85, traders may want to take profits here!
11/22/14 new stop @ 93.85
11/19/14 new stop @ 92.75
11/13/14 new stop @ 92.25
11/12/14 new stop @ 91.45
11/08/14 new stop @ 89.65
11/05/14 triggered @ 91.55
Option Format: symbol-year-month-day-call-strike


The Walt Disney Co. - DIS - close: 92.94 change: -0.86

Stop Loss: 91.65
Target(s): To Be Determined
Current Option Gain/Loss: - 5.0%
Average Daily Volume = 6.5 million
Entry on December 01 at $92.63
Listed on November 29, 2014
Time Frame: exit prior to February expiration
New Positions: see below

Comments:
12/09/14: This morning's market sell-off sent DIS toward short-term support near $92.00. The stock actually bounced at $91.76. We are going to try and reduce our risk by raising the stop loss to $91.65.

The intraday bounce from $92.00 looks like a new bullish entry point but traders may want to make sure both DIS and the S&P 500 are both positive tomorrow morning before initiating new positions.

Earlier Comments: November 29, 2014:
Disney is an American icon. The company is over 90 years old. They have grown into a massive content generating giant. Today DIS runs five business segments. Their media networks include broadcast, cable, radio, publishing, and digital businesses headlined by their Disney/ABC television group and ESPN Inc. DIS' parks and resort business includes Disneyland, Disneyworld, plus theme parks in Tokyo, Paris, Hong Kong, Shanghai, and a cruise line.

The company's products division licenses the company's horde of names, characters, and intellectual property to a wide range of products. They've also jumped into the online world with their Disney Interactive division. Last but not least is the Walt Disney Studios segment. Disney started making movies 90 years ago. Today their studio business includes Disney animation, Pixar Animation, Disneynature, Disney Studios Motion Pictures, Disney music group, Touchstone Pictures, and Marvel Studios.

Their movie business has been a money maker over the years with huge hits like the Pirates of the Caribbean franchise, Tangled, Wreck-it Ralph. Last year they released the animated film "Frozen", which has turned into the largest grossing animated movie of all time. Pixar has a stable of successful movies that have grossed almost $9 billion. DIS is also mining gold in Marvel Entertainment's library of over 8,000 characters of comic book history. Marvel had two big hits this year Captain America: Winter Soldier and Guardians of the Galaxy.

Back in 2012 Disney purchased Lucasfilm and all the Star Wars properties from George Lucas for $4 billion. The company is busy filming the next three episodes of the Star Wars franchise. This weekend DIS released the teaser trailer for episode 7, The Force Awakens. It has been shocking to see just how much hype and buzz this teaser has generated. There are stories and links to this trailer just about everywhere you go on the Internet this weekend. It has reawakened fan interest in the Star Wars story and DIS has a whole year to feed the hype until episode seven's release in December 2015. Analysts are already predicting that "The Force Awakens" will generate $1.2 billion at the global box office.

I expanded on the movie business above because it was Disney's studio segment that really drove earnings last quarter. DIS has been beating Wall Street's estimates on both the top and bottom line four quarters in a row. The most recent earnings report was November 6th (DIS' Q4). Analysts were expecting a profit of $0.88 a share on revenues of $12.37 billion. DIS reported $0.89 a share with revenues rising +7.1% to $12.39 billion. The movie division saw its quarterly revenues soar +18% to $1.8 billion. Altogether the company reported record-breaking revenues for all five businesses in 2014.

The correction in DIS' stock from the September highs to the October lows was painful but shares have come roaring back. Now after consolidating sideways between $88.75 and $92.00 this last month the stock is rested and ready to run. The breakout past resistance at $92.00 looks like an entry point to buy calls.

I suspect the $100.00 level could be round-number, psychological resistance but the point & figure chart is very bullish and forecasting a long-term $119.00 target. Tonight we are suggesting traders buy calls on Monday morning at the opening bell.

- Suggested Positions -

Long 2015 Feb $95 call (DIS150220C95) entry $1.80

12/09/14 new stop @ 91.65
12/01/14 trade begins. DIS opens at $92.63
Option Format: symbol-year-month-day-call-strike


The Hain Celestial Group, Inc. - HAIN - close: 114.06 change: -1.22

Stop Loss: 111.35
Target(s): To Be Determined
Current Option Gain/Loss: +58.3%
Average Daily Volume = 615 thousand
Entry on November 26 at $110.25
Listed on November 25, 2014
Time Frame: Plan on exiting PRIOR to the stock split
New Positions: see below

Comments:
12/09/14: Traders bought the dip in HAIN today near its rising 10-dma. Shares managed to end the session with only a -1% decline. We are going to try and reduce our risk by raising the stop loss up to $111.35.

I am not suggesting new positions at this time.

Earlier Comments: November 25, 2014:
"Our business continues to benefit from strong growth trends in the organic and natural, better-for-you segment of consumer packaged goods."

That quote is from HAIN's CEO after the company reported its latest earnings results in early November. He's right. Consumers are choosing healthier foods and it looks like a major trend change that could benefit HAIN for a long time.

The company website describes HAIN as, "The Hain Celestial Group, headquartered in Lake Success, NY, is a leading natural and organic food and personal care products company in North America and Europe. Hain Celestial participates in almost all natural food categories with well-known brands that include Celestial Seasonings, Terra, Garden of Eatin', Health Valley, WestSoy, Earth's Best, Arrowhead Mills, DeBoles, Hain Pure Foods, FreeBird, Hollywood, Spectrum Naturals, Spectrum Essentials, Walnut Acres Organic, Imagine Foods, Rice Dream, Soy Dream, Rosetto, Ethnic Gourmet, Yves Veggie Cuisine, Linda McCartney, Realeat, Lima, Grains Noirs, Natumi, JASON, Zia Natural Skincare, Avalon Organics, Alba Botanica and Queen Helene."

HAIN's results have definitely confirmed the trend in consumer spending. They have beaten Wall Street's estimates and guided higher in three out of the last four earnings reports.

The Q4 report in late August this year saw revenues up +26% to $583.8 million. Management raised their guidance as they now expect sales growth of +27% to +30% in 2015.

The company reported their 2015 Q1 numbers on November 6th and sales are accelerating. Wall Street was expecting a profit of $0.67 on revenues of $640.27 million. HAIN delivered a profit of $0.68, which is a +31% increase from a year ago. Revenues were up +34.6% to $642.6 million. These are really impressive results when you consider that includes a voluntary recall of their HAIN nut butters back in August.

Commenting on their Q1 results, Irwin Simon, Founder, President, and CEO of the company said, "We are pleased with another strong start to our fiscal year across all of our segments on a worldwide basis with the highest quarterly net sales in the Company's history."

"Our diverse portfolio of brands and products across multiple categories and our customer base across various channels of distribution enabled us to deliver double-digit sales growth even with the impact of the nut-butter recall initiated in August."

Accompanying these results their Board of Directors also approved a 2-for-1 stock split but shareholders needed to approve an increase in the number of shares outstanding first. The company's annual meeting was a few days ago and shareholders did approve the stock split. That headline came out tonight, after the closing bell.

The 2-for-1 stock split will occur in December. The shareholder record date is December 12th, 2014. The ex-dividend date is expected to be December 29th (this is when HAIN will begin trading post-split).

Shares of HAIN have been consolidating sideways beneath resistance at $110 for the last three weeks. The stock displayed relative strength today and looks poised to breakout past this resistance. The 2-for-1 stock split news could be the catalyst it needed. After hours tonight shares are trading around $110.50. We are expecting HAIN to gap open higher tomorrow morning. I'm suggesting a trigger to buy calls on HAIN if shares trade at $110.25 or higher.

We are not setting an exit target tonight but I will point out that the point & figure chart is bullish and forecasting a long-term $131.00 target.

- Suggested Positions -

Long 2015 Jan $115 call (HAIN150117c115) entry $1.80

12/09/14 new stop @ 111.35
11/29/14 new stop @ 109.85
11/26/14 triggered @ $110.25
Option Format: symbol-year-month-day-call-strike


The Home Depot - HD - close: 99.64 change: -0.79

Stop Loss: 97.25
Target(s): To Be Determined
Current Option Gain/Loss: - 9.1%
Average Daily Volume = 6.4 million
Entry on December 08 at $100.25
Listed on December 06, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
12/09/14: Yesterday HD added 79 cents. Today HD erased that gain with a 79 cent drop. More importantly traders bought the dip at its rising 10-dma. I am suggesting a new rally above $100.25 as a bullish entry point to buy calls.

Earlier Comments: December 6, 2014:
Shares of HD ended the week at an all-time closing high, just below the $100 mark. The company had a bit of a rough start to 2014. They missed estimates on both the top and bottom line when they reported back in February and management lowered their forward guidance. They missed estimates again in May. Momentum changed with their August earnings report as HD beat Wall Street's bottom line estimate and raised their 2015 guidance.

HD appears to be benefitting from the growing U.S. economy. Falling unemployment means more people are working. Homebuilders are feeling confidence. The U.S. is seeing strong housing starts. Consumers are remodeling their homes. The do-it-yourself trend remains strong. HD is starting to see growth in the "connected home" concept, which is part of the Internet of Things (IoT) with remote control garage doors, home monitoring, thermostats, and light fixtures.

HD is in the services sector. According to the company website, "The Home Depot is the world's largest home improvement specialty retailer, with 2,269 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. In fiscal 2013, The Home Depot had sales of $78.8 billion and earnings of $5.4 billion. The Company employs more than 300,000 associates."

Investors were keenly focused on the company's latest earnings report, HD's Q3 report, which came out on November 18th. Analysts wanted to know if the massive data breach reported by HD in September would negatively impact sales. It looks like the data breach has been overlooked by most if HD's customers.

Wall Street was looking for Q3 results of $1.14 per share on revenues of $20.47 billion. HD said their earnings per share rose +21% to $1.15 (up from $0.95 a year ago). Revenues improved +5.4% to $20.52 billion. The company said their overall comparable store sales were up +5.2% while inside the U.S. comps were up +5.8%. Online sales surged +40%.

HD gave relatively bullish guidance. They still expect +21% earnings growth in 2015. However, they noted that current guidance does not include any probable losses from the data breach. Last year Target (TGT) was a high-profile company that confessed to a huge data breach where millions of customer credit card data was stolen. This year Home Depot has been another high-profile company targeted by hackers.

HD said approximately 56 million cards may have been compromised. They have since plugged the hole in their cyber security. HD did confess in a recent SEC filing that they are facing 44 civil lawsuits in U.S. and Canada in response to the data breach. In spite of all the bad news investors continue to bid the stock higher.

Since HD's earnings report in November the stock has received several price target upgrades. The point & figure chart is also bullish and forecasting at $110 target.

Friday's November jobs report shows that the U.S. economy could be picking up speed, which would be bullish for HD. It looks like shares are going to breakout past significant round-number, psychological resistance at the $100 level.

Tonight we are suggesting a trigger to buy calls at $100.25.

Interesting factoid: HD's last stock split was a 3-for-2 split back in 1999 in the $90-100 range. I'm not predicting they will announce a new split but you never know.

- Suggested Positions -

Long FEB $105 CALL (HD150220C105) entry $1.21

12/08/14 triggered @ 100.25
Option Format: symbol-year-month-day-call-strike


Red Robin Gourmet Burgers - RRGB - close: 72.29 change: -0.09

Stop Loss: 69.85
Target(s): To Be Determined
Current Option Gain/Loss: +28.8%
Average Daily Volume = 214 thousand
Entry on December 02 at $70.55
Listed on December 01, 2014
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
12/09/14: RRGB held up pretty well in spite of the market's two-day dip. Shares found support above $70 again and closed virtually unchanged on the session.

We'll try and reduce our risk by raising the stop loss up to $69.85. A breakout past resistance near $73.00 could be a new bullish entry point.

Earlier Comments: December 1, 2014:
RRGB is part of the services industry. They operate a chain of casual dining restaurants. According to a company press release, "Red Robin Gourmet Burgers, Inc. (www.redrobin.com), a casual dining restaurant chain founded in 1969 that operates through its wholly-owned subsidiary, Red Robin International, Inc., is the Gourmet Burger Authority, famous for serving more than two dozen craveable, high-quality burgers with Bottomless Steak Fries in a fun environment welcoming to guests of all ages. There are more than 500 Red Robin restaurants across the United States and Canada, including those operating under franchise agreements."

After big gains in 2013 the stock has had a rocky year in 2014. They beat earnings back in February but revenues missed the estimate. The stock rallied anyway. In May they reported earnings that beat both the top and bottom line estimates and shares soared. Then in August the stock reported its Q2 numbers that missed Wall Street's estimates by a wide margin. You can see the plunge lower on the daily chart.

It would appear that August may have been a one-quarter anomaly. RRGB reported their latest quarterly results on November 4th. Analysts were expecting a profit of $0.34 a share on revenues of $267.65 million. RRGB delivered earnings of $0.50 a share. That's a +56% increase from a year ago. Revenues missed estimates by a small margin at $267.4 million but that's still a +16% increase. The company said their number of guests were down -2.3% but the average bill was up +3.2%. Management expects comparable sales to rise +3% for fiscal 2014 and they believe RRGB will see operating profit margins of 21.3%. The stock soared on this report.

Casual dining stocks should see a big benefit from lower crude oil prices. Lower oil means lower gasoline prices at the pump. Gas prices have fallen to four-year lows in recent weeks. That means more disposable income for consumers to spend. After the OPEC decision last week we could see depressed oil prices for a long time.

Currently shares of RRGB have been consolidating gains in a sideways pattern under resistance near $70.00 the last couple of weeks. A breakout past $70.00 could spark some short covering. The most recent data listed short interest at 12.7% of the very small 13.8 million share float. Currently the Point & Figure chart is very bullish with a long-term target of $115.00.

The November intraday high was $70.45. Tonight I am suggesting a trigger to buy calls at $70.55.

- Suggested Positions -

Long 2015 Jan $70 call (RRGB150117c70) entry $2.95

12/09/14 new stop @ 69.85
12/02/14 triggered @ 70.55
Option Format: symbol-year-month-day-call-strike


The Sherwin-Williams Co. - SHW - close: 249.58 change: +0.08

Stop Loss: 245.65
Target(s): To Be Determined
Current Option Gain/Loss: +184.9%
Average Daily Volume = 526 thousand
Entry on November 05 at $231.00
Listed on November 01, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
12/09/14: Shares of SHW are also holding up pretty well during the market's current dip. Traders bought SHW near yesterday's low and like yesterday SHW rebounded back to close near its highs, right below resistance at $250.00.

If the market can show any strength there is a good chance SHW will breakout to new highs. Tonight we are raising the stop loss to $245.65.

I am not suggesting new positions at this time.

Earlier Comments: November 1, 2014:
It's not very often you see a company about to celebrate its 150th birthday. For SHW that will be the year 2016. The company has been in business since 1866. The Company's core business is the manufacture, distribution and sale of coatings and related products. SHW is headquartered in Cleveland, Ohio. They sell through over 4,100 company-operated stores. Their global group has sales in more than 115 countries. Sherwin-Williams is also a very well known dividend payer and has annually increased dividends since 1979.

The slow and steady economic improvement in the U.S. has been beneficial. The real estate market has also helped SHW. New homes need new paint. The pace of new home sales in the U.S. hit six-year highs last month. While home sales do tend to slow down a bit in the winter months SHW should benefit from lower input costs. Crude oil and natural gas are big components in the paint and coatings industry. The severe drop in oil the last few months is a blessing for SHW.

The company raised their earnings guidance back in July. They issued bullish guidance again in their latest quarterly report. SHW announced earnings on October 28th. Wall Street was expecting a profit of $3.22 per share on revenues of $3.18 billion. SHW said their earnings rose +31.4% to a record-setting $3.35 per share. Revenues were up +10.6% at $3.15 billion, which missed the estimate.

SHW's remodeling business saw growth. The real driver was paint sales. Their paint stores account for the lion's share of sales, which saw revenues up +20%. SHW also purchased 2.0 million shares of their stock last quarter and still have 6.8 million yet to buy in their stock buy back program.

Management was optimistic. SHW's Chairman and CEO MR. Christopher Connor, said,

"We are pleased to report record sales and earnings per share in the third quarter and first nine months of 2014 on the continued positive sales volume and strong operating results of our Paint Stores Group. The Paint Stores Group architectural volume growth was positive across all end market segments. The Comex acquisition continues to perform better than expected in the year. Our Consumer Group improved its operating results through higher volume sales and operating efficiencies. Our Global Finishes Group continues to improve its operating margins through improved operating efficiencies."

Management raised their 2014 EPS guidance above Wall Street's estimates. They also raised their revenue guidance but this was only in-line with consensus. SHW now expects Q4 sales in the +6% to +8% range. They expect earnings to be in the $1.30-1.40 range versus $1.14 in the fourth quarter of 2013.

The stock's relative strength has driven shares to new all-time highs and a +25% gain in 2014. The point & figure chart is bullish and forecasting at long-term target at $286.

Tonight we are suggesting a trigger to buy calls at $231.00.

- Suggested Positions -

Long 2015 Jan $240 call (SHW150117c240) entry $3.37

12/09/14 new stop @ 245.65
11/22/14 new stop @ 238.25
11/15/14 new stop @ 234.45
11/13/14 SHW is hitting potential resistance at $240. Traders may want to take profits now.
11/08/14 new stop @ 229.75
11/05/14 triggered @ 231.00
Option Format: symbol-year-month-day-call-strike


Semiconductor ETF - SMH - close: 55.66 change: -0.10

Stop Loss: 53.85
Target(s): To Be Determined
Current Option Gain/Loss: +400.0%
Average Daily Volume = 2.4 million
Entry on October 17 at $47.15
Listed on October 16, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
12/09/14: The SMH gapped down this morning, which isn't that uncommon. Fortunately traders bought the dip and shares pared their loss to just 10 cents. The value on our call option actually ended the day with a gain.

I don't see any changes from my prior comments. The path of least resistance is up but the SMH is very overbought and due for a correction. Investors will want to strongly consider taking profits now. I am not suggesting new positions at this time.

Earlier Comments: October 16, 2014:
It looks like the correction in the semiconductor stocks might be done.

The SMH is the Market Vectors Semiconductor Exchange Traded Fund (ETF) that tries to mimic the performance of the Market Vectors Semiconductor 25 index. Semiconductors as a group had been strong performers with the SMH up +73% from its late 2012 lows.

A few weeks ago the industry started to see some profit taking. MCHP issued an earnings warning last week that that sparked the massive plunge in the SMH. The SMH has witnessed a -15% correction from its 2014 closing high to the closing low on Monday this week. Now it has started to bounce. It's possible all the panic selling is over.

Intel (INTC), a much bigger company than MCHP, just reported earnings on October 14th and the results were better than Wall Street expected. More importantly INTC offered slightly bullish guidance.

Bloomberg noted that INTC said its PC-processor business rose +8.9% last quarter. Sales for INTC's chips for notebook computers soared +21%. Even chips for desktop PCs rose +6% in the third quarter.

The strong results from INTC have helped buoy the SMH, which is starting to rebound after testing (and piercing) long-term support on its weekly chart (shown below).

We suspect the worst might be over. However, this could be a volatile trade. There are a lot of semiconductor companies who have yet to report their results.

The SMH saw its rally stall under $47 and near its 200-dma. Tonight we are suggesting a trigger to buy calls at $47.15.

- Suggested Positions -

Long 2015 Jan $50 call (SMH150117c50) entry $1.10

11/29/14 new stop @ 53.85
11/22/14 new stop @ 52.25
11/20/14 new stop @ 51.40
11/12/14 new stop @ 50.85, readers may want to just take profits now!
11/01/14 new stop @ 48.85
10/25/14 new stop @ 47.85
10/21/14 new stop @ 46.35
10/17/14 triggered @ 47.15
Option Format: symbol-year-month-day-call-strike




PUT Play Updates


Currently we do not have any active put trades.




CLOSED BULLISH PLAYS

FedEx Corp. - FDX - close: 178.77 change: -2.76

Stop Loss: 176.65
Target(s): To Be Determined
Current Option Gain/Loss: +232.1%
Average Daily Volume = 1.5 million
Entry on October 17 at $155.50
Listed on October 15, 2014
Time Frame: Probably exit prior to earnings on Dec. 17th
New Positions: see below

Comments:
12/09/14: The stock market's widespread drop this morning sparked some profit taking in FDX. Shares gapped open lower at $179.79 and fell to $176.53 before paring its losses. Our stop loss was hit at $176.65. It's been a pretty good ride from $155.50 back in October.

I've been warning readers that FDX was overbought and due for a pullback. Earnings are coming up on December 17th. If FDX sees any post-earnings profit taking I suggest watching the $170.00 area as potential support and a possible entry point for new bullish positions.

- Suggested Positions -

2015 Jan $160 call (FDX150117c160) entry $5.30 exit $17.60 (+232.1%)

12/09/14 stopped out
12/02/14 new stop @ 176.65
11/29/14 new stop @ 174.25
11/17/14 new stop @ 169.85
11/15/14 new stop @ 168.40
11/08/14 new stop @ 165.50
11/01/14 new stop @ 163.45
10/28/14 new stop @ 162.65, traders may want to take profits now!
10/25/14 new stop @ 157.85
10/23/14 new stop @ 155.90
FDX is nearing resistance at $164.00. Traders may want to take profits now.
10/21/14 new stop @ 153.45
10/17/14 triggered @ 155.50
Option Format: symbol-year-month-day-call-strike

chart:


Northrop Grumman - NOC - close: 147.55 change: +0.98

Stop Loss: 144.85
Target(s): To Be Determined
Current Option Gain/Loss: +150.7%
Average Daily Volume = 1.0 million
Entry on November 21 at $140.25
Listed on November 20, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
12/09/14: Last night we raised our stop loss to try and protect profits on this NOC trade. The Tuesday morning market sell-off was too strong and shares plunged to $144.42 before bouncing back. Our new stop was hit at $144.85.

The longer-term bullish story on NOC hasn't changed but we should wait for a better entry point before trying again.

- Suggested Positions -

2015 Jan $145 call (NOC150117c145) entry $1.50 exit $3.76 (+150.7%)

12/09/14 stopped out
12/08/14 new stop @ 144.85
12/06/14 new stop @ 143.85
12/01/14 NOC has broken short-term support and looks poised to hit our stop loss
11/29/14 new stop @ 138.65
11/21/14 triggered @ 140.25
Option Format: symbol-year-month-day-call-strike

chart:


Zebra Technologies - ZBRA - close: 75.28 change: -1.21

Stop Loss: 74.75
Target(s): To Be Determined
Current Option Gain/Loss: -59.3%
Average Daily Volume = 489 thousand
Entry on December 05 at $76.90
Listed on December 04, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
12/09/14: It's always frustrating to see a stock dip low enough to hit your stop loss and then rebound sharply. It's even more frustrating when a stock gaps open below your stop loss like ZBRA did today. Our stop was $74.75 but the market's sharp decline this morning saw ZBRA gap down at $74.22. The stock bounced at its rising 200-dma and actually closed up +1.1% on the session.

I'm still bullish on ZBRA but our trade is officially closed. If ZBRA can breakout past its recent highs near $77.30 it would be bullish.

- Suggested Positions -

FEB $80 CALL (ZBRA150220C80) entry $2.95 exit $1.20 (-59.3%)

12/09/14 stopped out on gap down at $74.22, stop was $74.75
12/05/14 triggered on gap open at $76.90, suggested entry was $76.85
Option Format: symbol-year-month-day-call-strike

chart: