Editor's Note:

Our portfolio continues to grow as candidates make the jump from watch list to open plays.


Closed Plays


STLD has been closed.


Play Updates


Akamai Technology - AKAM - close: 51.67 change: +0.56

This past week AKAM reported its Q3 earnings that were only inline with expectations (34 cents) while revenues of $253.6 million managed to beat estimates. This report helped power shares of AKAM to a new multi-year high on an intraday basis but shares failed to breakout over their 2010 highs from September near $53.00. Given AKAM's pause at resistance this past week I am suggesting that we go ahead and sell (exit) the 2011 January calls listed below. I suspect next week could see a lot of volatility in the market and AKAM may retest the $46 region. Nimble traders could try launching new positions on another dip or bounce near $46.

Previous Comments:
I remain longer-term bullish on AKAM. Our second, longer-term target is $59.75. FYI: AKAM has seen some takeover chatter in the last couple of months.

Oct 06, 2010 - entry price on AKAM @ 45.50, option @ 2.85
symbol: AKAM1122A50 2011 JAN $50 call - exit now: bid @ 5.10 (+78.9%)
-stop loss on AKAM @ 41.90

- or -

Oct 06, 2010 - entry price on AKAM @ 45.50, option @ 7.50
symbol: AKAM1221A50 2012 JAN $50 call - current bid/ask $10.75/11.10
-stop loss on AKAM @ 41.90

10/30/10 Sell the 2011 Jan. calls, option bid @ 5.10 (+78.9%)
10/06/10 Play triggered when AKAM hit $45.50

Chart of AKAM:


Baidu, Inc. (Baidu.com) - BIDU - close: 110.01 change: -2.16

BIDU continues to be one of the best momentum stocks of the last two years. Shares rallied to new all-time highs, this time over the $110 level. Readers can take profits at any time now. Just be aware that if you don't, and BIDU sees the long, overdue correction that will eventually show up, our option values are going to plummet!

On a short-term basis I would look for support near $105 and then at $100. More conservative traders may want to raise their stops toward the $100 area. I'm not suggesting new positions at this time. Please note that I'm adjusting our exit target for our 2012 calls from $119 to $129.00.

Previous Comments:
BIDU is a very volatile stock. This is an aggressive, higher-risk trade. Keep your position size small to limit your risk. We have already taken profits on the 2011 calls. Our target for the 2012 calls is $129.00. Our stop is at $94.00.

Only one position left.

Aug 02, 2010 - entry price on BIDU @ 83.50, option @ 13.00
symbol: BIDU1221A100 2012 JAN $100 call - current bid/ask $29.15/29.65
-stop loss on BIDU @ 94.00

10/30/10 Adjusted exit to $129.00.
10/23/10 New stop loss @ 94.00
10/21/10 BIDU reports strong earnings.
10/02/10 Sell half of 2012 calls, BIDU @ 98.80, option @ 22.30 (+71.5%)
09/25/10 Take Profits on the 2011 calls, BIDU @ 97.83, option @ 14.75 (+84.3%)
09/25/10 New stop @ 79.00

Chart of BIDU:


Berkshire Hathaway - BRK.B - close: 79.56 change: -0.54

BRK.B saw some new headlines last week. One was about a hedge fund manager joining Berkshire as a new executive. Another headline was about BRK.B buying Sun Life's reinsurance business. I couldn't pinpoint what story sparked the sell-off in shares of BRK.B last week. We were expecting the stock to pull back but only with the wider market. This relative weakness is worrisome. On a more positive note BRK.B did hit our trigger to buy the dip at $79.00 on Friday and traders bought the pull back near the stock's rising 200-dma (technical support).

Shares remain near $79 and our entry point and thus the stock continues to offer us an entry point today. However, readers may want to wait and see if there is any follow through on Friday's intraday bounce. More conservative traders may want to use a tighter stop loss. Currently we have a stop at $74.40.

Our long-term target is $99.00 and I prefer the 2012 calls.

Oct 29, 2010 - entry price on BRK.B @ 79.00, option @ 1.25
symbol: BRKB1122A85 2011 JAN $85 call - current bid/ask $ 1.29/ 1.36
-stop loss on BRK.B @ 74.40

- or -

Oct 29, 2010 - entry price on BRK.B @ 79.00, option @ 5.00
symbol: BRKB1221A90 2012 JAN $90 call - current bid/ask $ 4.85/ 5.05
-stop loss on BRK.B @ 74.40

10/29/10 Play triggered on dip at $79.00.

Chart of BRK.B:


Bucyrus Intl. - BUCY - close: 68.16 change: +1.32

Bingo! Right on cue shares of BUCY continued to pull back and just as expected traders bought the dip near $65.00. This bounce looks like a new bullish entry point for call options.

Previous Comments:
We will plan to sell the rest of our 2011 calls when BUCY hits $78.50. We have taken profits once already near $70. Our second, longer-term target is $87.50

Sep 01, 2010 - entry price on BUCY @ 61.00, option @ 8.50
symbol: BUCY1122A60 2011 JAN $60 call - current bid/ask $10.35/10.55
-stop loss on BUCY @ 63.75

- or -

Sep 01, 2010 - entry price on BUCY @ 61.00, option @ 13.00
symbol: BUCY1221A70 2012 JAN $70 call - current bid/ask $12.85/13.20
-stop loss on BUCY @ 63.75

10/21/10 BUCY misses earnings.
10/11/10 New stop loss @ 63.75
09/18/10 Take Profits. We want to sell half of our 2011 Jan $60 calls.
BUCY is at $70.37. The calls are bid $13.85 (+62.9%) 09/18/10 New stop loss at $57.40

Chart of BUCY:


ConocoPhillips - COP - close: 59.39 change: -0.19

COP reported earnings this past week and beat estimates by four cents but the stock's rally was already looking tired and shares corrected. The pull back this past week has created a bearish engulfing reversal pattern candlestick on the weekly chart. While this pattern needs to see confirmation it is a warning sign that COP may not be done correcting yet. I am still suggesting readers look for a pull back toward short-term support near $58 or the $56 levels before considering new positions.

Prior Comments:
We have already taken profits on the 2011 calls. That leaves the 2012 call position and our long-term target is $69.00.

May 20, 2010 - entry price on COP @ 51.00, option @ 4.75
symbol: COP 11A55.00 2012 JAN $60 call - current bid/ask $5.75/5.90
-stop loss on COP @ 54.85

10/23/10 Exit the 2011 Jan. $55 calls @ 7.05 (+88%)
10/23/10 New stop loss @ 54.85
10/11/10 New stop loss @ 51.90
09/04/10 COP gave us a new entry with the move over $54.00
07/17/10 COP's bounce has failed. Consider an early exit!
07/03/10 More Conservative traders may want to exit early!

Chart of COP:


Walt Disney Co. - DIS - close: 36.13 change: -0.39

The market spent last week drifting sideways but DIS showed relative strength and broke out from a major consolidation pattern. Our plan was to buy call LEAPS if DIS could close over $35.50. That happened on Oct. 26th with a close at $35.96. Thus our entry point was the next morning (Oct. 27th) when DIS opened at $35.60. DIS might look a little bit overbought here so patient traders could wait for a dip back toward $35.50-35.00 as another entry point.

I am adjusting our stop loss to $32.75. I am also adjusting our first upside target to $42.00. We can expect some resistance near $38.00. FYI: DIS is due to report earnings on November 11th.

Oct 27, 2010 - entry price on DIS @ 35.60, option @ 2.23
symbol: DIS1221A40 2012 JAN $40 call - current bid/ask $ 2.31/ 2.45
-stop loss on DIS @ 32.75

- or -

Oct 27, 2010 - entry price on DIS @ 35.60, option @ 3.63
symbol: DIS1319A40 2013 JAN $40 call - current bid/ask $ 3.65/ 4.00
-stop loss on DIS @ 32.75

10/27/10 Play opened, DIS opened @ $35.60

Chart of DIS:


Diamond Offshore - DO - $66.16 change: -0.14

Just as we expected shares of DO continued to drift lower toward $65.00. This pull back looks like an entry point. However, I'm concerned because DO is showing relative weakness versus the OSX oil services index, which has continued to climb. I would keep an eye on DO's 50-dma and 100-dma and watch for these to offer some support. Consider waiting for a decent bounce before initiating new positions and then adjusting your stop losses.

I'm longer-term bullish on DO but short-term this weakness is troubling. We have a stop loss at $62.40. Our first long-term target is $79.00. Our second, longer-term target is $89.00.

NOTE - it looks like the option strikes have changed to reflect the recent dividend announced by DO. The 2011 March $80s are no the $79.25s. The 2012 Jan. $86s are now $85.25s.

Oct 21, 2010 - entry price on DO @ 67.50, option @ 1.90
symbol: DO1119C80 2011 Mar $79.25 call - current bid/ask $1.29/1.36
-stop loss on DO @ 62.40

- or -

Oct 21, 2010 - entry price on DO @ 67.50, option @ 4.79
symbol: DO1221A86 2012 Jan $85.25 call - current bid/ask $3.00/3.80
-stop loss on DO @ 62.40

10/21/10 Play triggered on a dip at $67.50

Chart of DO:


EMC Corp. - EMC - close: 21.02 change: +0.04

EMC hasn't made much progress the last couple of weeks. The stock is still consolidating under the $21.50 area. I am expecting a market pull back in the next couple of weeks and EMC could retest the $20-19 zone so I'm not suggesting new positions at this time.

Previous Comments:
Our first target is $22.50. Our second, longer-term target is $24.75. We have a stop at $18.45.

May 6, 2010 - entry price on EMC @ 18.25, option @ 1.40
symbol: EMC 11A20.00 2011 Jan $20 call - current bid/ask $1.72/1.77
-stop loss on EMC @ 18.45

- or -

May 6, 2010 - entry price on EMC @ 18.25, option @ 2.50
symbol: EMC 12A20.00 2012 Jan $20 call - current bid/ask $3.35/3.45
-stop loss on EMC @ 18.45

10/23/10 Sell Half of the 2011 calls, bid @ 2.06 (+47%)
10/23/10 New stop loss @ 18.40
09/04/10 EMC has provided a new entry point with the move over $19
07/03/10 More Conservative Traders may want to exit early!

Chart of EMC:


Express Scipts - ESRX - close: 48.52 change: -0.14

ESRX's earnings last week and the reaction to the news was underwhelming. Wall Street was looking for 65 cents a share on revenues of $11.42 billion. ESRX met profit estimates but revenues were light at $11.25 billion. The company did offer somewhat bullish guidance for the rest of 2010 but the stock barely moved.

I remain longer-term bullish on ESRX but I'm starting to think we might see this stock churn sideways for a while longer. On a positive note the 50-dma is rising and could breakout above the 200-dma pretty soon. Keep an eye on the 50-dma as potential support. Plus the weekly chart has a long-term trendline of support and dips to it could be used as entry points.

I do see some resistance in the $53-54 zone. Our long-term target is the $59-60 area. Please note I'm setting the stop loss at $44.40.

Oct 25, 2010 - entry price on ESRX @ 49.30, option @ 4.85
symbol: ESRX1221A55 2012 Jan $55 call - current bid/ask $4.15/4.35
-stop loss on ESRX @ 44.40

- or -

Oct 25, 2010 - entry price on ESRX @ 49.30, option @ 7.10
symbol: ESRX1319A55 2013 Jan $55 call - current bid/ask $6.90/7.45
-stop loss on ESRX @ 44.40

10/25/10 Trade is opened. ESRX opens @ $49.30

Chart of ESRX:


SPDR Gold ETF - GLD - close: 132.62 change: +1.38

The lack of follow through on the GLD's breakdown two weeks ago is positive for us. However, we should not get complacent. The GLD did breakout higher on Friday from its recent trading range but there is some short-term resistance at the top of its gap down in the $133-134 area. A new failed rally in this $133-135 zone could spell a significant (intermediate) top for gold.

Everything depends on the Federal Reserve's decision on any quantitative easing program. This decision is due out on Wednesday afternoon (Nov. 3rd). If the FOMC announces a massive new QE program then the dollar could drop, which would lift gold. If the QE program is too small then the dollar could rally, which would spark selling in gold. Whatever happens next week should see lots of volatility. More conservative traders will want to seriously consider exiting their 2011 calls prior to the announcement, especially consider the WSJ's report this past week suggesting the FOMC will only announce a $250 billion QE program.

I am not suggesting new positions at this time. Please note I'm raising our stop loss to $121.00. We still want to sell (exit) the rest of our 2011 March calls if the GLD hits $138.00.

Aug 6, 2010 - entry price on GLD @ 118.00, option @ 7.70
symbol: GLD1119C120 2011 Mar $120 call - current bid/ask $14.75/15.15
-stop loss on GLD @ 121.00

- or -

Aug 6, 2010 - entry price on GLD @ 118.00, option @ 10.75
symbol: GLD1221A130 2012 Jan $130 call - current bid/ask $15.65/16.00
-stop loss on GLD @ 121.00

10/30/10 New stop @ 121.00. Readers may want to exit ahead of FOMC meeting
10/02/10 Sell half of the 2011 March calls, option @ 12.70 (+64.9%)
10/02/10 New stop $ 118.49
09/25/10 New stop @ 116.45, new target 138.50

Weekly Chart of GLD:


Humana Inc. - HUM - close: 58.29 change: +0.45

The rally in HUM continues and the stock is now up four weeks in a row with a +18% gain. The company is due to report earnings on Monday morning (Nov. 1st) before the opening bell. Wall Street is looking for a profit of $1.66 a share. I'd say the odds of some profit taking on HUM's earnings report are almost guaranteed but if the company beats the stock could always see a temporary spike higher. I am not suggesting new bullish positions at this time. On a correction look for a pull back toward the $54-53 zone over a several day period.

Previous Comments:
We have already sold (exited) our 2011 calls for a profit. Our second, longer-term target is $69.00.

Sep 17, 2010 - entry price on HUM @ 50.50, option @ 6.40
symbol: HUM1221A55 2012 Jan $55 call - current bid/ask $9.30/10.50
-stop loss on HUM @ 48.75

10/23/10 Exit (sell) the 2011 Jan. $55 calls, bid @ 4.40 (+137%)
10/23/10 New stop loss $ 48.75
10/16/10 New stop loss @ 47.40
10/11/10 New Entry point - HUM is breaking out past $51.00.

Chart of HUM:


Intl.Business Machines - IBM - close: 143.60 change: +2.70

Target achieved! The pull back in IBM didn't last very long. Shares closed the week at new multi-year highs. IBM actually hit $144.00 on Friday. We had set our target to exit the 2011 Jan. $140 calls if IBM hit $144.00.

I still believe this pace is unsustainable and would not chase IBM at these levels. The stock will correct eventually and we'll get another entry point. Our long-term target is $159.00. Our stop is at $129.50.

Sep 30, 2010 - entry price on IBM @ 136.00, option @ 3.90
symbol: IBM1122A140 2011 Jan $140 call - exit at $6.70 (+71.8%)
-stop loss on IBM @ 129.50

- or -

Sep 30, 2010 - entry price on IBM @ 136.00, option @ 7.80
symbol: IBM1221A150 2012 Jan $150 call - current bid/ask $ 9.70/ 9.90
-stop loss on IBM @ 129.50

10/29/10 IBM hit $144, our target to exit the 2011 calls (+71.8%)
10/18/10 IBM reported earnings
10/16/10 Short-term target for 2011 calls set at $144.00.
09/30/10 Play triggered $136.00, stop $129.50

Chart of IBM:


Infosys Technologies - INFY - close: 67.44 change: +0.54

INFY is still bouncing around the $68-66 level. I'm not convinced the $66 level is going to hold up as support for much longer. If the market corrects look for INFY to dip toward the $64-62 zone.

Previous Comments:
We have already sold the 2011 calls for a profit. Our remaining position are any 2012 calls. Our long-term target is $79.00.

July 1, 2010 - entry price on INFY @ 59.00, option @ 8.20
symbol: INFY 12A65.00 2012 Jan $65 call - current bid/ask $ 9.30/11.60
-stop loss on INFY @ 61.75

10/15/10 INFY reports earnings.
10/02/10 Sell the 2011 Calls, INFY @ 70.52, option @ 11.20 (+49.3%)
10/02/10 New stop @ 61.75
09/25/10 New stop @ 58.75

Chart of INFY:


McDonald's Corp. - MCD - close: 77.77 change: +0.29

If you look at your chart of MCD it might seem like shares spiked to a new all-time high of $79.90 on Friday but that appears to be a bad tick. The stock actually traded in a very mellow 60-cent range under $78.00. Shares of MCD remain very overbought and due for a much needed pullback. On a short-term basis I would look for support near $76.00. On a steeper decline we can watch for support near $74 and $72. I am not suggesting new bullish positions at this time.

Previous Comments:
We have already sold the 2011 calls for a gain. Our long-term target for the 2012 calls is $89.00. We have a stop loss at $69.75.

June 29, 2010 - entry price on MCD @ 66.50, option @ 2.20
symbol: MCD 12A80.00 2012 Jan $80 call - current bid/ask $4.70/ 4.85
-stop loss on MCD @ 69.75

10/23/10 New stop @ 69.75
10/16/10 Sell the remaining 2011 calls, bid @ $8.00 (+201%)
10/16/10 New target for 2012 positions @ $89.00
10/02/10 New stop @ 67.90
08/28/10 New stop @ 66.75
07/17/10 Take Profits! 2011 Jan $70 call @ 4.00 (+51%), 2012 $80 call @ 3.50 (+59%)

Chart of MCD:


Microsoft Corp. - MSFT - close: 26.67 change: +0.39 stop: 23.25

It was a bullish week for MSFT with the company beating estimates with its earnings report. Wall Street wanted to see a profit of 55 cents on $15.8 billion in revenue. MSFT delivered 62 cents on $16.2 billion. Operating margins improved and the stock reacted with a strong gain on Friday. Unfortunately the intraday rally stalled near technical resistance at its 200-dma. I wouldn't be surprised to see MSFT retreat toward the $26-25 zone and I would use such a dip as a new entry point to buy call LEAPS.

Previous Comments:
The $28.00 level could be significant resistance as would the 2010 highs near $31.50. Long-term my upside target is $31.00. Our time frame is nine to twelve months. Stop loss at $23.25.

Oct 18, 2010 - entry price on MSFT @ 25.59, option @ 3.30
symbol: MSFT1221A25 2012 Jan $25 call - current bid/ask $3.70/ 3.80
-stop loss on MSFT @ 23.25

- or -

Oct 18, 2010 - entry price on MSFT @ 25.59, option @ 2.30
symbol: MSFT1319A30 2013 Jan $30 call - current bid/ask $2.61/ 2.76
-stop loss on MSFT @ 23.25

10/28/10 MSFT delivers stronger than expected earnings.

Chart of MSFT:


NVIDIA Corp. - NVDA - close: 12.02 change: -0.03

It is a little disappointing to see the SOX semiconductor index breakout to new relative highs and NVDA fail to participate. Then we already knew that NVDA had not been trading in sync with the sector. The trend for NVDA is still up but shares are struggling with some resistance at its exponential 200-dma and the September highs. If you're looking for new positions I'd wait for dips near $11 and its 50-dma. FYI: We should see earnings from NVDA in the next two weeks.

Previous Comments:
We took profits on the 2011 calls in late September. All we have left are the 2012 calls. Overall this remains an aggressive, higher-risk trade. NVDA has been struggling and sales growth has been slowing down but we are betting the worse has already been priced in for this stock. Keep your positions very small to limit our risk. Our first target is $12.50. Our second, longer-term target is $14.00.

Sep 13, 2010 - entry price on NVDA @ 10.75, option @ 1.69
symbol: NVDA1221A12.5 2012 Jan $12.50 call - current bid/ask $2.10/ 2.21
-stop loss on NVDA @ 9.95

09/25/10 Sell the 2011 calls, NVDA @ 12.26, option @ 2.70 (+70.8%)
09/25/10 new stop 9.95
09/13/10 Play Triggered @ $10.75

Chart of NVDA:


Transocean Ltd. - RIG - close: 63.36 change: -0.80

Hmm... shares of RIG have been under performing the last several days. The stock failed at resistance near the 200-dma two weeks ago and has been slipping ever since. Yet the OSX oil services index has been a lot stronger. Overall the pull back in RIG is normal and shares are up significantly from their summer lows. We can expect to see a lot more volatility this week as RIG reports earnings on Nov. 3rd after the closing bell. Wall Street is looking for a profit of $1.36 a share. It will be interesting to see if RIG has anything to say on the BP Gulf Oil spill in its report. I am not suggesting new positions at this time.

Previous Comments:
We have taken profits twice, once at $59.00, and then we exited the 2011 calls at $67.00. We still have the 2012 calls and we're aiming for $75.00 although I'm thinking about adjusting that exit toward $79.00 instead. Both the $75.00 and $80.00 levels should be overhead resistance. This is an aggressive trade given the unknown risks associated with RIG's connection to the Gulf oil spill.

Jun 09, 2010 - entry price on RIG @ 43.50, option @ 7.25
symbol: RIG 12A60.00 2012 Jan $60 call - current bid/ask $12.30/12.75
-stop loss on RIG @ 54.85

10/23/10 New stop @ 54.85
10/13/10 Target hit at $67.00 to exit the 2011 call option @ 17.40 (+167.6%)
10/02/10 New stop @ 53.90
09/10/10 Target Hit @ 59.00 (take some money off the table), 2011 Jan $50 call @ $11.45 (+76.1%), the 2012 Jan $60 call @ $10.35 (+42.7%)

Chart of RIG:


TASER Intl. - TASR - close: 3.97 change: +0.02

Ouch! What happened to TASR. Shares lost more than -12% last week. The answer is earnings is what happened! The company reported on Oct. 27th and missed estimates by 3 cents. Wall Street wanted to see a loss of 1 cent and TASR reported a loss of 4 cents. Revenues were a miss too at $21.1 million for the quarter. The action this past week looks pretty negative and the close under $4.00 and its 50-dma and 100-dma is very bearish. More conservative traders may want to exit right now! I am not suggesting new positions at this time. We have a stop loss at $3.75, which should help avoid any potential loss given our entry point (3.69).

Previous Comments:
Our long-term target is $4.90.

STRATEGY: Buy TASR stock (entry $3.69), stop loss $3.75

10/23/10 Sell at least Half of our position: TASR @ 4.53 (+22.7%)
10/23/10 New Stop @ 3.75
08/30/10 TASR opens Monday at $3.69 (entry point)
08/28/10 TASR listed as a new play

Chart of TASR:


WellPoint Inc. - WLP - close: 54.34 change: -0.27

Uh-oh! Both WLP and the HMO healthcare index rolled over this past week. WLP got a little help after Citigroup downgraded the stock from a "buy" to a "hold". Meanwhile the HMO index has formed what appears to be a little double top (bearish) pattern. I am not suggesting new bullish positions in front of the company's earnings report. WLP is due to report on November 3rd before the opening bell. Analysts are estimating a profit of $1.57 a share.

Prior comments:
Our stop loss is at $52.75. Our long-term target is $69.75.

Oct 14th, 2010 - entry price on WLP @ 57.75, option @ $5.25
symbol: WLP1221A65 2012 Jan $65 call - current bid/ask $ 3.80/ 4.00
-stop loss on WLP @ 52.50

10/14/10 Play Triggered when WLP hit $57.75, option @ $5.25

Chart of WLP:


CLOSED Plays

Steel Dynamics - STLD - close: 14.54 change: +0.09

I'm giving up on STLD. The stock just won't move. The market has been marching higher and yet STLD continues to churn sideways. I'm dropping it to make room for future candidates that will move. Readers may want to put STLD on their watch list to see if shares ever breakout past $15.50, which might be a bullish entry point.

Exit early!

Sep 23, 2010 - entry price on STLD @ 14.25, option @ 1.29
symbol: STLD1119B15 2011 Feb $15 call - current bid $ 0.95 (-26.3%)
-stop loss on STLD @ 12.90

- or -

Sep 23, 2010 - entry price on STLD @ 14.25, option @ 2.50
symbol: STLD1221A15 2012 Jan $15 call - current bid $ 2.10 (-16%)
-stop loss on STLD @ 12.90

10/30/10 Exit early.
09/24/10 Play Triggered, STLD @ $14.25

Chart of STLD: