Editor's Note:

Prepare to exit our 2013 January Visa calls on Monday morning. I have updated several stop losses tonight.


Closed Plays


ABT hit our stop
MRK hit our exit target
PEP was closed on Monday morning


Play Updates


American Intl. Group - AIG - close: 35.70

Comments:
10/20/12: AIG delivered a strong week right up until Thursday's close. Then on Friday AIG gave back almost all of its gains with a -4.0% plunge. Broken resistance near $35.00 "should" provide new support but it's not guaranteed.

I am not suggesting new positions at this time.

FYI: AIG is due to report earnings on November 1st.

Earlier Comments:
Our plan was to keep our initial position size small to limit our risk. We want to exit our 2013 calls when AIG hits $39.00. We will plan on exiting our 2014 calls when shares hit $42.50.

- Suggested Positions - (small positions @ first)
May 18, 2012 - entry price on AIG @ 28.25, option @ 3.40
symbol: AIG1319A30 2013 JAN $30 call - current bid/ask $ 6.00/ 6.10

- or -

May 18, 2012 - entry price on AIG @ 28.25, option @ 4.20
symbol: AIG1418A35 2014 JAN $35 call - current bid/ask $ 5.20/ 5.40

10/06/12 adjusting our exit targets. Plan on exiting our 2013 calls when AIG hits $39.00. We'll exit our 2014 calls when AIG hits $42.50
09/08/12 Treasury has announced an $18 billion sale of AIG stock
08/18/12 new stop loss @ 29.45
06/16/12 new stop loss @ 26.95
05/18/12 triggered at $28.25
05/05/12 The U.S. government is planning to sell 164 million shares at $30.50 and AIG will probably gap down on this news.
Move the trigger down to $28.25, and move the stop loss to $25.75.
04/28/12 adjust buy-the-dip trigger to $30.00 and stop to $27.40

Current Target:$ 39.00
Current Stop loss: 29.45
Play Entered on: 05/18/12
Originally listed on the Watch List: 04/07/12


Bank of America - BAC - close: 9.44

Comments:
10/20/12: BAC posted a gain for the week but most of the time shares were churning sideways. The stock is consolidating inside a pennant-shaped pattern of lower highs and higher lows. This consolidation is narrowing and that would suggest that BAC will see a breakout, one way or the other, relatively soon.

I am not suggesting new positions at this time. With the 2013 January calls, any decline is going to hurt the calls pretty hard.

Earlier Comments:
Currently we do not have a specific exit target. The plan has been to exit in the $12.00-15.00 zone.

- Suggested Positions -

AUG 29, 2011 - entry price on BAC @ 8.10, option @ 1.50
symbol: BAC1319A10 2013 JAN $10 call - current bid/ask $ 0.39/ 0.40
(No stop loss on this position)

(2nd Position, bought the dip at $5.15)

NOV 23, 2011 - entry price on BAC @ 5.15, option @ 0.35
symbol: BAC1319A10 2013 JAN $10 call - current bid/ask $ 0.39/ 0.40
(no stop loss on this position)

09/08/12 BAC is breaking out. Consider buying 2014 calls on a dip near the $8.50-8.40 area
07/21/12 BAC reported earnings this past week and investors have decided to sell the news. The stock looks vulnerable here and readers may want to exit early!
05/19/12 BAC has pulled back to the 61.8% retracement
03/17/12 BAC has broken out from its multi-week trading range. Broken resistance near $8.30 should be new support.
...look for earlier comments in prior updates...

Current Target: $12.00-to-$15.00
Current Stop loss: see details above
Play Entered on: 08/29/11
Originally listed in the New Plays 08/27/11


Chevron Corp. - CVX - close: 113.38

Comments:
10/20/12: CVX produced a strong three-day bounce and rallied back above its 50-dma. Unfortunately the market-wide decline on Friday pushed CVX back under this moving average. If the market continues to weaken we can expect CVX to retest the $112-110 zone.

I am not suggesting new positions at this time. The $116 level is probably new short-term resistance.

FYI: CVX is due to report earnings on Nov. 2nd.

- Suggested (small) Positions -
Sep 12, 2012 - entry price on CVX @ 114.23, option @ 5.60
symbol: CVX1418a125 2014 JAN $125 Call - current bid/ask $ 4.00/ 4.20

10/10/12 CVX gaps down following lowered guidance
10/09/12 CVX lowers earnings guidance
09/15/12 new stop loss at $109.75
09/12/12 trade opened with CVX at $114.23
09/11/12 CVX closed over $114.00
09/07/12 CVX closed at $114.00. Wait for a close over $114.00.
Current bid/ask on our option is $5.75/5.90.

Current Target: $129.00
Current Stop loss: 109.75
Play Entered on: 09/12/12
Originally listed on the Watch List: 09/01/12


Discover Financial - DFS - close: 39.62

Comments:
10/20/12: DFS managed a gain for the week in spite of the two-day pullback. The stock has failed twice now in the $40.80 area. That's a bit concerning and might signal a short-term bearish double top. On a short-term basis I would expect another dip toward the 50-dma. I am not suggesting new positions.

We still have the 2014 calls and we're aiming for $44.00.

- Suggested Positions -
(Closed on Sept. 27th)
JUL 05, 2012 - entry price on DFS @ 35.28, option @ 2.15
symbol: DFS1319A37 2013 JAN $37 call - exit $3.70 (+72.0%)

- or -

JUL 05, 2012 - entry price on DFS @ 35.28, option @ 3.40
symbol: DFS1418A40 2014 JAN $40 call - current bid/ask $4.70/5.00

09/29/12 new stop loss @ 35.75
09/27/12 hits our $39.75 target to exit 2013 calls (option @ $3.70)
09/27/12 DFS beats Wall Street's earnings estimates
09/22/12 more conservative traders may want to exit right now or before DFS reports earnings on Sep 27th.
08/25/12 new stop loss @ 34.75
08/25/12 adjusted targets to $39.75 (2013 calls), $44 (2014 calls)
08/18/12 new stop loss @ 33.45
...see prior updates for early comments.

Current Target: $39.75 for the 2013 call2, $44.00 for the 2014s
Current Stop loss: 35.75
Play Entered on: 07/05/12
Originally listed on the Watch List: 06/02/12


Eastman Chemical Co. - EMN - close: 54.25

Comments:
10/20/12: This could be a volatile week for EMN. The company is due to report earnings on October 25th, after the closing bell. Right now I am concerned about EMN. You could argue the peak in September and the early peak in October have formed a bearish double top and this last week has created a new lower high. Currently our stop loss is at $52.40. That's not a great spot for it. Readers should decide to either raise their stop so it's closer to support near $54.00 or lower their stop so it's underneath the rising 200-dma (currently at 51.68). If you choose the latter stop loss you are giving EMN room to maneuver and potentially dip toward support near $52 and its 100-dma or 200-dma. I am actually moving our stop loss higher to $53.75.

If you're holding the 2013 calls, you might want to consider an early exit now. I am not suggesting new positions at this time.

Our long-term target is to exit our 2014 calls when EMN hits $69.00.

- Suggested Positions -
SEP 07, 2012 - entry price on EMN @ 56.64, option @ 2.50
symbol: EMN1319a60 2013 JAN $60 call - current bid/ask $1.50/1.60

- or -

SEP 07, 2012 - entry price on EMN @ 56.64, option @ 5.55
symbol: EMN1418a65 2014 JAN $65 call - current bid/ask $4.20/4.50

10/20/12 new stop loss @ 53.75

Current Target: $69.00
Current Stop loss: 53.75
Play Entered on: 09/07/12
Originally listed on the Watch List: 08/18/12


Family Dollar Stores - FDO - close: 65.10

Comments:
10/20/12: It was a volatile week for FDO. Actually most of the "dollar stores" were showing weakness, especially on Wednesday. There were rumors of lowered guidance for some of the stocks in this industry. FDO dipped under its 50-dma but bounced back on Wednesday. Traders have continued to sell the stock and now FDO is testing the 50-dma again.

The simple 200-dma is currently at $63.39. I am adjusting our stop loss down to $62.95. I want to give FDO room to dip to this technical support and bounce without stopping us out. I am not suggesting new positions at this time.

- Suggested Positions -
OCT 12, 2012 - entry price on FDO @ 65.88, option @ 1.70
symbol: FDO1320d75 2013 APR $75 call - current bid/ask $1.20/1.75

10/20/12 adjust stop loss to $62.95

Current Target: $74.50
Current Stop loss: 62.95
Play Entered on: 10/12/12
Originally listed on the Watch List: 10/06/12


Joy Global, Inc - JOY - close: 62.21

Comments:
10/20/12: It was a good week for JOY with shares up several days in a row. The stock is approaching what could be resistance at its September highs. I would not be surprised to see a pullback toward $60.00 soon.

New stop loss @ 54.75.

- Suggested Positions -
SEP 25, 2012 - entry price on JOY @ 57.50, option @ 7.50
symbol: JOY1418A70 2014 JAN $70 call - current bid/ask $8.65/9.10

09/25/12 triggered on a dip at $57.50
09/22/12 adjust entry to buy a dip at $57.50, stop to $53.90

Current Target: $78.50
Current Stop loss: 54.75
Play Entered on: 09/25/12
Originally listed on the Watch List: 09/15/12


Kimberly-Clark - KMB - close: 86.88

Comments:
10/20/12: We should expect some volatility on Wednesday. KMB is scheduled to report earnings on October 24th, before the opening bell. The results could send KMB past resistance near $88.00 or send it lower toward support at its 100-dma. I am not suggesting new positions at this time.

Our long-term target is $99.00.

- Suggested Positions -
OCT 02, 2012 - entry price on KMB @ 86.71, option @ 3.95
symbol: KMB1418A90 2014 JAN $90 call - current bid/ask $3.50/3.70

10/13/12 adjust stop loss to $82.90

Current Target: $99.00
Current Stop loss: 82.90
Play Entered on: 10/02/12
Originally listed on the Watch List: 09/29/12


Lennar Corp. - LEN - close: 38.73

Comments:
10/20/12: LEN and the homebuilders in general have done well this past week. LEN rallied to new multi-year highs. Shares almost hit our exit target at $39.50 with an intraday high of $39.25. I am turning more aggressive on LEN and the homebuilding stocks. I do think the $40.00 level is likely resistance and LEN will probably see a pullback on its initial test of $40.00. Keep in mind that we also have more than a year for our 2014 calls to work.

I am adjusting our exit target on our 2014 Jan $40 calls from $39.50 to $44.00. We'll move the stop loss higher to $33.90.

More conservative traders may want to take profits anyway, especially with the bid on our call up to $6.10.

I am not suggesting new positions at this time.

- Suggested Positions -
(target for 2013 calls was hit at $36.00 on 09/14/2012)
AUG 17, 2012 - entry price on LEN @ 32.72, option @ 2.07
symbol: LEN1319A35 2013 JAN $35 call - exit $3.70 (+78.7%)

- or -

AUG 17, 2012 - entry price on LEN @ 32.72, option @ 3.39
symbol: LEN1418A40 2014 JAN $40 call - current bid/ask $6.10/6.30

10/20/12 new stop loss @ 33.90, adjust exit target on 2014 calls to $44.00
09/24/12 LEN reported earnings, investors sell the news
09/22/12 new stop loss @ 33.40
09/15/12 new stop loss @ 31.40
09/14/12 2013 call target hit at $36.00, option @ 3.70 (+78.7%)
...

Current Target: $ 36.00(2013 calls), $44.00 (2014 call)
Current Stop loss: 33.90
Play Entered on: 08/17/12
Originally listed on the Watch List: 08/11/12


Monsanto Co. - MON - close: 88.69

Comments:
10/20/12: Believe it or not but MON managed a small gain for the week. Unfortunately, I am not bullish. Shares look like they are coiling for a breakdown low. If MON breaks support near $88.00 I think it will drop into the $84.00-82.00 zone before finding support. So, we either need to move our stop loss so it's under $82.00, probably under the 200-dma at $81.72, or move our stop loss higher. I am suggesting we move it higher and raise the stop to $87.45. If MON breaks down we want to exit. I'd rather close positions early and we can reconsider jumping back in down the road.

I am not suggesting new positions at this time.

- Suggested Positions -
Jul 17, 2012 - entry price on MON @ 85.84, option @ 4.35
symbol: MON1319A90 2013 JAN $90 call - current bid/ask $ 3.35/ 3.45

- or -

Jul 17, 2012 - entry price on MON @ 85.84, option @ 6.50
symbol: MON1418A100 2014 JAN $100 call - current bid/ask $ 5.55/ 5.70

10/20/12 new stop loss @ 87.45
10/03/12 MON reported earnings
09/22/12 new stop loss @ 84.75
09/08/12 new stop loss @ 83.75
08/25/12 adjust expectations, look for a dip toward $82
08/11/12 look for a pullback toward $84 soon
07/17/12 trade opens with MON at $85.84
07/16/12 MON closes above our entry requirement ($85.25)

Current Target: $99.50
Current Stop loss: 87.45
Play Entered on: 07/17/12
Originally listed on the Watch List: 07/14/12


Pfizer Inc. - PFE - close: 25.76

Comments:
10/20/12: PFE has continued to rally and shares hit the $26 level this past week. PFE is at multi-year highs and readers may want to take profits now ahead of the company's earnings report. PFE is scheduled to report earnings on Oct. 30th, before the opening bell.

I am not suggesting new positions at this time and we will raise our stop loss to $23.90.

- Suggested Positions -
Jul 18, 2012 - entry price on PFE @ 23.53, option @ 1.30
symbol: PFE1418A25 2014 JAN $25 call - current bid/ask $ 2.05/ 2.09

10/20/12 new stop loss @ 23.90
10/06/12 new stop loss @ 23.40
09/29/12 new stop loss @ 22.75
09/22/12 new stop loss @ 22.45
09/08/12 new stop loss @ 21.90
08/06/12 new stop loss @ 21.35
07/18/12 trade opens. PFE @ 23.53
07/17/12 PFE meets our entry requirements (close over $23.40)
06/23/12 removed the 2013 call. We'll only play the 2014s
04/28/12 do not launch positions prior to the earnings report on May 1st.

Current Target: $28.00
Current Stop loss: 23.90
Play Entered on: 07/18/12
Originally listed on the Watch List: 04/21/12


SIRIUS XM Radio - SIRI - close: 2.92

Comments:
10/20/12: SIRI has managed to extend its gains once again. The stock is at new multi-year highs and currently up five weeks in a row. Odds are good that SIRI will see some profit taking sooner or later. That "sooner" might be the company's earnings report. SIRI is scheduled to report earnings on October 30th. After a five-week gain the earnings announcement would make a good excuse to sell and take profits.

I am not suggesting new positions at this time. Our long-term target is $3.90.

- Suggested Positions -
OCT 04, 2012 - entry price on SIRI @ 2.75, option @ 0.38
symbol:SIRI1418A3 2014 JAN $3.00 call - current bid/ask $ 0.45/ 0.49

- or -

Buy the Stock: Entry @ $2.75 on Oct. 4th, 2012

10/20/12 warning! SIRI is up five weeks in a row and growing overbought. The stock could see a sell-off on its earnings report

Current Target: $ 3.90
Current Stop loss: 2.29
Play Entered on: 10/04/12
Originally listed on the Watch List: 09/29/12


Spreadtrum Communications - SPRD - close: 20.88

Comments:
10/20/12: SPRD really underperformed the market on Friday with a -4.4% decline. Shares had failed at resistance near $22.00 for the prior three days in a row. In spite of the pullback on Friday SPRD still posted a gain for the week. I would expect a dip back toward support near $20 and its 50-dma.

FYI: Earnings are expected in early November.

- Suggested Positions -
Sep 07, 2012 - entry price on SPRD @ 20.59, option @ 1.95
symbol:SPRD1319a22.5 2013 JAN $22.5 call - current bid/ask $ 1.30/ 1.50

10/06/12 SPRD looks vulnerable. Investors may want to exit early

Current Target: $24.00
Current Stop loss: 18.90
Play Entered on: 09/07/12
Originally listed on the Watch List: 08/25/12


Time Warner - TWX - close: 44.93

Comments:
10/20/12: I want to warn you that TWX looks vulnerable here. The stock chopped sideways all week and ended on a down note with a -2.0% drop on Friday. This looks like a new lower high after weeks of churning sideways. Odds are growing that TWX will see a significant correction lower. I'm thinking maybe a dip back into the $42-40 zone.

We will raise our stop loss to $43.75. If TWX breaks support near $44 and its 50-dma we'll get stopped out. Readers may want to just exit early now. I am not suggesting new positions at this time.

- Suggested Positions -
(closed 2013 call on Sep 24th)
Aug 03, 2012 - entry price on TWX @ 40.66, option @ 1.79
symbol: TWX1319A42 2013 JAN $42 call - exit $4.55 (+154.1%)

- or -

Aug 03, 2012 - entry price on TWX @ 40.66, option @ 2.85
symbol: TWX1419A45 2014 JAN $45 call - current bid/ask $ 4.10/ 4.25

10/20/12 new stop loss @ 43.75
10/06/12 new stop loss @ 42.45
09/24/12 closed 2013 calls at the open ($4.55, +154.1%)
09/22/12 new stop loss @ 40.75.
Plan on exiting our 2013 calls on Monday morning at the open
09/08/12 new stop loss @ 39.85
08/11/12 readers might want to lock in gains now (+49% on the 2013 calls) in just two weeks and then jump back in on a correction in the stock.
08/03/12 TWX opens at $40.66 (trade opens)
08/02/12 TWX meets our entry requirement with a close over $40.50

Current Target: $49.00
Current Stop loss: 43.75
Play Entered on: 08/03/12
Originally listed on the Watch List: 07/21/12


U.S. Bancorp - USB - close: 34.23

Comments:
10/20/12: The bounce in USB is not seeing much follow through. I am concerned that shares are producing a new trend of lower highs. I fear a correction will pull it back down into the $33-32 zone. I am not suggesting new positions at this time.

- Suggested Positions -
Jul 20, 2012 - entry price on USB @ 33.62, option @ 1.39
symbol: USB1319A35 2013 JAN $35 call - current bid/ask $ 0.91/ 0.94

- or -

Jul 20, 2012 - entry price on USB @ 33.62, option @ 3.10
symbol: USB1418A35 2014 JAN $35 call - current bid/ask $ 2.74/ 2.83

09/15/12 new stop loss @ 31.40
07/20/12 trade opens Friday morning
07/19/12 USB closes above our trigger <33.50
07/14/12 adjusted strategy: wait for a close over $33.50, stop 29.90
06/30/12 readers might want to consider an alternative entry point
06/23/12 adjust entry trigger to $29.00, stop to 26.40
06/02/12 adjust entry trigger to $28.00

Current Target: $39.50
Current Stop loss: 31.40
Play Entered on: 07/20/12
Originally listed on the Watch List: 05/19/12


Visa, Inc. - V - close: 139.97

Comments:
10/20/12: Midweek Visa had rallied to new all-time highs and traded above $143 a share. Yet the market's widespread profit taking pulled shares back down to their 10-dma on Friday. If the market continues to show weakness I would not be surprised to see V dip back toward the $136-134 area.

Please note that I am suggesting we exit our 2013 Jan calls at the opening bell on Monday morning. We'll keep our 2014 options. I am not suggesting new positions at current levels.

FYI: Visa is scheduled to report earnings on Oct. 31st.

Earlier Comments:
Our long-term target is $149.00 (although we'll likely exit our 2013 calls before V reaches our target).

- Suggested Positions -
JUL 03, 2012 - entry price on V @ 126.49, option @ 5.85
symbol: V1319A135 2013 JAN $135 call - current bid/ask $ 8.70/ 8.90

- or -

JUL 03, 2012 - entry price on V @ 126.49, option @ 11.95
symbol: V1418A140 2014 JAN $140 call - current bid/ask $16.30/16.65

10/20/12 prepare to exit our 2013 calls at the open on Monday
10/13/12 readers may want to take profits early if you're holding the 2013 calls.
10/06/12 new stop loss @ 129.00
08/06/12 new stop loss @ 119.75
07/16/12 V pops on news of a settlement in 7-year lawsuit
07/03/12 trade opens with Visa at $126.49
07/02/12 Visa closes above our trigger @ 125.50

Current Target: $149.00
Current Stop loss: 129.00
Play Entered on: 07/03/12
Originally listed on the Watch List: 06/30/12


Wells Fargo & Co - WFC - close: 34.34

Comments:
10/20/12: Hmm... the recent action in WFC is not very encouraging. The bounce off technical support near its 100-dma and 150-dma didn't get very far. Shares are reversing under resistance in the 34.50-35.00 area where there is a small cloud of moving averages. I suspect that we're going to see WFC correct lower and potentially drop toward $33 and its simple 200-dma. I am not suggesting new positions at this time.

- Suggested Positions -
SEP 14, 2012 - entry price on WFC @ 35.60, option @ 2.26
symbol: WFC1418a40 2014 JAN $40 call - current bid/ask $ 1.48/ 1.54

Current Target: $44.00
Current Stop loss: 32.75
Play Entered on: 09/14/12
Originally listed on the Watch List: 08/06/12


CLOSED Plays


Abbott Labs - ABT - close: 66.15

Comments:
10/20/12: It was an ugly week for ABT. The Monday-Wednesday action produced a three-day bearish candlestick reversal pattern. Then on Wednesday night ABT reported earnings that beat estimates by two cents. Yet ABT missed the revenue estimate and provided disappoitning guidance.

The stock gapped down on its earnings report Thursday morning and opened at $66.08. Our stop loss was at $67.75 so the play was closed immediately.

- Suggested Positions -
(closed on Sept. 24th)
JUL 02, 2012 - entry price on ABT @ 64.22, option @ 1.91
symbol: ABT1319A65 2013 JAN $65 call - exit $5.10 (+167.0%)

- or -

JUL 02, 2012 - entry price on ABT @ 64.22, option @ 4.28
symbol: ABT1418A65 2014 JAN $65 call - exit $4.60 (+7.4%)

10/18/12 stopped out on gap down at $66.08
10/13/12 Readers may want to take profits prior to earnings on Oct. 17th
10/06/12 Strategy update: Plan to exit at $73.00. If that does not happen, plan to exit prior to earnings on Oct. 17th. We are raising the stop loss to $67.75
09/24/12 closed 2013 calls @ $5.10 (+167%)
09/22/12 new stop loss @ 63.75
Prepare to exit our 2013 calls on Monday. current bid is $5.15
...see early updates for older notes...

Chart of ABT:

Current Target:$73.00
Current Stop loss: 67.75
Play Entered on: 07/02/12
Originally listed on the Watch List: 06/23/12


Merck & Co - MRK - close: 47.03

Comments:
10/20/12: Target achieved.

MRK continued to rally last week and hit the $48.00 level before reversing on Friday. Our exit target was hit at $47.50 on October 17th.

- Suggested Positions -
Jun 25, 2012 - entry price on MRK @ 39.91, option @ 3.14
symbol: MRK1418A40 2014 JAN $40 call - exit $8.00 (+154.7%)

10/17/12 target hit
10/06/12 readers may want to take profits now with the bid on our call at $7.10. New stop loss @ 42.75
09/22/12 new stop loss @ 41.85
08/11/12 new stop loss @ 40.90
07/14/12 new stop loss @ 39.49
07/14/12 Readers will want to seriously consider taking profits now.
MRK is at $43.47, option @ 5.15 (+93.9%)
06/25/12 MRK gap down at $39.91
06/22/12 MRK met our entry point requirement with a close over $40.00. Launch positions on Monday morning (conservative traders can wait for a dip to the 10-dma instead).

Chart of MRK:

Current Target: $47.50
Current Stop loss: 42.75
Play Entered on: 06/25/12

Originally listed on the Watch List: 05/05/12


Pepsico, Inc. - PEP - close: 69.88

Comments:
10/20/12: Last weekend we decided it was time to exit PEP before shares broke down any further. The plan was to exit on Monday morning. PEP opened on Oct. 15th at $70.04.

- Suggested Positions -
Jul 02, 2012 - entry price on PEP @ 70.34, option @ 2.85
symbol: PEP1418A75 2014 JAN $75 call - exit $2.07 (-27.3%)

10/15/12 planned exit at the open
10/13/12 prepare to exit on Monday morning
09/22/12 new stop loss @ 69.40, more conservative traders may want to exit early now.
08/18/12 new stop loss @ 68.75
08/06/12 new stop loss @ 67.75
07/02/12 PEP opened at $70.34
07/02/12 launch positions at the open
06/29/12 PEP meets our entry requirement with a close above $70.25.

Chart of PEP:

Current Target: $79.00
Current Stop loss: 69.40
Play Entered on: 07/02/12
Originally listed on the Watch List: 05/26/12