Editor's Note:

Overall our play list held up relatively well. Some of our candidates hit new relative highs. I am concerned about our WFC trade and suggest we exit immediately. Readers may want to go ahead and take profits on our remaining Visa positions.


Closed Plays


None. No closed plays this week.


Play Updates


American Intl. Group - AIG - close: 32.68

Comments:
11/03/12: Ouch! The combination of Friday's market decline and the reaction to AIG's earnings report was negative. The results came out Thursday night and AIG actually beat estimates by 12 cents. Yet the stock gapped open lower on Friday morning and plunged to a -7.1% decline. Shares are sitting on support near $32.50 and its 150-dma.

If the stock market continues to trend lower then we could see AIG drop to the next level of support near $30.00. I am not suggesting new positions at this time.

NOTE: with only three months left on our 2013 calls, readers may want to exit these calls early right now to avoid or limit any losses.

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 $ 3.35/ 3.45

- or -

May 18, 2012 - entry price on AIG @ 28.25, option @ 4.20
symbol: AIG1418A35 2014 JAN $35 call - current bid/ask $ 3.65/ 3.75

11/02/12 AIG gapped down following its earnings report
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: 9.85

Comments:
11/03/12: Wow! BAC outperformed the market last week with a +8% gain and a breakout to new seven-month highs. Shares are now facing round-number resistance at the $10.00 mark. A close over $10.00 and the March 2012 high of $10.10 could inspire more buying interest.

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 $ 0.56/ 0.57
(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 $ 0.56/ 0.57
(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


Capital One Financial Corp. - COF - close: 61.40

Comments:
11/03/12: COF continues to trend higher. Shares pushed past resistance near $61.00 to set new multi-year highs. While the trend in COF is bullish I am a little hesitant to launch new positions given the weakness in the major indices.

Earlier Comments:
The P&F chart is bullish with a $71 target. We are aiming for $74.00. COF can be somewhat volatile so we want to keep our position size small. We'll have to keep an eye on potential resistance at $70.00.

- Suggested Positions - (small positions)
OCT 22, 2012 - entry price on COF @ 61.14, option @ 5.65
symbol: COF1418a65 2014 JAN $65 call - current bid/ask $ 5.70/ 6.00

Current Target:$ 74.00
Current Stop loss: 56.85
Play Entered on: 10/22/12
Originally listed on the Watch List: 10/06/12


Cree, Inc. - CREE - close: 30.52

Comments:
11/03/12: CREE outperformed the market last week and broke through resistance at the $30.00 level. This stock was a watch list candidate. Our plan was to wait for shares to close over $30.25. The stock closed at $30.30 on October 31st. Our trade opened on Thursday on the gap down at $29.85. Fortunately CREE surged to a new high as traders bought the dip.

Our stop loss is currently at $27.45. Our long-term target is $39.00.

- Suggested Positions - (small positions)
NOV 01, 2012 - entry price on CREE @ 29.85, option @ 3.80
symbol:CREE1418a35 2014 JAN $35 call - current bid/ask $ 3.75/ 3.90

Chart of CREE:

Current Target:$ 39.00
Current Stop loss: 27.45
Play Entered on: 11/01/12
Originally listed on the Watch List: 10/20/12


Discover Financial - DFS - close: 40.98

Comments:
11/03/12: DFS tagged another record high on Friday morning, hitting $41.77 intraday. Shares did reverse from its Friday morning gains and technically Friday's session looks like a bearish reversal pattern. I would look for a dip back toward $40.00 or the 40-dma near $39.50. I am not suggesting new positions.

Please note our new stop loss at $36.45.

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 $5.40/5.80

11/03/12 new stop loss @ 36.45
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: 36.45
Play Entered on: 07/05/12
Originally listed on the Watch List: 06/02/12


Family Dollar Stores - FDO - close: 65.93

Comments:
11/03/12: FDO managed to eke out another gain for the week yet shares seemed to be struggling with resistance at the $67.00 level over the last couple of days. I would wait for a close over $67.00 before considering new bullish positions.

- Suggested Positions -
OCT 12, 2012 - entry price on FDO @ 65.88, option @ 1.70
symbol: FDO1320d75 2013 APR $75 call - current bid/ask $1.25/1.45

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: 63.99

Comments:
11/03/12: JOY outperformed the market with a sharp two-day gain on Wednesday and Thursday thanks in part to some bullish analyst comments. Yet shares reversed on Friday (as did most of the market). The Friday's reversal does look pretty ugly and I would expect a dip back toward the $61-60 zone.

I am raising our stop loss to $55.75 but more conservative traders may want to raise their stop closer to the $58.00 level instead.

- Suggested Positions -
SEP 25, 2012 - entry price on JOY @ 57.50, option @ 7.50
symbol: JOY1418A70 2014 JAN $70 call - current bid/ask $8.95/9.35

11/03/12 new stop loss @ 55.75
10/26/12 JOY seeing volatility on rumors it is a takeover target
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: 55.75
Play Entered on: 09/25/12
Originally listed on the Watch List: 09/15/12


Lennar Corp. - LEN - close: 37.31

Comments:
11/03/12: LEN managed a gain for the week yet Friday's session was bearish. The stock reversed near its recent highs and produced a clearly defined bearish engulfing candlestick reversal pattern. These patterns normally need to see confirmation but I am expecting a pullback. More conservative traders may want to raise their stops so it's closer to the 50-dma. Currently our stop is at $33.90.

Earlier Comments:
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.

- 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 $5.20/5.45

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


Pfizer Inc. - PFE - close: 24.55

Comments:
11/03/12: Ouch! PFE hit some profit taking this past week. I warned readers that the company's earnings report could spark some volatility. PFE announced earnings on November 1st. Earnings of 53 cents a share was a penny above estimates. Revenues were a miss at $13.9 billion for the quarter. PFE's management lowered their 2012 guidance and tried to soften the blow of this bearish news by announcing another $10 billion stock buyback program.

PFE found support near $24.40 on the selling but I am not convinced the correction is over. Odds are good we'll see PFE test the $24.00 level and its 100-dma. If the stock drops any further it will hit our stop loss at $23.90.

I am not suggesting new positions at this time.

- Suggested Positions -
Jul 18, 2012 - entry price on PFE @ 23.53, option @ 1.30
symbol: PFE1418A25 2014 JAN $25 call - current bid/ask $ 1.48/ 1.51

11/01/12 PFE reported earnings
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: 2.90

Comments:
11/03/12: SIRI reported earnings on November 1st. The results missed Wall Street estimates by a penny. Revenues were in-line with estimates and management issued guidance that was in-line with prior estimates. SIRI said their total paid subscribers hit a record high of 23.4 million.

Shares of SIRI held up well and appear to be breaking out from a bull-flag type of consolidation. I am raising our stop loss to $2.45. 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 $ 0.43/ 0.48

- or -

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

11/03/12 new stop loss @ 2.45
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: 2.45
Play Entered on: 10/04/12
Originally listed on the Watch List: 09/29/12


Spreadtrum Communications - SPRD - close: 21.49

Comments:
11/03/12: SPRD had rallied to new 2012 highs last week before giving it all back with Friday's -6.0% plunge. I could not find any news to account for SPRD's relative weakness on Friday. It just looks like profit taking after a three-week rally higher. The stock should find some technical support at its 50-dma near $20.60. The question now is how will SPRD fare after its earnings report. The company is due to report earnings on November 8th.

I am not suggesting new positions at this time.

- 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 $ 1.60/ 1.75

10/27/12 SPRD has reversed higher and broken through resistance
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


U.S. Bancorp - USB - close: 33.43

Comments:
11/03/12: I don't see anything new in USB. Traders bought the dip near support at $33.00 but the bounce failed at resistance near $34 and its 50-dma. I am expecting a pullback lower toward its 200-dma near $32.00. 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 $ 0.55/ 0.58

- or -

Jul 20, 2012 - entry price on USB @ 33.62, option @ 3.10
symbol: USB1418A35 2014 JAN $35 call - current bid/ask $ 2.31/ 2.41

09/15/12 new stop loss @ 31.40
07/20/12 trade opened 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: 143.40

Comments:
11/03/12: It was a bullish week for Visa with shares soaring to new highs following its earnings report. Visa reported on October 31st. The company beat estimates by four cents with a profit of $1.54 a share. Revenues also exceeded estimates at $2.73 billion. If that wasn't good enough management raised their quarterly cash dividend by +50% and announced a $1.5 billion stock buyback program.

Shares of Visa broke out to new highs following this report and then spiked to $146.41 on Friday morning before succumbing to the market's widespread declines on Friday. Readers may want to seriously consider an early exit now to lock in gains. While more aggressive traders may want to raise their exit target since we still have over a year on our 2014 calls. Currently our exit target is $149.00 for the 2014 calls. I am raising our stop loss to $134.00.

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

- Suggested Positions -
(Closed the 2013 calls on Oct. 22nd at the open)
JUL 03, 2012 - entry price on V @ 126.49, option @ 5.85
symbol: V1319A135 2013 JAN $135 call - exit @ $7.95 (+35.8%)

- or -

JUL 03, 2012 - entry price on V @ 126.49, option @ 11.95
symbol: V1418A140 2014 JAN $140 call - current bid/ask $17.55/18.20

11/03/12 New stop loss @ 134.00
10/31/12 Visa delivers a bullish earnings report
10/22/12 closed 2013 Jan call at the open
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: 134.00
Play Entered on: 07/03/12
Originally listed on the Watch List: 06/30/12


Wells Fargo & Co - WFC - close: 33.74

Comments:
11/03/12: I am growing concerned with our WFC trade. The stock is underperforming many of its peers in the financial sector. Shares look poised to breakdown under support near $33.50 soon. While the $33.00 level and its simple 200-dma could offer some support I think odds are growing that WFC is going to hit our stop loss at $32.75.

I am suggesting we exit all positions on Monday morning to avoid further losses. We can look at WFC again down the road if shares find new strength.

- Suggested Positions -
SEP 14, 2012 - entry price on WFC @ 35.60, option @ 2.26
symbol: WFC1418a40 2014 JAN $40 call - current bid/ask $ 1.31/ 1.36

11/03/12 prepare to exit positions on Monday morning at the open

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