Editor's Note:

Our play list is holding up pretty well given the market's midweek reversal lower. We actually had a number of candidates post gains for the week. I have adjusted several stop losses tonight.


Closed Plays


FDO was stopped out.


Play Updates


Adobe Systems - ADBE - close: 37.56

Comments:
12/15/12: It was a bullish week for ADBE. The company reported earnings on Dec. 13th. The results beat by 13 cents and beat the revenue estimate as well. The stock could have sold off on management's lowered guidance. Yet the earnings dip is expected to be temporary. ADBE management said they are moving toward a subscription model that will help generate stronger revenues in 2014 and beyond. The stock gapped open higher on Friday morning and closed near three-year highs. I would expect a dip back toward $36 to fill the gap. We are raising our stop loss to $33.75.

- Suggested Positions -
DEC 05, 2012 - entry price on ADBE @ 35.30, option @ 2.32
symbol:ADBE1418a40 2014 JAN $40 call - current bid/ask $ 3.15/ 3.35

12/15/12 new stop loss @ 33.75
12/13/12 ADBE reports earnings.

Current Target:$ 44.00
Current Stop loss: 33.75
Play Entered on: 12/05/12
Originally listed on the Watch List: 11/03/12


American Intl. Group - AIG - close: 33.94

Comments:
12/15/12: The action in AIG looked a lot like the rest of the market. The stock was up on Tuesday, reversed on Wednesday and continued to sink Thursday and Friday. The midweek reversal could be a new lower high. Shares did post a loss for the week, ending a three-week rally. I would not be surprised to see a correction into the $33-32 area. I am not suggesting new positions at this time.

Don't forget that we have less than two months left on our January 2013 calls. Readers may want to exit early now. Our exit target for these calls is $37.00.

Earlier Comments:
Our plan was to keep our initial position size small to limit our risk. 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 $ 4.05/ 4.15

- or -

May 18, 2012 - entry price on AIG @ 28.25, option @ 4.20
symbol: AIG1418A35 2014 JAN $35 call - current bid/ask $ 3.95/ 4.15

12/15/12 readers may want to exit our 2013 calls now.
12/08/12 move the target for the 2013 calls to $37.00
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:$ 2013 call: $37.00, 2014 calls: $42.50
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: 10.58

Comments:
12/15/12: BAC spent the week consolidating sideways. The lack of profit taking is actually a good sign. However, we have a decision to make. There is only five weeks left on our January 2013 calls. If BAC corrects lower from here it's going to hurt our option values. The $10.00 level should be new support but if BAC meanders sideways in the $10.00-10.70 zone for a few weeks it's going to damage our option values. More conservative traders may want to exit now.

Please note that for our November 23rd, 2011 positions (2013 Jan $10 call) we are planning to exit if BAC hits $10.90. I am assigning an exit target of $11.50 for our Aug. 29th, 2011 (2013 Jan $10 call) positions. I am also assigning a $9.85 stop loss but if BAC falls that low it's going to crush our option values.

If you happen to be looking for a new entry point I would wait for a dip to $10.00 and then buy calls on a bounce.

- Suggested Positions -

AUG 29, 2011 - entry price on BAC @ 8.10, option @ 1.50
symbol: BAC1319A10 2013 JAN $10 call - current bid/ask $ 0.78/ 0.80
(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 $ 0.78/ 0.80
(no stop loss on this position)

12/15/12 new stop loss @ 9.85
12/15/12 assigning an $11.50 exit target for the Aug. 2011 position
12/08/12 assigning a $10.90 exit target for the Nov. 2011 position
11/10/12 no new positions at this time.
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: *see play details
Current Stop loss: see details above
Play Entered on: 08/29/11
Originally listed in the New Plays 08/27/11


CONSOL Energy Inc. - CNX - close: 33.70

Comments:
12/15/12: CNX managed to eke out a gain for the week while most of the market posted a loss. I remain cautious on the trade. Shares are trying to get past their 300-dma and if they are successful the next hurdle is resistance at $35.00. I am not suggesting new positions at this time.

Earlier Comments:
We want to keep our position size small. Our long-term target is $42.50. The Point & Figure chart for CNX is bullish with a long-term $47 target.

- Suggested Positions - (small positions)
NOV 09, 2012 - entry price on CNX @ 32.50, option @ 3.24
symbol: CNX1418a40 2014 JAN $40 call - current bid/ask $ 2.89/ 2.99

12/02/12 readers may want to exit early now
11/09/12 triggered on a dip at $32.50
11/03/12 adjust the trigger down to $32.50, stop to $29.75
10/27/12 adjust the trigger down to $33.00

Current Target: $42.50
Current Stop loss: 29.75
Play Entered on: 11/09/12
Originally listed on the Watch List: 10/13/12


Cree, Inc. - CREE - close: 33.92

Comments:
12/15/12: CREE managed another weekly gain. Shares hit new 2012 highs with its rally toward $35.00. Unfortunately the $35.00 level held as resistance and CREE corrected back toward $33. The stock is up four weeks in a row and up eight out of the last nine weeks. It might be time for a deeper pullback. I would not be surprised to see a correction into the $32-30 zone. We will raise our stop loss up to $29.45.

Unfortunately, something has happened and the market makers have lost their senses. The bid/ask spread on our 2014 calls has exploded to untradeable levels.

- 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 $ 3.25/ 7.80

12/15/12 new stop loss @ 29.45
12/15/12 bid/ask spread on our 2014 calls is too wide!
12/02/12 new stop loss @ 28.45

Current Target:$ 39.00
Current Stop loss: 29.45
Play Entered on: 11/01/12
Originally listed on the Watch List: 10/20/12


Discover Financial - DFS - close: 39.54

Comments:
12/15/12: Warning! Our DFS trade could be in trouble. After four weeks of trading inside the $40-42 zone shares of DFS broke down under the $40.00 level on Friday. It also broke down under its 50-dma this past week. That doesn't exactly inspire any confidence. Why are investors selling the stock ahead of DFS' earnings report? The company is scheduled to report on December 20th, before the opening bell. Wall Street expects a profit of $1.11 a share.

More conservative traders may want to exit positions prior to DFS' earnings report (you'll have to exit prior to the close on the 19th). Or you could exit now to lock in a gain.

I am raising our stop loss to $37.75 instead. The $38.00 level should offer some support. However, if DFS disappoints in its earnings report I do expect we'll get stopped out. I am not suggesting new positions at this time.

We still have the 2014 calls and we're aiming for $44.00. Aggressive traders could aim higher.

- 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 $4.50/4.80

12/15/12 new stop loss @ 37.75
12/02/12 new stop loss @ 36.95
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: $ $44.00 for the 2014s
Current Stop loss: 37.75
Play Entered on: 07/05/12
Originally listed on the Watch List: 06/02/12


Expedia Inc. - EXPE - close: 58.99

Comments:
12/15/12: EXPE spent the week churning sideways and eventually settled with close to a 90-cent loss for the week. EXPE also began trading ex-dividend on Dec. 13th. This had an impact on our option symbol (noted below). EXPE looks a little vulnerable here. Readers may want to wait for a new close above $61.00 before considering new bullish positions.

Earlier Comments:
I would consider this a more aggressive, higher-risk trade because EXPE can be so volatile. We will want to keep our position size small to limit our risk.

- Suggested Positions -
NOV 29, 2012 - entry price on EXPE @ 61.84, option @ 6.00
symbol: EXPE1418a74.48 '14 JAN $74.48 call - current bid/ask $4.50/4.90

12/13/12 EXPE began trading ex-dividend (52cents). The option strike on our 2014 calls moved from $75.00 to $74.48.

Current Target: $79.00
Current Stop loss: 54.40
Play Entered on: 11/29/12
Originally listed on the Watch List: 11/24/12


First Solar Inc. - FSLR - close: 32.56

Comments:
12/15/12: It was a strong week for FSLR. The solar industry got a boost from news that China was going to spend more on solar energy. This helped fuel FSLR's rise to new multi-month highs. There were dueling analyst opinions on whether or not FSLR was a buy at current levels. The stock is starting to look a bit overbought with its big three-week rally. More conservative traders may want to start taking profits now. Our long-term target remains $39.75.

Earlier Comments:
FYI: Readers will be interested to hear that there seem to be rumors that FSLR might be a takeover candidate and that could be helping fuel gains.

- Suggested Positions -
NOV 28, 2012 - entry price on FSLR @ 26.20, option @ 5.00
symbol: FSLR1418a30 2014 JAN $30 call - current bid/ask $8.15/8.70

12/15/12 readers may want to take profits early. The bid on our call is up to $8.15.
12/08/12 new stop loss @ 24.40

Current Target: $39.75
Current Stop loss: 24.40
Play Entered on: 11/28/12
Originally listed on the Watch List: 11/10/12


General Electric - GE - close: 21.62

Comments:
12/15/12: GE extended its gains for another week so now the stock is up four weeks in a row. The breakout past resistance near $21.50 and its 50-dma is bullish. On Friday GE's board of directors announced a +12% increase in the quarterly cash dividend to 19 cents a share and an additional $10 billion in a stock buyback program. After a four-week rally it might be time for a pullback in GE.

- Suggested Positions -
NOV 14, 2012 - entry price on GE @ 20.25, option @ 0.42
symbol: GE1418a25 2014 JAN $25 call - current bid/ask $0.61/0.63

12/14/12 GE increased its dividend to 19 cents
11/24/12 new stop loss @ 19.75
11/14/12 triggered at $20.25
11/10/12 adjust the trigger down to $20.25, just above the 200-dma, stop to $19.25
10/27/12 move the buy-the-dip trigger down to $20.50
10/20/12 adjust the buy-the-dip trigger to $21.00 and our stop to $19.45

Current Target: $27.50
Current Stop loss: 19.75
Play Entered on: 11/14/12
Originally listed on the Watch List: 09/22/12


Lennar Corp. - LEN - close: 37.31

Comments:
12/15/12: LEN was looking vulnerable a week ago but shares managed a meager comeback this past week. The stock seems to be coiling between its long-term up trend of higher lows and resistance near $40.00.

I am not suggesting new positions. Currently our stop loss is at $33.90. More conservative traders may want to move theirs closer to $35.00 instead.

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 $4.70/4.80

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


L-3 Communications - LLL - close: 75.28

Comments:
12/15/12: LLL is holding up pretty well considering Washington's lack of progress on the fiscal cliff talks. Just in case you forgot, LLL is a major defense contractor to the U.S. military. A significant part of the fiscal cliff is a big reduction in military spending. That could impact LLL. More importantly it could impact investor perception of how LLL might be affected by the spending cut backs. In the market, perception is reality. Whether LLL is effected by the cuts or not if traders think LLL might be negatively impacted it could send the stock lower. More conservative traders may want to scale back their position size or even exit this particular trade completely due to the fiscal cliff issue.

On a short-term basis LLL reversed on Wednesday, like much of the market did, and now LLL is testing round-number support at $75.00. I am not suggesting new positions.

- Suggested Positions - (small positions)
NOV 05, 2012 - entry price on LLL @ 75.64, option @ 4.40
symbol: LLL1418a80 2014 JAN $80 call - current bid/ask $ 3.60/ 4.00

Current Target:$ 85.00
Current Stop loss: 71.85
Play Entered on: 11/05/12
Originally listed on the Watch List: 10/20/12


Motorola Solutions - MSI - close: 54.05

Comments:
12/15/12: MSI continued to churn sideways most of the week but the profit taking started to pick up on Thursday and Friday. MSI is now threatening to breakdown under short-term support near $54.00. If that happens the next level of support is the $52.00 level. Considering the action in MSI over the last two weeks and how the major indices look a little vulnerable here, I would not be surprised to see a correction back to $52.00. I am not suggesting new positions at the moment.

Our long-term target is $65.00. Currently the Point & Figure chart is bullish and is forecasting at $70 target.

- Suggested Positions -
NOV 26, 2012 - entry price on MSI @ 54.11, option @ 2.93
symbol: MSI1418a60 2014 JAN $60 call - current bid/ask $ 2.57/ 2.72

Current Target:$65.00
Current Stop loss: 49.75
Play Entered on: 11/26/12
Originally listed on the Watch List: 11/17/12


Nokia Corp. - NOK - close: 3.82

Comments:
12/15/12: NOK is holding up well. The stock only lost three cents for the week. Traders have been buying the dips and NOK seems to be building a short-term bullish consolidation pattern. The stock got some help from a news story on Thursday night that a federal jury had ruled that Apple's (AAPL) iPhone design infringed on three patents that happen to be party owned by NOK.

Shares of NOK looks poised to breakout higher but I want to warn you that the $4.00 level and the 300-dma near $4.00 could be resistance. I am raising our stop loss up to $3.25.

I am not suggesting new positions at the moment.

Earlier Comments:
The plan was to buy NOK the stock or the 2014 calls.

- Suggested Positions - (small positions)
NOV 20, 2012 - entry price on NOK @ 2.97, option @ 0.78
symbol: NOK1418a3 2014 JAN $3 call - current bid/ask $ 1.32/ 1.40

- or -

Buy NOK stock: entry @ 2.97

12/15/12 new stop loss @ 3.25
12/08/12 new stop loss @ $2.95

Current Target:$ 4.95
Current Stop loss: 3.25
Play Entered on: 11/20/12
Originally listed on the Watch List: 11/17/12


Starbucks Corp. - SBUX - close: 53.36

Comments:
12/15/12: SBUX spent the week consolidating sideways along with a couple of failed rallies near the $54.00 level. I still think we might get a better entry point on a dip near $52.50-52.00 if we're patient.

- Suggested Positions -
DEC 07, 2012 - entry price on SBUX @ 53.43, option @ 3.80
symbol:SBUX1418a60 2014 JAN $60 call - current bid/ask $ 3.65/ 3.75

Current Target:$ 62.00
Current Stop loss: 47.75
Play Entered on: 12/07/12
Originally listed on the Watch List: 12/02/12


Southern Copper Corp - SCCO - close: 38.20

Comments:
12/15/12: Precious metals and copper all turned lower this past week but SCCO only churned sideways. The Wednesday-Thursday pullback in SCCO still looks like a potential bearish reversal and if we see shares close under $37.50 I would expect a dip into the $36.00-35.00 zone. I am not suggesting new positions at this time.

Earlier Comments:
The plan was to keep our position size small to start.

- Suggested *SMALL* Positions -
NOV 06, 2012 - entry price on SCCO @ 35.78, option @ 2.30
symbol:SCCO1418a40 2014 JAN $40 call - current bid/ask $ 2.70/ 3.00

11/24/12 new stop loss @ 33.25
11/06/12 trade opened on gap down at $35.78, below our trigger.
(gap down was due to SCCO trading ex-dividend)

Current Target: $44.75
Current Stop loss: 33.25
Play Entered on: 11/06/12
Originally listed on the Watch List: 10/20/12


SIRIUS XM Radio - SIRI - close: 2.91

Comments:
12/15/12: SIRI managed a gain for the week and it's all because of a rally in the last ten minutes of the day on Friday. The stock was actually sinking to new two-week lows before suddenly reversing course and surging to a +7% gain. The move was fueled by news that the Copyright Royalty Board delivered a favorable ruling for SIRI. Essentially the board of judges set the rate that SIRI has to pay royalties on the songs it plays. The new rate will increase from 8% now to 9% in 2013 and then half a percent every year until 2017. This news was better than expected and shares of SIRI soared on strong volume.

If you were looking for a new entry point then this is it. I am raising our stop loss to $2.57.

- Suggested Positions -
OCT 04, 2012 - entry price on SIRI @ 2.75, option @ 0.38
symbol:SIRI1418A3 2014 JAN $3.00 call - current bid/ask $ 0.42/ 0.46

- or -

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

12/15/12 new stop loss @ 2.57
12/06/12 SIRI announces a stock buyback program and 5-cent dividend
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: 2.57
Play Entered on: 10/04/12
Originally listed on the Watch List: 09/29/12


Teck Resources - TCK - close: 35.67

Comments:
12/15/12: Our new trade on TCK is holding up in spite of the market's weakness. The stock opened on Monday at $35.19 and the option opened at $3.40. Shares reversed on Tuesday but traders bought the dip on Thursday and TCK was outperforming the market on Friday. I would still consider new positions now at current levels.

- Suggested Positions -
DEC 10, 2012 - entry price on TCK @ 35.19, option @ 3.40
symbol: TCK1418a40 2014 JAN $40 call - current bid/ask $ 3.55/3.70

Current Target: $43.75
Current Stop loss: 31.75
Play Entered on: 12/10/12
Originally listed in the New Plays 12/08/12


Valero Energy - VLO - close: 33.37

Comments:
12/15/12: The rally continues in VLO with the stock up three out of the last four weeks. Traders bought the dip near $32.00 and its 10-dma on Thursday and VLO surged to a +2.3% gain on Friday. The next hurdle is potential resistance at its 2012 highs near $34.35.

Please note our new stop loss at $29.75.

- Suggested Positions -
NOV 23, 2012 - entry price on VLO @ 31.25, option @ 3.30*
symbol: VLO1418a35 2014 JAN $35 call - current bid/ask $ 4.00/ 4.10

12/15/12 new stop loss @ 29.75
11/23/12 trade opened on gap open higher at $31.25
*Entry price is an estimate since the option did not trade at the time our play opened.

Current Target: $39.75
Current Stop loss: 29.75
Play Entered on: 11/23/12
Originally listed on the Watch List: 11/10/12


CLOSED Plays


Family Dollar Stores - FDO - close: 65.86

Comments:
12/15/12: It turned out to be an ugly week for the discount one dollar type of stores. FDO's rival Dollar General (DG) reported earnings on Dec. 11th and issued bearish guidance citing lowering consumer confidence and tougher competition. This tanked the whole industry. Shares of FDO plunged from above $70 to $64. Our stop loss was hit at $66.45.

- Suggested Positions -
OCT 12, 2012 - entry price on FDO @ 65.88, option @ 1.70
symbol: FDO1320d75 2013 APR $75 call - exit $1.40* (-17.6%)

12/11/12 stopped out at $66.45
*option exit price is an estimate since the option did not trade at the time our play was closed.
12/02/12 new stop loss @ 66.45
11/24/12 new stop loss @ 64.75
10/20/12 adjust stop loss to $62.95

Chart of FDO:
%IMG2%

Current Target: $74.50
Current Stop loss: 66.45
Play Entered on: 10/12/12
Originally listed on the Watch List: 10/06/12