Editor's Note:
The market experienced widespread declines on Friday but traders were still buying the dip. Financials remain underperformers while airlines held up pretty well. It will be interesting to see how retailers perform this week following any news on Black Friday's results.

-James

Current Portfolio:


BULLISH Play Updates

Alcoa Inc - AA - close: 13.17 change: -0.14

Stop Loss: 12.45
Target(s): 14.95, 15.95
Current Option Gain/Loss: - 0.8%
Time Frame: 6 to 8 weeks
New Positions: Yes, but see below

Comments:
11/27 update: Dollar strength and commodity weakness on Friday could have had a bigger impact on AA but shares only lost -1%. The stock continues to slip sideways and bounced from its rising 40-dma again. While I would still consider new positions here I'm starting to think we should wait for a move (or a close above) the $13.40 level before launching positions.

Current Position: Long AA stock @ 13.18

chart:

Entry on November 16 at $13.18
Earnings Date 01/10/11 (unconfirmed)
Average Daily Volume: 26.1 million
Listed on November 6th, 2010


Alaska Air Group - ALK - close: 55.92 change: -0.08

Stop Loss: 59.50
Target(s): 51.90
Current Option Gain/Loss: + 1.8%
Time Frame: 8 to 9 weeks
New Positions: Yes, see below

Comments:
11/27 update: The airlines and ALK were fairly resilient on Friday. The XAL index only lost -0.5% and ALK fell less than 10 cents. Shares of ALK still look poised to breakout over resistance near $56.00. I remain bullish on this stock. Depending on your style of trading you could wait for a dip back toward the $55-54 zone as your next entry point or wait for a breakout to new highs (over 56.50). Our first target is $59.50. FYI: The Point & Figure chart is bullish with a $79 target.

Current Position: Long ALK stock @ $54.91

- or -

Long the 2011 January $60 calls (symbol: ALK1122A60) entry @ $1.60

chart:

Entry on November 22 at $54.91
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume: 331 thousand
Listed on November 20th, 2010


Abercrombie & Fitch - ANF - close: 48.46 change: +0.27

Stop Loss: 43.95
Target(s): 49.95
Current Option Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Comments:
11/27 update: Shares of ANF reversed Wednesday's loss but after Wednesday's failed rally at $50.00 I would still expect a deeper pull back. There is a chance that retail stocks surge this week following what appears to be very strong Black Friday traffic and sales. We still want to wait for a dip. I'm suggesting readers look for a pull back into the $46.10-45.00 zone.

Trigger to buy ANF @ $46.10

Suggested Position: Buy ANF stock @ $46.10
- or -
Buy the 2011 January $50 call (symbol: ANF1122A50)

chart:

Entry on November xx at $xx.xx
Earnings Date 02/15/11 (unconfirmed)
Average Daily Volume: 3.1 million
Listed on November 17th, 2010


Citigroup Inc - C - close 4.11 change -0.06

Stop Loss: 4.08
Target(s): 4.60, 4.75, 4.95
Current Option Gain/Loss: - 1.2%
Time Frame: 4 to 6 weeks
New Positions: No

Comments:
11/27 update: Investors remain wary of the financial stocks thanks to the turmoil in Europe over potential debt defaults by Ireland and now Portugal. Events overseas has put selling pressure on the banking sector. Citigroup is flirting with a breakdown under $4.10 and its bullish trend of higher lows. If there is any follow through on Monday we will likely get stopped out at $4.08. I am not suggesting new positions at this time.

Current Position: Long C stock, entry was at $4.16
Options Traders: Long December $4.00 CALL

chart:

Entry on October 27, 2010
Earnings Date 01/19/11 (unconfirmed)
Average Daily Volume: 523 million
Listed on October 25, 2010


Companhia Brasileira de Distribuicao - CBD - close: 41.01 change: +0.03

Stop Loss: 36.75
Target(s): 44.95, 49.00
Current Option Gain/Loss: + 1.8%
Time Frame: 10 to 12 weeks
New Positions: Yes, see below

Comments:
11/27 update: I don't see any changes from my previous comments on CBD. Traders bought the dip on Friday but I would not be surprised to see CBD retest its trend of higher lows. Wait for a dip into the $40.00-39.00 area before launching new bullish positions. More conservative traders may want to consider a stop loss closer to $38.00. We have a wide stop because CBD can be so volatile. Bear in mind this is a higher-risk trade.

Current Position: Long CBD stock @ $40.25

chart:

Entry on November 23 at $40.25
Earnings Date 03/02/11 (unconfirmed)
Average Daily Volume: 608 thousand
Listed on November 20th, 2010


Hansen Natural Corp. - HANS - close: 54.02 change: +1.55

Stop Loss: 48.95
Target(s): 54.90, 57.45
Current Option Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
11/27 update: Just to spite me shares of HANS continue to run away from us. The stock hit new highs on Friday at $54.75. I don't want to chase it. Currently the plan is to buy HANS or calls on a dip at $52.00.

Trigger @ 52.00

Suggested Position: BUY the stock

- or -

BUY the January $55.00 calls (symbol:HANS1122A55)

chart:

Entry on November xx
Earnings Date 11/04/10 (confirmed)
Average Daily Volume: 750 thousand
Listed on October 16, 2010


Kroger Co. - KR - close 23.07 change +0.05

Stop Loss: 21.95
Target(s): 23.70, 24.75
Current Option Gain/Loss: + 2.3%
Time Frame: 8 to 10 weeks
New Positions: No

Comments:
11/27 update: This could be an exciting week for KR. The company is due to report earnings on Thursday, December 2nd before the opening bell. Holding over earnings is a high-risk endeavor. More conservative traders will want to exit the day before. I hesitate to launch new positions ahead of the earnings report but aggressive traders may want to buy dips in the $22.75-22.50 zone.

Current Position: Long KR stock @ 22.55

chart:

Entry on November 9th @ 22.55
Earnings Date 12/2/2010 (confirmed)
Average Daily Volume: 6 million
Listed on November 3, 2010


Lam Research - LRCX - close: 46.61 change: -0.59

Stop Loss: 42.75
Target(s): 48.50, 52.50
Current Option Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Comments:
11/27 update: Semiconductor stocks have been showing strength recently but the sector hit a little bit of profit taking on Friday. We'd like to see more profit taking in this group so we can buy a dip. Right now the plan is to launch positions in LRCX at $45.25. More conservative traders could wait for a pull back closer to $44.00 instead.

Trigger @ $45.25

Suggested Position: Buy LRCX stock @ 45.25
- or -
Suggested Position: Buy the 2011 January $45 calls (LRCX1122A45)

chart:

Entry on November xx at $xx.xx
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume: 4.5 million
Listed on November 18th, 2010


Microsoft Corp. - MSFT - close: 25.25 change: -0.12

Stop Loss: 24.90
Target(s): 27.45, 29.00
Current Option Gain/Loss: - 0.7%
Time Frame: 8 to 10 weeks
New Positions: Yes

Comments:
11/27 update: MSFT lost 12 cents on Friday but the action intraday looks bullish. Traders bought the dip at $25.17 and MSFT was rising into the closing bell. This is a little bit more encouraging to see but I will repeat my earlier comments. This pull back into the $25.00-25.50 zone looks like an entry point but the short-term trend is down! If you don't want to buy this dip toward $25.00 more conservative traders could wait for a close over $26.10 instead.
FYI: We may need to adjust our time frame and focus on three or four months for MSFT to pay off. If you're buying calls, keep that in mind.

Current Position: Long MSFT stock @ 25.55

- or -

Buy the 2011 January $25.00 calls (symbol: MSFT1122A25) Entry @ $1.39

chart:

Entry on November 17 at $25.55
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume: 68.4 million
Listed on November 15th, 2010


Onyx Pharmaceuticals - ONXX - close: 29.55 change: -0.27

Stop Loss: 26.45
Target(s): 32.00, 34.50
Current Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Comments:
11/27 update: I am about ready to give up on ONXX as a trading candidate. The stock has been stuck in a range for three weeks now. Currently the plan is to buy the stock on a dip at $28.60 but I'm more inclined to drop this stock as a potential trade to make room for something else. Alternatively we could just wait for a breakout past resistance near $30.50. We'll give ONXX a couple of more days and if we don't see some movement we'll drop it.

Trigger @ $28.60

Suggested Position: Buy ONXX stock @ 28.60

chart:

Entry on November xx at $xx.xx
Earnings Date 02/23/11 (unconfirmed)
Average Daily Volume: 1.1 million
Listed on November 13th, 2010


Overseas Shipholding Group - OSG - close: 35.51 change: -1.09

Stop Loss: 34.75
Target(s): 39.90, 42.00
Current Option Gain/Loss: - 2.7%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
11/27 update: Hmm.... OSG underperformed on Friday with a -2.9% drop. I could not find any specific news to account for this relative weakness, which is worrisome. Volume was exceptionally light though so it might just be an abnormality. With that in mind I would probably wait for OSG to rally back above $36.00 before launching new positions.

Previous Comments:
If OSG can breakout to new relative highs the stock could see a short squeeze. The most recent data listed short interest at 20% of the float. We should consider this trade higher risk. The Baltic Dry Goods index has been falling, which suggest shipping rates are sinking. OSG has managed to trend higher in spite of this decline in the $BDI. Investors should also be worried about the long-term trend of lower highs in OSG. Keep your position size small to limit risk.

Current Position: Long OSG stock @ $36.50

- or -

Long the 2011 January $40 calls (OSG1122A40) Entry @ $0.78

chart:

Entry on November 23 at $36.50
Earnings Date 03/01/11 (unconfirmed)
Average Daily Volume: 600 thousand
Listed on November 22nd, 2010


Sony Corp. - SNE - close: 34.58 change: -0.42

Stop Loss: 32.90
Target(s): 35.75, 39.00
Current Option Gain/Loss: unopened
Time Frame: 10 to 12 weeks
New Positions: Yes, see trigger

Comments:
11/27 update: SNE gapped down on Friday morning but bulls were ready to buy the dip. I suspect that the news flow next week regarding Black Friday sales and traffic, especially at electronics stores, could be bullish for SNE. More aggressive traders may want to go ahead and launch positions now. I'm suggesting we wait for a dip to $34.00 instead. If triggered our first target is $35.75 with a stop loss t $32.90.

Trigger @ $34.00

Suggested Position: Buy SNE stock
- or -
Buy the 2011 APRIL $35 calls (SNE1116D35) current ask $2.45

chart:

Entry on November xx at $xx.xx
Earnings Date 02/03/11 (unconfirmed)
Average Daily Volume: 888 thousand
Listed on November 23rd, 2010


Tractor Supply Co. - TSCO - close: 42.29 change: -0.10

Stop Loss: 39.45
Target(s): 44.95
Current Option Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Comments:
11/27 update: TSCO saw another quiet session on Friday with the stock drifting in a narrow range. I still don't want to chase it although more aggressive traders could certainly look a new positions here. Right now our plan is to launch positions on a dip at $40.75.

Buy-the-Dip Trigger @ $40.75

Suggested Position: Buy TSCO stock
- or -
Buy the 2011 January $45 calls (symbol:TSCO1122A45)

chart:

Entry on November xx at $xx.xx
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume: 751 thousand
Listed on November 11th, 2010


BEARISH Play Updates

Corporate Office Properties - OFC - close: 34.15 change: -0.14

Stop Loss: 36.15
Target(s): 32.25, 30.25
Current Change: - 2.6%
Time Frame: 6 to 8 weeks
New Positions: No

Comments:
11/27 update: I don't see any changes from my prior comments. OFC's trend is down but the stock is a little bit oversold. If the market sees any sort of strong rebound higher then OFC will likely follow. We can watch for resistance near $35.00 and at $36.00. I am lowering our stop loss to $36.15.

11/27/10 New stop @ 36.15

Current Position: Short OFC stock @ 35.07

chart:

Entry on November 10 at $35.07
Earnings Date 02/09/11 (unconfirmed)
Average Daily Volume: 1.0 million
Listed on November 9th, 2010