Editor's Note:
The major indices closed near their highs for the week. Many of our bullish candidates outperformed the market on Friday. ADBE, ADSK, LOW, NPO, and XLF all displayed relative strength.

We decided to go ahead and remove RAX as a candidate with the trade unopened.

-James

Current Portfolio:


BULLISH Play Updates

Adobe Systems - ADBE - close: 27.30 change: +1.22

Stop Loss: 25.45
Target(s): 29.50
Current Gain/Loss: +0.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/22 update: After a volatile week ADBE ended on a high note. The odd thing is that I couldn't find any news or catalyst to explain the +4.6% rally on Friday. Shares sprinted toward technical resistance at its simple 100-dma. I am not suggesting new positions at this time.

Current Position: Long ADBE @ 27.13

- or -

Long NOV $27 call (ADBE1119K27) Entry $1.27

10/20 new stop loss @ 25.45
10/18 new stop loss @ 25.35, today's bounce looks like an entry
10/14 ADBE gapped higher at $27.13

chart:

Entry on October 14 at $27.13
Earnings Date 12/15/11 (unconfirmed)
Average Daily Volume = 7.1 million
Listed on October 11, 2011


Autodesk, Inc. - ADSK - close: 31.27 change: +0.31

Stop Loss: 29.75
Target(s): 34.00
Current Gain/Loss: +4.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/22 update: ADSK also rallied on Friday and shares also stalled at technical resistance at the 100-dma. It looks like a bull-flag breakout pattern but I am not convinced that ADSK will not see another dip toward $30 again.

The plan was to keep our position size small since ADSK is short-term overbought here.

*Small Positions*

current Position: Long ADSK stock @ 30.35

- or -

Long NOV $32 call (ADSK1119K32) Entry $1.60

10/20 ADSK provided another entry point on the dip to $30.00
10/15 new stop loss @ 29.75, adjusted target to $34.00

chart:

Entry on October 12 at $30.35
Earnings Date 11/17/11 (unconfirmed)
Average Daily Volume = 4.5 million
Listed on October 11, 2011


Bristol-Myers Squibb - BMY - close: 32.56 change: +0.12

Stop Loss: 31.75
Target(s): 33.50
Current Gain/Loss: +4.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/22 update: BMY spent the week coiling tightly in a narrow range. The larger trend is still higher but I am not suggesting new positions. BMY is due to report earnings on October 27th. We will plan on exiting this trade on Oct. 26th at the closing bell to avoid holding over the earnings announcement. That's assuming shares do not hit our exit target at $33.50 first. Our stop loss remains at $31.75.

current Position: Long BMY stock @ $31.15

- or -

Long 2012 Jan. $30 call (BMY1221A30) Entry $2.26

10/22 plan on exiting October 26th if not sooner
10/17 sold half 2012 Jan. $30 call open (bid) @ 2.90 (+28.3%)
10/15 new stop loss @ 31.75
10/15 Plan to take profits on the call, sell half on Monday
10/10 new stop loss @ 30.95
10/04 new stop loss @ 30.75
09/27 new stop loss @ 29.90
09/26 trade opened

chart:

Entry on September 26 at $31.15
Earnings Date 10/27/11 (confirmed)
Average Daily Volume = 13.6 million
Listed on September 22, 2011


Lowe's Companies - LOW - close: 21.52 change: +0.48

Stop Loss: 20.90
Target(s): 22.85
Current Gain/Loss: + 6.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
10/22 update: LOW displayed relative strength on Friday with a +2.8% gain and a breakout past resistance near $21.50 and the $22 level. The next challenge for the bulls will be to push past potential technical resistance at the exponential 200-dma near $22.25.

More conservative traders may want to take profits now, especially if you're holding the call options. I am not suggesting new positoins at this time. Please note our new stop loss at $20.90. Our final target remains $22.85. You might want to consider aiming for the simple 200-dma instead.

Earlier Comments:
I would keep our position size small.

current Position: Long LOW stock @ 20.75

- or -

Long NOV $21 call (LOW1119K21) Entry $0.85

10/22 new stop loss @ 20.90
10/22 Cautious traders may want to take profits now
LOW +6.6%, Nov. $21 call +81%

chart:

Entry on October 10 at $20.75
Earnings Date 11/14/11 (confirmed)
Average Daily Volume = 16.7 million
Listed on October 08, 2011


EnPro Industries - NPO - close: 32.39 change: +1.06

Stop Loss: 30.40
Target(s): 33.45
Current Gain/Loss: + 4.9%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
10/22 update: NPO was showing some relative strength on Friday. Shares gapped open higher and closed with a +3.3% gain. The stock also closed near its high for the week and this appears to be a breakout from the recent trading range.

The simple 50-dma could be technical resistance and this moving average has fallen to $33.82. We will lower our exit target to $33.45. I am also raising our stop loss to $30.40. I am not suggesting new positions on NPO at this time.

Earlier Comments:
We want to keep our position small to limit risk.

(Small Positions)

current Position: Long NPO stock @ $30.87

10/22 new stop loss @ 30.40
10/22 adjusted target to $33.45
10/19 exit Oct. $30 calls, bid @ $1.25 (-28.5%)
10/18 plan to exit Oct. calls tomorrow at the close
10/17 October options are running out of time. Consider an early exit
10/15 adjusted target for stock to $34.00
10/15 adjusted target for option to $33.00
10/10 new stop loss at $29.80

chart:

Entry on October 07 at $30.87
Earnings Date 11/03/11 (unconfirmed)
Average Daily Volume = 282 thousand
Listed on October 06, 2011


VeriFone Systems - PAY - close: 38.67 change: +0.27

Stop Loss: 37.95
Target(s): 44.85
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
10/22 update: Unfortunately there is still no change from my prior comments on PAY. The stock underperformed on Friday and remains inside the $37.50-40.00 trading range. If we don't see improvement soon we'll drop PAY as a candidate.

Our plan is to open bullish positions at $40.50.

Earlier Comments:
We will aim for $44.85 as our exit target. More conservative traders may want to exit near the 200-dma. FYI: The Point & Figure chart for PAY is bullish with a $59 target.

Trigger @ 40.50

Suggested Position: buy PAY stock @ $40.50

- or -

buy the NOV $42 call (PAY1119K42)

chart:

Entry on October xx at $ xx.xx
Earnings Date 12/01/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on October 13, 2011


Financial Sector ETF - XLF - close: 13.13 change: +0.33

Stop Loss: 11.95
Target(s): 14.45
Current Gain/Loss: +3.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/22 update: A lot of Friday's early action looked like a short squeeze. The XLF gapped open higher and managed to breakout past resistance at the $13.00 level. Even though I doubt the strength of the move on Friday I do see the breakout past $13.00 as a new entry point although if you open positions now you may want to raise your stop loss.

Remember, this sector is currently hostage to the news out of Europe. Trade carefully.

Earlier Comments:
Investors need to be aware that the XLF could see a HUGE move next week as the market reacts to news from the EU summit. That huge move could be up or down. If you are the hedging type then consider buying a put to protect yourself here.

Currently we have a stop loss at $11.95 and our target is $14.45.

current Position: Long XLF @ $12.71

- or -

Long NOV $13 call (XLF1119K13) $0.42

11/20 trade opened. XLF at $12.71
11/19 try again. New stop loss @ 11.95

chart:

Entry on October 20 at $12.71
Earnings Date --/--/--
Average Daily Volume = 125 million
Listed on October 18, 2011


BEARISH Play Updates

None. We do not have any active bearish trades.


CLOSED BULLISH PLAYS

Rackspace Hosting - RAX - close: 38.54 change: +0.08

Stop Loss: 37.25
Target(s): 43.25
Current Gain/Loss: unopened
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
10/22 update: Hmm.... RAX underperformed the market on Friday. The early morning strength faded and shares closed up +0.2% versus the S&P 500's +1.4%. We are removing RAX from the newsletter tonight with our trade unopened. I would keep this stock on your watch list as I suspect it could be a mover over the next several weeks. Be aware that RAX is due to report earnings in early November.

Our trade never opened.

10/22/11 RAX removed as a trade candidate.
10/20/11 Not ready to pull the trigger. Wait for one more day
10/19/11 Temporarily remove entry point plans, no trade
10/19/11 trade not opened.

chart:

Entry on October xx at $ xx.xx
Earnings Date 11/07/11 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on October 18, 2011