Editor's Note:
Coal stocks continued to rally on Friday and BTU hit our exit target. Meanwhile we had plans to exit our MS positions and the UWM and XLF calls at the open on Friday morning. I am also suggesting an early exit for LOW.

I am concerned that the stock market's major indices are very short-term overbought and due for a correction. If you have a profit consider taking some money off the table.

-James

Current Portfolio:


BULLISH Play Updates

Adobe Systems - ADBE - close: 29.02 change: +0.68

Stop Loss: 27.15
Target(s): 29.50
Current Gain/Loss: +6.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/29 update: ADBE outperformed the market on Friday with a +2.3% gain. Traders bought the dip near $28 on Friday morning and the stock rallied past technical resistance at the exponential 200-dma.

Readers may want to seriously consider taking profits right here and now. The call option is up +75%. Our final target is still at $29.50. Please note that we are raising our stop loss up to $27.15. I am not suggesting new positions at this time.

Current Position: Long ADBE @ 27.13

- or -

Long NOV $27 call (ADBE1119K27) Entry $1.27

10/29 new stop loss @ 27.15
10/29 readers may want to take profits now (+6.9% & +75% option)
10/27 new stop loss @ 26.75
10/26 new stop loss @ 25.95
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


VeriFone Systems - PAY - close: 43.00 change: +1.57

Stop Loss: 39.95
Target(s): 44.85
Current Gain/Loss: +5.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/29 update: Friday proved to be a strong session for PAY. The stock outperformed with a +3.7% gain and a rallied to the $43.00 level. More conservative traders may want to exit early now, especially if you are holding the November $42 calls, which have more than doubled for us (+114%).

I am not suggesting new positions at this time. We will raise our stop loss to $39.95. Currently our exit target is $44.85 but readers might want to exit at the simple 200-dma instead (currently 43.63).

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.

current Position: Long PAY stock @ $40.65

- or -

Long NOV $42 call (PAY1119K42) Entry $1.05

10/29 new stop loss @ 39.95
Readers may want to go ahead and take profits now, especially with the Nov $42 calls (+114%)
10/27 new stop loss @ 38.40
10/27 Trade opened. PAY gapped higher at $40.65

chart:

Entry on October 27 at $40.65
Earnings Date 12/01/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on October 13, 2011


Red Hat, Inc. - RHT - close: 51.86 change: +0.75

Stop Loss: 47.80
Target(s): 54.75
Current Gain/Loss: +5.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/29 update: RHT continues to rally. Traders bought the gap down on Friday morning and the dip near $50. Shares rallied to a new high near $52. Please note that we are raising our stop loss to $47.80. Broken resistance near $48.00 should offer some support.

If you are holding the calls you may want to take profits now. The bid has risen to $2.85 (+137%).

current Position: Long RHT stock @ 49.05

- or -

Long NOV $50 call (RHT1119K50) Entry $1.20

10/29 new stop loss @ 47.80
readers may want to take profits on the calls now, which are already up +137%
10/27 trade opened at trigger $49.05

chart:

Entry on October 27 at $49.05
Earnings Date 12/21/11 (unconfirmed)
Average Daily Volume = 2.8 million
Listed on October 26, 2011


Ultra (long) Russell 2000 ETF - UWM - close: 37.57 chg: -0.25

Stop Loss: 35.75
Target(s): 39.00
Current Gain/Loss: +12.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/29 update: The small cap ETFs held up reasonably well on Friday. The UWM traded in a narrow range, which is unusual for this double long ETF. Our plan was to exit our Nov. $35 calls at the open on Friday morning.

Readers may want to exit early now to lock in a gain. I am concerned that the stock market's major indices are overbought and due for a pull back. I am not suggesting new positions at this time.

(Small Positions)

Suggested Position: Long UWM stock @ 33.25

- or -

NOV $35 call (UWM1119K35) Entry $1.70, exit $3.25 (+91.1%)

10/28 exited Nov. $35 calls @ $3.25 (+91.1%)
10/27 prepare to exit Nov. $35 calls at the open tomorrow
10/27 new stop loss @ 35.75
10/24 triggered @ 33.25

chart:

Entry on October 24 at $33.25
Earnings Date --/--/--
Average Daily Volume = 3.9 million
Listed on October 22, 2011


Financial Sector ETF - XLF - close: 14.05 change: +0.01

Stop Loss: 13.25
Target(s): 14.45
Current Gain/Loss: +10.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/29 update: XLF spent Friday churning sideways in a narrow range and closed virtually unchanged on the session. Readers may want to seriously consider an early exit now to lock in a gain. It was our plan to exit our November $13 calls at the open on Friday morning.

I am not suggesting new positions at this time.

current Position: Long XLF @ $12.71

- or -

NOV $13 call (XLF1119K13) $0.42, exit $1.00 (+138.0%)

10/28 exited Nov. $13 calls @ $1.00 (+138.0%)
10/27 plan to exit Nov. $13 calls at the open tomorrow
10/27 new stop loss @ 13.25
10/20 trade opened. XLF at $12.71
10/19 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

Ancestry.com Inc. - ACOM - close: 22.67 change: +0.83

Stop Loss: 24.35
Target(s): 18.75
Current Gain/Loss: -3.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
10/29 update: Hmm... suddenly that idea for a trigger under $21.50 seems like a good idea. Our plan was to open bearish positions on Friday morning. ACOM opened at $21.80 and rallied to $23.11 intraday before settling with a +3.8% gain. I suspect this outperformance is short covering with the stock at support.

At this point I would probably wait for a drop under $21.50 before initiating new positions. This was an idea I suggested as an alternative on Thursday night.

Earlier Comments:
FYI: You might want to trade the put options instead of shorting the stock. The most recent data listed short interest at 20% of the small 31.5 million share float. That raises the risk of a short squeeze.

current Position: short ACOM stock @ $21.80

- or -

Long NOV $22.50 PUT (ACOM1119W22.5) Entry $1.41

chart:

Entry on October 28 at $21.80
Earnings Date 10/26/11 (confirmed)
Average Daily Volume = 840 thousand
Listed on October 27, 2011


Dish Network - DISH - close: 24.44 change: -1.00

Stop Loss: 27.15
Target(s): 21.25
Current Gain/Loss: +3.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
10/29 update: DISH continues to underperform the market. Shares opened at $25.38 and then fell toward the $24.00 level intraday. The stock closed Friday down -3.9%. I would still consider new positions now or you could wait for a bounce or failed rally in the $25.00-25.50 zone.

Earlier Comments:
FYI: The Point & Figure chart for DISH is bearish with a $16 target.

current Position: short DISH stock @ $25.38

- or -

Long NOV $25 PUT (DISH1119W25) Entry $1.20

chart:

Entry on October 28 at $25.38
Earnings Date 11/07/11 (confirmed)
Average Daily Volume = 3.0 million
Listed on October 27, 2011


CLOSED BULLISH PLAYS

Peabody Energy - BTU - close: 46.84 change: +0.99

Stop Loss: 41.75
Target(s): 47.00
Current Gain/Loss: +6.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
10/29 update: Target achieved. BTU rallied to $47.81 intraday on Friday. Our exit target was hit at $47.00. BTU is now short-term overbought. I would keep it on your watch list for a dip back toward its 50-dma. The stock could have resistance at the 100-dma and the $50 level.

closed Position: Long BTU stock @ $43.95, exit 47.00 (+6.9%)

- or -

NOV $45 call (BTU1119K45) Entry $1.28, exit $3.05 (+138.2%)

10/28 exit target hit at $47.00
10/27 new stop loss @ 41.75
10/27 BTU gaps higher at $43.95 (up from 41.60).

chart:

Entry on October 27 at $43.95
Earnings Date 01/24/12 (unconfirmed)
Average Daily Volume = 6.6 million
Listed on October 26, 2011


Lowe's Companies - LOW - close: 21.37 change: -0.53

Stop Loss: 21.20
Target(s): 22.40
Current Gain/Loss: + 2.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
10/29 update: LOW underperformed the market on Friday with a -2.4% decline. I couldn't find any specific news behind this relative weakness. Shares closed under their 10-dma. The low on Friday was $21.26. I am suggesting we go ahead and exit early to avoid or minimize any losses.

Earlier Comments:
I would keep our position size small.

closed Position: Long LOW stock @ 20.75, exit $21.37 (+2.9%)

- or -

NOV $21 call (LOW1119K21) Entry $0.85, exit $0.87 (+ 2.3%)

10/29 exit early
10/27 new stop loss @ 21.20, adjusted target to $22.40
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


Morgan Stanley - MS - close: 19.31 change: -0.10

Stop Loss: 17.90
Target(s): 19.75
Current Gain/Loss: + 9.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
10/29 update: Wow! I am impressed. After a +17% gain on Thursday, shares of MS only lost 10 cents on Friday. It was our plan to exit positions at the open on Friday morning. MS opened at $18.98.

Readers may want to keep MS on their watch list for a dip back toward the $17.00 area as a potential entry point.

(Small Positions)

closed Position: Long MS stock @ $17.30, exit $18.98 (+ 9.7%)

- or -

NOV $18 call (MS1119K18) Entry $0.72, exit $1.66 (+130.5%)

10/28 exit at the open on Friday
10/27 Prepare to exit immediately at the open tomorrow.
10/27 new stop loss @ 17.90

chart:

Entry on October 24 at $17.30
Earnings Date 10/19/11
Average Daily Volume = 42.8 million
Listed on October 22, 2011