Editor's Note:
The U.S. market's oversold bounce today helped open three of our new trades. BRCD, NILE, and STMP are all open now.

-James

Current Portfolio:


BULLISH Play Updates

AutoNation Inc. - AN - close: 35.23 change: +1.17

Stop Loss: 32.45
Target(s): 39.50
Current Gain/Loss: + 2.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
11/28 update: The stock market's big surge this morning pushed AN to hit resistance near $36.00 this morning. The gains faded but AN settled with a +3.4% advance. More conservative traders might want to consider inching up their stop loss. If you are looking for an entry point I'd wait for a dip near $34.50.

Earlier Comments:
Our multi-week target is $39.50. More conservative traders may want to exit in the $37.75 region instead.

current Position: Long AN stock @ $34.45

- or -

Long Jan $35 call (AN1221A35) Entry $1.95

Entry on November 22 at $34.45
Earnings Date 02/02/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on November 21, 2011


Brocade Communications - BRCD - close: 5.29 change: +0.18

Stop Loss: 4.75
Target(s): 6.45
Current Gain/Loss: + 0.7%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
11/28 update: Thankfully we didn't have to wait very long for BRCD to hit our trigger. Shares gapped higher at $5.23 and quickly hit our trigger to open bullish positions at $5.25. I would still consider new positions now. If you're feeling cautious then wait for a bounce off the $5.00 level.

Earlier Comments:
Keep in mind that the simple 200-dma near $5.40 could still be technical resistance. I expect this trade to take many weeks to play out but we're aiming for $6.75. We'll make adjustments to our exit strategy as needed.

current Position: Long BRCD stock @ $5.25

- or -

Long 2012JAN $5.50 call (BRCD1221A5.5) Entry $0.37

Entry on November 28 at $5.25
Earnings Date 02/16/12 (unconfirmed)
Average Daily Volume = 8.6 million
Listed on November 26, 2011


Hi Tech Pharmacal Co. - HITK - close: 40.41 change: +2.41

Stop Loss: 36.75
Target(s): 44.00
Current Gain/Loss: + 6.7%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
11/28 update: The market's strength today helped fuel a +6.3% rally in HITK. The stock has broken out past the $40.00 level and closed at new highs. I wouldn't chase it here. We will raise our stop loss to $36.75.

Earlier Comments:
The stock could see a short squeeze. The most recent data listed short interest at 14% of the very small 9.9 million-share float. The $40.00 level might be resistance but if HITK does see a short squeeze I am expecting a much bigger move. FYI: The Point & Figure chart for HITK is bullish with a $58.00 target. NOTE: We do not want to hold over the December earnings report so we only have two or three weeks.

current Position: Long HITK stock @ $37.84

- or -

Long DEC $40 call (HITK1117L40) Entry $1.65

11/28/11 new stop loss @ 36.75

Entry on November 22 at $37.84
Earnings Date 12/08/11 (unconfirmed)
Average Daily Volume = 180 thousand
Listed on November 21, 2011


Kodiak Oil & Gas - KOG - close: 8.24 change: +0.50

Stop Loss: 7.49
Target(s): 9.75
Current Gain/Loss: + 9.7%
Time Frame: two to three months
New Positions: see below

Comments:
11/28 update: KOG outperformed the market today with a +6.4% gain. This also happens to be a bullish breakout from its recent pattern of lower highs and higher lows. I am raising our stop loss to $7.49.

I am not suggesting new positions at this time. More conservative traders may want to exit now to lock in a gain.

Earlier Comments:
Our multi-month target is $9.75. FYI: The Point & Figure chart for KOG is bullish with a $13.75 target. KOG is a potential takeover target.

current Position: Long the stock @ 7.51

- or -

Long 2012 MAR $7.50 call (KOG1217C7.5) Entry $1.25

11/28 new stop loss @ 7.49
11/23 new stop loss @ 7.38
11/15 gap down at 7.41 and hit 7.21 before bouncing.
11/14 new stop loss @ 7.20
11/14 KOG announces plans to sell an additional 37.5 million shares of new stock
11/08 trade opened at $7.51.

Entry on November 08 at $ 7.51
Earnings Date 03/05/12 (unconfirmed)
Average Daily Volume = 6.6 million
Listed on November 5, 2011


Blue Nile Inc. - NILE - close: 34.53 change: +1.02

Stop Loss: 31.70
Target(s): 39.75
Current Gain/Loss: - 0.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
11/28 update: All the positive headlines regarding weekend retail sales and the hype about Cyber Monday helped contribute to NILE's gap open higher at $34.67. That was above our trigger to open small positions at $34.60 so our trade was opened first thing this morning. NILE's rally ran out of steam at $35.46 and shares slowly faded lower to settle with a +3.0% gain. I would still consider new positions now. More conservative traders may want to adjust their stop loss higher.

Earlier Comments:
Readers should consider this an aggressive, higher-risk trade. If triggered our target is $39.75. More conservative traders may want to exit at the 50 or 100-dma instead.

(small positions)

current Position: Long NILE stock @ 34.67

- or -

Long 2012Jan $35 call (NILE1221A35) Entry $2.90

11/28/11 NILE gapped higher at $34.67, which was above our entry trigger at $34.60

Entry on November 28 at $34.60
Earnings Date 02/09/12 (unconfirmed)
Average Daily Volume = 491 thousand
Listed on November 22, 2011


Stamps.com - STMP - close: 26.89 change: +1.50

Stop Loss: 24.75
Target(s): 32.50
Current Gain/Loss: + 2.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
11/28 update: Our STMP trade is finally open. Shares gapped higher at $26.16 and rallied to their 30-dma near $27.50 before paring its gains. STMP still settled with a +5.9% gain, clearly outpacing the broader market. This is an aggressive trader but I would still consider new positions now or you could wait for a rally past $27.50. The $30.00 level is resistance but we're aiming for $32.50.

Earlier Comments:
NOTE: STMP could see a short squeeze if the market bounces. The most recent data listed short interest at more than 10% of the very small 12.3 million-share float.

current Position: Long STMP stock @ $26.16

- or -

Long Feb $30 call (STMP1218C30) Entry $2.00

11/28 trade opened. STMP gapped higher at $26.16
11/26 No change in our strategy. Trade not open yet. Readers may want to consider alternatives listed in tonight's update.
11/23 STMP gapped down again. Trade not open.
11/22 trade did not open. STMP opened lower by one cent.
11/21 trade not open. try again. Move stop loss to $24.75

Entry on November 28 at $26.16
Earnings Date 02/09/12 (unconfirmed)
Average Daily Volume = 646 thousand
Listed on November 19, 2011


BEARISH Play Updates

AFLAC Inc. - AFL - close: 40.74 change: +1.69

Stop Loss: 42.05
Target(s): 38.00
Current Gain/Loss: + 3.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
11/28 update: AFL was due for an oversold bounce. The market's huge move higher today probably boosted AFL's move (+4.3%). The stock gapped open higher and closed over resistance near $40.00 and its 50 and 100-dma. This is short-term bullish. More conservative traders may want to consider an early exit now. I am not suggesting new positions at this time.

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

(Small Positions)

current Position: Short AFL stock @ 42.12

- or -

Long DEC $40 PUT (AFL1117x40) Entry $1.52

11/26 new stop loss @ 42.05, new exit target at $38.00
More conservative traders may want to take profits now
11/23 new stop loss @ 43.55
11/21 new stop loss @ 44.05

Entry on November 18 at $42.12
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 4.3 million
Listed on November 17, 2011


Forest Labs Inc. - FRX - close: 29.15 change: +0.52

Stop Loss: 30.55
Target(s): 25.25
Current Gain/Loss: - 0.6%
Time Frame: 9 to 12 weeks
New Positions: see below

Comments:
11/28 update: FRX was also due for an oversold bounce. The stock gapped higher but failed to breakout past the first level of technical resistance at the 10-dma. Shares only gained +1.8%. If we see FRX roll over in the $29.50-30.00 zone then readers can use it as a new entry point for bearish positions.

Earlier Comments:
Our multi-week target is $25.25. FRX doesn't move very fast so we have to give it some time. FYI: The Point & Figure chart for FRX is bearish with a $19 target.

NOTE: You may want to trade the options instead of the stock to limit risk. FRX has about 6 or 7 days worth of short interest (approximately 9% of the float). Looking at the chart you can see the super sharp bounces caused by short covering.

current Position: short FRX stock @ 28.95

- or -

Long FEB $30 put (FRX1218N30) Entry $2.25

Entry on November 21 at $28.95
Earnings Date 01/17/12 (unconfirmed)
Average Daily Volume = 2.5 million
Listed on November 19, 2011


Nexen Inc. - NXY - close: 14.77 change: +0.44

Stop Loss: 16.05
Target(s): 10.25
Current Gain/Loss: + 0.6%
Time Frame: 6 to 9 weeks or more
New Positions: see below

Comments:
11/28 update: NXY gapped open higher at $14.87 but the rebound ran out of steam near the $15.00 level. Shares saw their gains fade to +3.0% at the closing bell. I would still consider new positions here or you could look for a failed rally near its 10-dma or the $15.50 level.

Earlier Comments:
The 2008 lows near $11.50 could be support but we will tentatively put our multi-week (month?) exit target at $10.25.

Suggested Position: short NXY stock @ $14.87

- or -

Long JAN $14 PUT (NXY1221M14) Entry $0.85

- or -

Long MAR $12 PUT (NXY1217o12) Entry $0.80

11/28/11 NXY gapped open higher at $14.87

Entry on November 28 at $14.87
Earnings Date --/--/-- (unconfirmed)
Average Daily Volume = 3.0 million
Listed on November 26, 2011


AT&T Inc. - T - close: 27.95 change: +0.54

Stop Loss: 28.55
Target(s): 24.25 or 22.75
Current Gain/Loss: unopened
Time Frame: 6 to 9 weeks or more
New Positions: Yes, see below

Comments:
11/28 update: Hmm... investors don't see too worried yet about a potential breakout over AT&T's attempted merger with T-Mobile. The stock gapped open higher this morning. If the merger fails then AT&T has to pay T-Mobile's parent company, Deutsche Telekom, a $4 billion breakup fee.

I don't see many changes from my earlier comments although nimble traders might want to consider bearish positions on a failed rally near $28.50ish.

Earlier Comments:
AT&T has significant support in the $27.20-27.50 zone. Currently we are suggesting a trigger to open bearish positions at $27.15. More conservative traders may want to use a trigger under $27.00 instead as their entry point for bearish positions. If we are triggered at $27.15 our multi-month target is $22.75, however, more conservative traders may want to exit near $24.00 instead. I have listed to targets (24.25 and 22.75) above depending on your risk tolerance. The $24.00 level was significant support back in 2010. Unfortunately for AT&T shareholders the stock has produced a huge (bearish) head-and-shoulders pattern over the last several months. A breakdown under $27.00 would signal a drop toward the $22.50 area (see weekly chart).

Trigger @ $27.15

Suggested Position: short T stock @ 27.15

- or -

buy the 2012Jan $25 PUT (T1221M25)

- or -

buy the Mar $25 PUT (T1217O25)

Entry on November xx at $ xx.xx
Earnings Date 01/26/12 (unconfirmed)
Average Daily Volume = 23.4 million
Listed on November 26, 2011