Editor's Note:
We had a couple of candidates hit new all-time highs today (HITK & KOG). Overall the market's action was a bit disappointing following yesterday's big bounce.

-James

Current Portfolio:


BULLISH Play Updates

AutoNation Inc. - AN - close: 35.30 change: +0.07

Stop Loss: 32.45
Target(s): 39.50
Current Gain/Loss: + 2.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
11/29 update: Trading in AN today was disappointing. The stock attempted to rally but failed at its 50-dma. I am starting to suspect that we'll see AN retest the $34.00 area soon. Readers will want to wait for the dip or a bounce near $34.00 as our next entry point.

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


Activision Blizzard, Inc. - ATVI - close: 12.09 change: -0.05

Stop Loss: 11.59
Target(s): 13.45
Current Gain/Loss: unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
11/29 update: Our trade on ATVI is not open yet. The stock gapped open lower at $12.09 and dipped toward its exponential 200-dma before bouncing back. I don't see any changes from my prior comments.

I am suggesting small bullish positions tomorrow morning but only if both ATVI and the S&P 500 open positive. If the S&P 500 opens flat then we'll base our entry on the move in ATVI alone. I am suggesting a stop loss at $11.59. We will set our target for $13.45.

FYI: More conservative traders may want to wait for a rally past $12.25 as their entry point instead.

*See Entry Details Above*

Suggested Position: buy ATVI stock @ the open tomorrow

- or -

buy the FEB $13 call (ATVI1218B13)

11/29/11 ATVI gapped open lower. Trade not open yet.

Entry on November xx at $ xx.xx
Earnings Date 02/09/12 (unconfirmed)
Average Daily Volume = 14.9 million
Listed on November 28, 2011


Brocade Communications - BRCD - close: 5.24 change: -0.05

Stop Loss: 4.75
Target(s): 6.45
Current Gain/Loss: - 0.1%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
11/29 update: Tuesday proved to be a quiet day for BRCD. The stock churned sideways in the $5.20-5.30 zone for most of the session. I would still consider new positions now if the S&P 500 opens positive tomorrow. Otherwise readers may want to wait for a new dip or bounce from the $5.00 mark.

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: 41.72 change: +1.31

Stop Loss: 37.65
Target(s): 44.00
Current Gain/Loss: +10.2%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
11/29 update: HITK continues to outperform. The stock added another +3.2% and closed at new highs again. Shares are starting to look overbought here. More conservative traders may want to exit early now. The stock is up +10% while the Dec. $40 call is up +66%. We are raising our stop loss to $37.65.

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

11/29/11 new stop loss @ 37.65
Readers may want to take profits early right now.
HITK +10.2%, Dec $40 call +66%
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: 8.54 change: +0.30

Stop Loss: 7.49
Target(s): 9.75
Current Gain/Loss: +13.7%
Time Frame: two to three months
New Positions: see below

Comments:
11/29 update: Oil and energy stocks were some of the market's best performers on Tuesday. Shares of KOG rallied again and hit new all-time highs at $8.69 intraday. The stock settled with a +3.6% gain. I would not chase it here. More conservative traders might want to consider taking profits early. (KOG +13.7%, Mar $7.50 call +44%)

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: 34.46 change: -0.07

Stop Loss: 31.70
Target(s): 39.75
Current Gain/Loss: - 0.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
11/29 update: I am a little surprised that NILE held up as well as it did today. Tiffany & Co. (TIF) reported earnings that were better than expected but TIF guided lower for the fourth quarter. Suddenly the high-end consumer doesn't seem so bulletproof to this economy. While NILE has a different business model that TIF they are both selling jewelry.

Shares of NILE did see a little volatility this morning but the stock bounced near its 10-dma. Readers may want to wait for a new rally past $35.00 before considering new positions.

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: 26.50 change: -0.39

Stop Loss: 24.75
Target(s): 32.50
Current Gain/Loss: + 1.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
11/29 update: Hmm... trading in STMP was a bit disappointing today. The stock traded down to $25.75 before paring its losses and closing with a -1.4% loss. The larger trend is still up but readers may want to wait for a move past $27.50 before considering new bullish positions.

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: 40.88 change: +0.14

Stop Loss: 42.05
Target(s): 38.00
Current Gain/Loss: + 2.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
11/29 update: The oversold bounce in AFL continues. Shares didn't make that much progress. If the stock fails at its 10-dma then nimble traders might want to consider new bearish positions (with a tight stop).

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: 29.02 change: -0.13

Stop Loss: 30.10
Target(s): 25.25
Current Gain/Loss: - 0.2%
Time Frame: 9 to 12 weeks
New Positions: see below

Comments:
11/29 update: FRX failed to see any progress on yesterday's bounce. You could argue that today's session looks like a failed rally at its simple 10-dma. Please note that I am lowering our stop loss down to $30.10.

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

11/29/11 new stop loss @ 30.10

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: 15.46 change: +0.69

Stop Loss: 16.05
Target(s): 10.25
Current Gain/Loss: - 3.9%
Time Frame: 6 to 9 weeks or more
New Positions: see below

Comments:
11/29 update: NXY outperformed today after the company offered its 2012 production guidance and said it would sell a 40% stake in its British Columbia assets for $700 million. We still expect the company to suffer due to its failed negotiations with the Yemeni government but the rest of the company appears to be doing fine.

I would wait for this bounce to fail (rollover) under the $16.00 level before considering new bearish positions.

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: 28.06 change: +0.11

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:
11/29 update: AT&T extended its oversold bounce but it seemed to lose steam when it hit short-term technical resistance at its 10-dma. More aggressive traders might want to consider bearish positions now. Our plan calls for a trigger at $27.15 to open positions.

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