Editor's Note:
Stocks rally for their third day in a row this week. It was not a good day for our bearish plays. CNC, INT, and VECO were stopped out. We closed SYNA as planned. I have removed MDSO.

Current Portfolio:


BULLISH Play Updates

American Intl. Group - AIG - close: 36.86 change: +0.51

Stop Loss: 34.45
Target(s): 39.75
Current Gain/Loss: + 2.4%

Entry on October 9 at $36.00
Listed on October 8, 2012
Time Frame: exit prior to earnings on Nov. 1st
Average Daily Volume = 44 million
New Positions: see below

Comments:
10/17/12: It was a good day for AIG with shares rising +1.4% and setting a new 52-week closing high. Readers may want to start raising their stop loss closer to the $35.00 level.

Our target is $39.75 but we'll plan on exiting prior to the early November earnings report. FYI: The Point & Figure chart for AIG is bullish with a $42.50 target.

Current Position: Long AIG stock @ $36.00

- (or for more adventurous traders, try this option) -

Long Nov $37 call (AIG1211k37) entry $0.76

10/15/12 new stop loss @ 34.45



AOL Inc. - AOL - close: 37.07 change: -0.24

Stop Loss: 35.49
Target(s): 39.90
Current Gain/Loss: -0.4%

Entry on October 16 at $37.23
Listed on October 15, 2012
Time Frame: exit prior to the NOV 6th earnings report
Average Daily Volume = 1.6 million
New Positions: see below

Comments:
10/17/12: The trading action in AOL today is a bit ominous. Shares rallied toward $38.00 and reversed. I would expect AOL to dip toward $36.00 now. I'm not suggesting new positions at this time.

In other news AOL has moved its earnings date to November 6th.

Suggested Position: buy AOL stock @ $37.23

- (or for more adventurous traders, try this option) -

Long NOV $38 call (AOL1217k38) entry $1.10



Bio-Reference Labs - BRLI - close: 32.00 change: -0.09

Stop Loss: 30.95
Target(s): 34.75
Current Gain/Loss: + 5.8%

Entry on October 03 at $30.25
Listed on October 2, 2012
Time Frame: 4 to 6 weeks
Average Daily Volume = 232 thousand
New Positions: see below

Comments:
10/17/12: BRLI continues to churn sideways near the $32.00 level. I suspect the stock will remain stock to this level until after option expiration this Friday.

I am not suggesting new positions at this time. More conservative traders may want to take profits now.

current Position: Long BRLI stock @ $30.25

10/16/12 new stop loss @ 30.95
10/11/12 new stop loss @ 30.75
10/04/12 new stop loss @ 29.90
10/03/12 new stop loss @ 29.25
10/03/12 triggered @ 30.25



Colfax Corp. - CFX - close: 37.31 change: +0.20

Stop Loss: 35.90
Target(s): 39.90
Current Gain/Loss: + 0.8%

Entry on October 01 at $37.00
Listed on September 29, 2012
Time Frame: exit prior to the late October earnings report
Average Daily Volume = 753 thousand
New Positions: see below

Comments:
10/17/12: CFX continues to bounce. Shares are quickly approaching potential resistance at its early October highs (near $37.50). I am not suggesting new positions at this time.

The plan was to keep our position size small to limit our risk. FYI: The Point & Figure chart for CFX is bullish with a long-term $59 target.

*Small Positions*

Suggested Position: Long CFX stock @ $37.00

10/16/12 new stop loss @ 35.90
10/13/12 new stop loss @ 35.40
10/01/12 triggered @ 37.00



Plum Creek Timber - PCL - close: 44.15 change: +0.27

Stop Loss: 42.40
Target(s): 44.95
Current Gain/Loss: + 2.3%

Entry on October 15 at $43.15
Listed on October 13, 2012
Time Frame: exit prior to earnings on Oct. 29th (not yet confirmed)
Average Daily Volume = 1.1 million
New Positions: see below

Comments:
10/17/12: PCL continues to post gains and is now up four days in a row. Broken resistance near $43.00 should offer some new support. More conservative traders may want to start raising stops closer to $43.00.

current Position: Long PCL stock @ $43.15

10/16/12 new stop loss @ 42.40
10/15/12 triggered at $43.15



BEARISH Play Updates

Navistar Intl. - NAV - close: 21.16 change: +0.58

Stop Loss: 21.25
Target(s): 16.00
Current Gain/Loss: unopened

Entry on October xx at $ xx.xx
Listed on October 16, 2012
Time Frame: 3 to 6 weeks
Average Daily Volume = 1.6 million
New Positions: Yes, see below

Comments:
10/17/12: NAV bounced off a test of support near $20.00 this morning. The question now is will there be any follow through on the bounce. It looks like the bounces from support are losing power.

Earlier Comments:
The September low was near $19.80. I am suggesting a trigger to open bearish positions at $19.75. The 2008 lows were near $15.50 so we're going to target a drop to $16.00. FYI: There is already a growing amount of bearish pressure on the stock with the most recent data listing short interest at 15% of the 47.4 million share float.

Trigger @ 19.75

Suggested Position: short NAV stock @ (trigger)

- (or for more adventurous traders, try this option) -

buy the NOV $20 PUT (NAV1217w20)



Sohu.com - SOHU - close: 39.75 change: +0.47

Stop Loss: 41.40
Target(s): 36.00
Current Gain/Loss: - 0.5%

Entry on October 10 at $39.55
Listed on October 9, 2012
Time Frame: Exit prior to the late October earnings report
Average Daily Volume = 472 thousand
New Positions: see below

Comments:
10/17/12: As the market rebounds higher SOHU has bounced back to overhead resistance near $40 and its 10-dma. A failure here can be used as a new bearish entry point.

Keep in mind that we want to exit prior to the late October earnings report.

Earlier Comments:
I have to warn you that SOHU can be a volatile stock so we need to limit our position size to reduce our risk or consider trading the options. Our target is $36.00. More aggressive traders could aim for the $34.00 area.

*Small Positions*

current Position: short SOHU stock @ $39.55

- (or for more adventurous traders, try this option) -

Long Nov $37.50 PUT (SOHU1211w37.5) entry $1.85



Titanium Metals - TIE - close: 12.25 change: -0.09

Stop Loss: 12.65
Target(s): 11.00
Current Gain/Loss: + 1.3%

Entry on October 4 at $12.41
Listed on October 3, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.5 million
New Positions: see below

Comments:
10/17/12: TIE gapped open higher and then quickly reversed. More conservative traders might want to consider adjusting their stop loss lower. I am not suggesting new positions at this time.

*Small Positions*

current Position: short TIE stock @ $12.41

10/13/12 new stop loss @ 12.65



Trimble Navigation - TRMB - close: 47.99 change: -0.01

Stop Loss: 48.55
Target(s): 42.50
Current Gain/Loss: unopened

Entry on October xx at $ xx.xx
Listed on October 10, 2012
Time Frame: exit prior to earnings on Nov. 1st
Average Daily Volume = 697 thousand
New Positions: Yes, see below

Comments:
10/17/12: TRMB tried to rally but reversed at technical resistance near the 50-dma and 200-dma. Shares eventually closed flat on the session. More aggressive traders might want to consider bearish positions now with a stop above today's high. TRMB should see follow through lower tomorrow. If it does not then I'm likely to drop TRMB as a candidate. Officially our entry point is still at $46.50.

Earlier Comments:
I am suggesting small bearish positions if TRMB can trade at $46.50 or lower. If triggered our target is $42.50 but we want to exit prior to the next earnings report on November 1st.

Trigger @ 46.50 (Small Positions)

Suggested Position: short TRMB stock @ (trigger)

- (or for more adventurous traders, try this option) -

buy the Nov $45 PUT (TRMB1211w45)



CLOSED BULLISH PLAYS

Medidata Solutions - MDSO - close: 39.93 change: -0.18

Stop Loss: 39.40
Target(s): 43.00
Current Gain/Loss: unopened

Entry on October xx at $ xx.xx
Listed on October 13, 2012
Time Frame: exit prior to the late October earnings report
Average Daily Volume = 161 thousand
New Positions: see below

Comments:
10/17/12: MDSO has been pinned to the $40.00 level. The stock has not yet hit our trigger to open positions. I am removing it as a candidate.

Trigger @ 40.50

Our Trade Did Not Open.

10/17/12 removed from the newsletter

chart:



CLOSED BEARISH PLAYS

Centene Corp. - CNC - close: 38.81 change: +3.83

Stop Loss: 36.65
Target(s): 31.50
Current Gain/Loss: + 0.3%

Entry on September 20 at $36.75
Listed on September 19, 2012
Time Frame: exit prior to earnings on Oct. 23rd.
Average Daily Volume = 693 thousand
New Positions: see below

Comments:
10/17/12: Investors rejoiced with CNC announced it has started the termination process to cancel its health insurance contract to service Medicaid in the state of Kentucky. Unfortunately that was bad news if you were short the stock. The Kentucky Medicaid contract was a money loser for CNC so traders saw the headline as good news. The stock soared more than +10% intraday. Our stop was hit pretty early at $36.65.

current Position: short CNC stock @ $36.75 exit $36.65 (+0.3%)

- (or for more adventurous traders, try this option) -

Oct $35 PUT (CNC1220v35) Entry $1.20 exit $0.05 (-95.8%)

10/17/12 stopped out at $36.65
10/13/12 new stop loss @ 36.65
10/10/12 new stop loss @ 37.05
10/02/12 new stop loss @ 38.05

chart:



World Fuel Services - INT - close: 34.99 change: +0.49

Stop Loss: 35.01
Target(s): 30.15
Current Gain/Loss: - 3.3%

Entry on October 15 at $33.90
Listed on October 13, 2012
Time Frame: exit prior to the late October earnings
Average Daily Volume = 300 thousand
New Positions: see below

Comments:
10/17/12: Another bounce in INT sent shares above the $35.00 level and INT hit our stop loss.

Earlier Comments:
The plan was to keep our position size small to limit our risk. We do not want to hold over the late October earnings report (not yet confirmed).

(Small Positions)

current Position: short INT stock @ $33.90 exit $35.01 (-3.3%)

10/17/12 stopped out @ 35.01
10/15/12 triggered @ 33.90

chart:



Synaptics Inc. - SYNA - close: 24.60 change: +0.69

Stop Loss: 24.05
Target(s): 22.15
Current Gain/Loss: + 3.7%

Entry on September 26 at $24.79
Listed on September 25, 2012
Time Frame: Exit prior to the Oct. 25th earnings report
Average Daily Volume = 439 thousand
New Positions: see below

Comments:
10/17/12: Yesterday's breakout was a warning signal and that's why we decided to exit positions at the open today. SYNA opened at $23.88 before soaring to $25.01 intraday.

Earlier Comments:
I do consider this a higher-risk, more aggressive trade because SYNA has already seen a big move down. We want to limit our risk and keep our position size small.

*Small Positions*

closed Position: short SYNA stock @ $24.79 exit $23.88 (+3.7%)

- (or for more adventurous traders, try this option) -

(exit on Oct 2nd, at the open)
Oct $25 PUT (SYNA1220v25) Entry $1.15 exit $1.65 (+43.4%)

10/16/12 Prepare to exit tomorrow morning at the open
10/15/12 new stop loss @ 24.05
10/13/12 new stop loss @ 24.40, readers may want to exit early now
10/06/12 new stop loss @ 24.51
10/02/12 planned exit to close our put option at the open
10/01/12 new stop loss @ 24.70, plan on exiting our October puts at the opening bell tomorrow
09/29/12 new stop loss @ 26.05, adjust exit target to $22.15

chart:



Veeco Instruments - VECO - close: 30.10 change: +0.04

Stop Loss: 30.15
Target(s): 26.65
Current Gain/Loss: - 2.9%

Entry on October 08 at $29.75
Listed on October 6, 2012
Time Frame: exit prior to the Oct 22nd earnings report
Average Daily Volume = 740 thousand
New Positions: see below

Comments:
10/17/12: It's worse than I thought! Yesterday I mentioned my concern that VECO would hit our stop loss and then reverse lower. Instead shares gapped open higher, above our stop loss, and then reversed lower.

The stock opened at $30.61, which immediately closed our trade. Now VECO is sitting on the $30.00 level after a four-day bounce.

Earlier Comments:
A lot of investors are already bearish on this stock so there is a risk of a short squeeze should it unexpectedly move higher. The most recent data listed short interest at 29% of the 38.7 million share float. Thus you may want to use put options to limit your risk instead of shorting the stock.

closed Position: short VECO stock @ $29.75 exit $30.61 (-2.9%)

- (or for more adventurous traders, try this option) -

Nov $30 PUT (VECO1211w30) Entry $2.20 exit $1.30*(-40.9%)

10/17/12 stopped out on gap open higher at $30.61
*option exit price is an estimate since the option did not trade at the time our play was closed.
10/10/12 adjust exit target to $26.65
10/09/12 new stop loss @ 30.15
10/08/12 new stop loss @ 30.55

chart: