Editor's Note:
The market's oversold bounce continued on Friday as traders bet on a deal between democrats and republicans.

FXI was triggered on Friday. CLF has been removed.


Current Portfolio:


BULLISH Play Updates

iShares China Large Cap ETF - FXI - close: 38.36 change: +0.22

Stop Loss: 36.70
Target(s): 41.75
Current Gain/Loss: + 0.3%

Entry on October 11 at $38.25
Listed on October 10, 2013
Time Frame: 6 to 9 weeks
Average Daily Volume = 17.6 million
New Positions: see below

Comments:
10/12/13: Our new play on the FXI was triggered on Friday. As expected the Chinese ETF continued to march higher and broke out above its early October high. Our suggested entry point was hit at $38.25. I would still consider new positions now. There is no change from my new play comments on Thursday night.

This ETF might see some short-term resistance in the $39.25 area and the $40.00 level but our multi-week target is $41.75.

current Position: long the FXI (ETF) @ $38.25

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

Long 2014 Jan $40 call (FXI1418a40) entry $0.97

chart:



HEALTHSOUTH Corp. - HLS - close: 36.10 change: +0.00

Stop Loss: 34.75
Target(s): 39.75
Current Gain/Loss: unopened

Entry on October -- at $--.--
Listed on October 10, 2013
Time Frame: exit PRIOR to earnings on Oct. 28th
Average Daily Volume = 459 thousand
New Positions: Yes, see below

Comments:
10/12/13: Friday proved to be a very quiet session for shares of HLS. The stock drifted sideways hugging the $36.00 level. The intraday high was only $36.18. I am reposting my Thursday night new play description:

Why We Like It:
HLS is in the healthcare sector. The company provides specialized rehabilitative treatment. The stock has been showing consistent relative strength. HLS was relatively unaffected by the market's sell-off from its September highs. Instead HLS has managed to keep the rally going and is now up six weeks in a row. Today saw HLS breakout past short-term resistance at $36.00 and set a new closing high.

I am suggesting a trigger to open bullish positions at $36.25. If triggered our target is $39.75 but we do not want to hold over the earnings report scheduled for October 28th.

Trigger @ 36.25

Suggested Position: buy HLS stock @ (trigger)

chart:



Krispy Kreme Doughnuts, Inc. - KKD - close: 23.02 change: -0.06

Stop Loss: 21.40
Target(s): (sold half @ 23.25) exit the 2nd half at $24.75
Current Gain/Loss: (+14.5%) 2nd half = +13.4%

Entry on October 03 at $20.30
Listed on October 02, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.25 million
New Positions: see below

Comments:
10/12/13: KKD's rally has definitely stalled. Shares hit resistance near its August highs in the $23.25-23.50 zone and has been unable to break through this area. Fortunately, there hasn't been any serious profit taking. That would suggest that when KKD finally chews through all the overhead supply it will break out higher.

I am not suggesting new positions at this time. More conservative traders may want to use a higher stop loss.

Earlier Comments:
I am suggesting we sell half of our position at $23.25. We want to adjust our final exit target to $24.75.

NOTE: KKD is prone to some intraday spikes. I am suggesting small positions to limit our risk.

*small positions*

current Position: Long KKD stock @ $20.30

10/08/13 new stop loss @ 21.40
10/08/13 1st target hit at $23.25 (sell half) +14.5%
10/05/13 Strategy Update: new stop loss @ 20.45
Plus, we want to sell half of our position at $23.25 and then exit the rest of our position at $24.75.

chart:



PRD Energy - PREGF - close: 1.06 change: +0.02

Stop Loss: 0.93
Target(s): TBD
Current Gain/Loss: + 1.0%

Entry on September 27 at $1.05
Listed on September 26, 2013
Time Frame: 6 to 9 weeks
Average Daily Volume = 130 thousand
New Positions: see below

Comments:
10/12/13: Traders bought the dip in PREGF near round-number support at the $1.00 level. We've been suggesting that investors look for a bounce near $1.00 as a new entry point and the stock provided that bounce on Friday.

*Higher Risk, Speculative Trade*

current Position: Long PREGF stock @ $1.05

10/05/13 new stop loss @ 0.93

chart:



BEARISH Play Updates

Urban Outfitters - URBN - close: 35.90 change: -0.56

Stop Loss: 36.75
Target(s): 34.50
Current Gain/Loss: + 3.6%

Entry on September 24 at $37.25
Listed on September 19, 2013
Time Frame: 3 to 4 weeks
Average Daily Volume = 2.8 million
New Positions: see below

Comments:
10/12/13: Some of the retail stocks struggled on Friday. Gap Inc. (GPS) reported disappointing September same-store sales numbers and tanked on the news. Shares of URBN appeared to follow GPS lower but pared its losses by the closing bell. I am not suggesting new positions at this time.

Earlier Comments:
Our target is the November 2012 lows near $34.50. FYI: The Point & Figure chart has produced a sell signal and is forecasting at $31.00 target.

current Position: short URBN stock @ $37.25

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

Long Oct $38 PUT (URBN1319v38) entry $1.45 exit $2.85* (+96.5%)

10/09/13 planned exit to close our Oct. 38 puts at the open.
*option exit price is an estimate since the option did not trade at the time our play was closed.
10/08/13 new stop loss @ 36.75
prepare to exit the October $38 puts at the open.
10/07/13 new stop loss @ 37.25
10/05/13 new stop loss @ 37.75
09/28/13 new stop loss @ 38.25

chart:



ValueClick, Inc. - VCLK - close: 19.18 change: -0.30

Stop Loss: 20.26
Target(s): 18.05
Current Gain/Loss: + 3.4%

Entry on October 08 at $19.85
Listed on October 07, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.2 million
New Positions: see below

Comments:
10/12/13: VCLK managed to erase most of its two-day oversold bounce with a -1.5% drop on Friday. The relative weakness on Friday is encouraging. I am adjusting our stop loss down to $20.26.

current Position: short VCLK stock @ $19.85

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

Long NOV $20 PUT (VCLK1316w20) entry $1.45

10/12/13 new stop loss @ 20.26
10/08/13 new stop loss @ 20.51

chart:



CLOSED BEARISH PLAYS

Cliffs Natural Resources - CLF - close: 21.43 change: +0.76

Stop Loss: 20.85
Target(s): 16.25
Current Gain/Loss: unopened

Entry on October -- at $--.--
Listed on October 09, 2013
Time Frame: exit PRIOR to earnings on Oct. 24th
Average Daily Volume = 6.6 million
New Positions: see below

Comments:
10/12/13: The stock market's broad-based bounce on Thursday and Friday has fueled a decent rebound in CLF. The stock had been testing support near $20.00 and its 100-dma. It seems unlikely that CLF is going to hit our suggested entry point at $19.75 any time soon. Therefore tonight we are removing CLF as a bearish candidate.

Trade did not open.

10/12/13 removed from the newsletter.

chart: