CALL Play Updates

EOG Res. Inc. - EOG - close: 75.83 change: +0.04 stop: 70.80

Crude oil spiked higher this morning but the strength didn't last. EOG followed oil higher and then faded, which is fine by me. Our plan is to buy calls on a dip at $74.00. Our first target is $79.50. Our second target is $88.00. The daily chart is building an inverse H&S pattern that is forecasting a rally toward $100.

Picked on   August xx at $ xx.xx <-- TRIGGER @ 74.00
Change since picked:      + 0.00
Earnings Date           11/03/09 (unconfirmed)
Average Daily Volume =       2.4 million  
Listed on August 22, 2009         


FISERV Inc. - FISV - close: 49.30 change: +0.21 stop: 46.60

The rally in FISV stalled a bit. I would still consider new positions near $49.00 but odds are pretty good that FISV will see a dip toward $48.50-48.00 zone, which would be a better entry point. Our first target to take profit is at $52.50. I'm setting a second target to exit completely at $54.00.

Picked on   August 21 at $ 48.60 *triggered         
Change since picked:      + 0.70
Earnings Date           10/28/09 (unconfirmed)
Average Daily Volume =       1.5 million  
Listed on August 19, 2009         


Fluor Corp. - FLR - close: 55.48 change: -0.39 stop: 49.95

The rally in FLR stalled twice at $57.00 this morning and then shares gave up about 0.7% on light volume. If you're looking for a new entry point I'd wait for a dip near $52.00. FLR has already hit our first target near $55.00. Our second and final target is $59.00.

Picked on   August 17 at $ 51.00 *triggered            
Change since picked:      + 4.48
                           /1st target exceeded @ 55.10 gap open (+8.0%)
Earnings Date           08/10/09 (confirmed)
Average Daily Volume =       2.4 million  
Listed on  July 25, 2009         


Flowserve - FLS - close: 89.90 change: -1.22 stop: 84.75

We upped our entry point to a more aggressive level at $87.50 but due to the aggressive nature of the play we only want to trade small positions (1/2 our normal size or less). FLS looks poised to dip toward $87.00 soon. If triggered at $87.50 our first target is $92.25. Our second target is $98.50. Our time frame is several weeks.

Picked on   August xx at $ xx.xx <-- TRIGGER @ 87.50 (1/2 pos)
Change since picked:      + 0.00
Earnings Date           10/28/09 (unconfirmed)
Average Daily Volume =       1.1 million  
Listed on August 17, 2009         


Genesse & Wyoming - GWR - close: 31.36 change: +0.35 stop: 27.75

GWR displayed relative strength with a 1.1% gain versus a 1.0% loss in the railroad index. Volume was above average on today's rally. More conservative traders may want to take a little profit off the table now. Our first target is $32.90. Our second target is $34.75.

FYI: The plan was to use small position sizes to limit our risk.

Picked on   August 15 at $ 28.66 /gap down entry
                               /originally listed at $29.30
Change since picked:      + 2.70
Earnings Date           11/03/09 (unconfirmed)
Average Daily Volume =       230 thousand
Listed on August 15, 2009         


Grainger W.W. - GWW - close: 88.87 change: -0.95 stop: 84.50

Uh-oh! Not only did GWW produce a failed rally pattern near $90.00 it also produced a bearish engulfing candlestick pattern. I am lowering our trigger to buy calls from $88.00 to $86.50. Our first target is $93.50.

Picked on   August xx at $ xx.xx <-- TRIGGER @ 86.50 *new*
Change since picked:      + 0.00
Earnings Date           10/14/09 (unconfirmed)
Average Daily Volume =       635 thousand 
Listed on August 22, 2009         


Intl.Business Machines - IBM - cls: 119.32 change: -0.58 stop: 117.45

IBM had been a put play but we knew there was a risk shares would breakout over resistance at $120.00. Several days ago we added a breakout trigger to buy calls at $120.25. That trigger was hit this morning. Our stop loss is at $117.45. Our first target would be $124.50. Our second target will be $129.00.

NOTE: I would be a little careful here. IBM failed to hold the breakout so the move looks like a failed rally, which is short-term bearish. Wait for a new move over today's high or a close over $120.00 before launching new call positions.

Chart:

Picked on   August 24 at $120.25 
Change since picked:      - 0.93
Earnings Date           10/08/09 (unconfirmed)
Average Daily Volume =       7.9 million  
Listed on August 08, 2009         


IDEXX Labs - IDXX - close: 50.85 change: +0.12 stop: varies

IDXX spent the session trading sideways in a relatively narrow range. There is no change from my weekend update. We have two different entry points.

Our aggressive entry point is at $51.75. We want to open very small call option positions (1/2 to 1/4 normal size) with a stop loss at $49.75. Our first target is $54.90.

Our buy-the-dip entry point is at $47.50 with a stop loss at $44.95.

Picked on     July xx at $ xx.xx <-- TRIGGERs @ 47.50 or 51.75
Change since picked:      + 0.00
Earnings Date           07/24/09 (confirmed)
Average Daily Volume =       383 thousand 
Listed on  July 25, 2009         


Legg Mason - LM - close: 28.18 change: -0.45 stop: varies

This is the third time in about four weeks that the rally has reversed near resistance at $29.00. Odds just jumped that LM will dip and hit our trigger. The plan is to open small call option positions (1/2 to 1/4 our normal size) on a dip at $26.60 with a stop loss at $24.95.

We also have a more aggressive entry point to buy a breakout with a trigger at $29.50 and a stop at $26.40. Again, we want to trade small. FYI: The P&F chart is bullish with a $39 target.

Picked on     July xx at $ xx.xx <-- TRIGGER 26.60 & 29.50
Change since picked:      + 0.00
Earnings Date           07/20/09 (confirmed)
Average Daily Volume =       3.4 million  
Listed on  July 25, 2009         


Lorillard Inc. - LO - close: 78.04 change: +3.17 stop: 72.75 *new*

Over the weekend we added an aggressive breakout-trigger to buy calls at $75.75. That trigger was hit today. The stock was one of the market's best performers with a 4.2% rally. I could not find any specific news to account for the rally and the sharp move higher looks like a short squeeze. The most recent data listed short interest at more than 5% of the float. Volume was strong on the move. Right now our only target to take profits is at $79.90.

Chart:

Picked on   August 24 at $ 75.75 *triggered   
Change since picked:      + 2.29
Earnings Date           07/27/09 (confirmed)
Average Daily Volume =       1.5 million  
Listed on August 01, 2009         


Mettler Toledo - MTD - close: 87.38 change: -0.14 stop: 83.95

MTD spent most of its day in a 90-cent range hovering on either side of $87.50. We're waiting to buy calls on a dip into the $86.50-85.00 zone. If triggered our first target is $93.50. Our second target is $99.00. I am labeling this an aggressive play because volume is pretty light for this stock.

Picked on   August xx at $ xx.xx <-- TRIGGER @ 86.50
Change since picked:      + 0.00
Earnings Date           11/05/09 (unconfirmed)
Average Daily Volume =       234 thousand 
Listed on August 22, 2009         


State Street (Bank) STT - close: 53.30 change: -0.22 stop: 48.90

The banks started strong this morning and then faded. STT struggled under $55.00 again. That's okay. We're looking for a dip. Our plan is to buy calls on a dip at $52.50. Actually we can use the $52.50-50.00 zone as an entry point. Our first target is $55.00. Our second target is $59.50. Currently the Point & Figure chart is bullish with a $62 target.

Picked on   August xx at $ xx.xx <-- TRIGGER 52.50
Change since picked:      + 0.00
Earnings Date           10/13/09 (unconfirmed)
Average Daily Volume =       5.3 million  
Listed on August 19, 2009         


U.S. Oil Fund - USO - close: 38.30 change: +0.07 stop: 34.15

Crude oil rallied strongly again this morning but then it drifted lower. I'm suggesting readers be patient here for their entry point. The plan is to buy calls on the USO at $36.00. If triggered at $36.00 our first target to take profits is $39.75.

Picked on   August xx at $ xx.xx <-- TRIGGER @ 36.00 
Change since picked:      + 0.00
Earnings Date           00/00/00
Average Daily Volume =      11.5 million  
Listed on August 15, 2009         


PUT Play Updates

First Solar - FSLR - close: 124.08 chg: +2.54 stop: 141.50

Monday wasn't so bad for the bears in FSLR. The stock shot higher at the open with a nice oversold bounce. Shares were extremely oversold and definitely due for a rebound. Yet as the market began to fade this afternoon so did FSLR. I am not suggesting new bearish positions at this time. FSLR has already hit our first target at $122.50. Our second and final target is $111.00.

Picked on   August 17 at $135.88 *triggered/gap down entry
Change since picked:      -11.80
                               /1st target hit @ 122.50 (-9.8%)
Earnings Date           11/03/09 (unconfirmed)
Average Daily Volume =       3.5 million  
Listed on August 15, 2009         


Marvel Entertainment - MVL - close: 38.27 change: -0.18 stop: 39.05

MVL rose to $38.75 and reversed. I would look for a new drop under $38.00 before launching new put plays. Our target is $34.10.

Picked on   August 17 at $ 37.90 *triggered         
Change since picked:      + 0.37
Earnings Date           11/04/09 (unconfirmed)
Average Daily Volume =       710 thousand 
Listed on August 10, 2009         


Shanda Interactive - SNDA - close: 48.75 chg: +0.17 stop: 50.75

SNDA is normally a volatile stock. Today's narrow, sideways action is pretty unusual. It suggests indecision by traders. They're waiting for something. I would hesitate to open new bearish positions with the U.S. markets breaking out higher. More conservative traders may want to ratchet down their stops closer to the $50.00 level. Our target is the $41.50-40.00 zone. Remember, SNDA is a volatile stock and readers may want to use smaller position sizes.

Picked on   August 08 at $ 48.10 /gap higher entry
                               /originally listed at $47.83
Change since picked:      + 0.65
Earnings Date           09/01/09 (unconfirmed)
Average Daily Volume =       1.5 million  
Listed on August 08, 2009         


Strangle & Spread Play Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

Schlumberger - SLB - close: 57.34 change: +0.78 stop: n/a

SLB rallied again with the strength in oil this morning but gave up a good chunk of its gains. I am not suggesting new positions at this time.

The options we suggested were the September $60.00 calls (SLB-IL) and the September $45.00 puts (SLB-UI). Our estimated cost is $1.00 and we want to sell if either option hits $2.50 or higher.

Picked on   August 15 at $ 52.00 /gap down entry Aug. 17th
Change since picked:      + 5.34
Earnings Date           10/15/09 (unconfirmed)
Average Daily Volume =       9.2 million  
Listed on August 15, 2009         


CLOSED BEARISH PLAYS

Intl.Business Machines - IBM - cls: 119.32 change: -0.58 stop: 120.10

IBM traded sideways for about 25 minutes this morning and then without warning the stock shot higher. IBM broke through resistance at $120.00. Shares hit our stop loss for the put play at $120.10 and then hit our trigger to buy calls at $120.25.

Chart:

Picked on   August 08 at $118.17 /gap down entry
                               /originally listed at $119.33
Change since picked:      + 1.93<-- stopped @ 120.10 (+1.6%)
Earnings Date           10/08/09 (unconfirmed)
Average Daily Volume =       7.9 million  
Listed on August 08, 2009