We continue to fine tune the play list with couple of new stops and a couple of bullish candidates hitting entry triggers.


CALL Play Updates

Apple Inc. - AAPL - close: 170.05 change: +0.60 stop: 163.40

It would be understandable to be disappointed in the market's and AAPL's performance today. The positive DELL earnings and the positive INTC news set tech stocks poised for gains this morning. Then AAPL announced it had reached a deal with China Unicom to bring the iPhone to the largest mobile phone market in the world - China. The iPhone launch in China is expected in the fourth quarter this year. Yet in spite of all this positive news AAPL rallied to $172.49 this morning and then gave back most of its gains. I believe we can blame it on end of the week and end of the month profit taking. The stock market is up on the month and traders are a little nervous given the overbought condition.

I remain bullish on AAPL and would use dips in the $166-165 region as new entry points to buy calls. Our first target is $174.00. Our second target is $179.00. FYI: The P&F chart points to a $231 target.

Suggested Options:
If AAPL provides a new entry point I would trade the September or October calls. Keep in mind that Septembers expire in three weeks.

Annotated Chart:

Picked on   August 26 at $166.50 *(small positions 1/2 to 1/4)
Change since picked:      + 3.55
Earnings Date           10/21/09 (unconfirmed)
Average Daily Volume =        14 million  
Listed on August 25, 2009         


Allegheny Tech. - ATI - close: 32.01 change: +1.14 stop: 27.95

ATI displayed relative strength on Friday. The stock gapped higher with the market, filled the gap, and then climbed back toward its highs for the day for a 3.6% gain. Volume was strong. The action on Friday was bullish. However, instead of chasing this move I'm still suggesting we wait for a dip.

I am suggesting readers buy calls on a dip at $30.25. We'll use a stop loss at $27.95. If triggered our first target is $34.50. Our second target is $39.00. Time frame on the first target is only two or three weeks. The $39 target could take several weeks.

Suggested Options:
I am suggesting the September or October call options depending on your time frame. It is always up to the individual trader to decide which month and which strike price best suits your trading style and risk profile.

BUY CALL SEP 30.00 AAS-IF open interest=5210 current ask $2.80
BUY CALL SEP 32.00 AAS-IO open interest=3167 current ask $1.60
BUY CALL SEP 35.00 AAS-IG open interest=1430 current ask .60

BUY CALL OCT 30.00 AAS-JF open interest=3250 current ask $3.70
BUY CALL OCT 32.00 AAS-JO open interest= 879 current ask $2.60
BUY CALL OCT 35.00 AAS-JG open interest=2201 current ask $1.45

Annotated Chart:

Picked on   August xx at $ xx.xx <-- TRIGGER @ 30.25
Change since picked:      + 0.00
Earnings Date           10/21/09 (unconfirmed)
Average Daily Volume =       2.7 million  
Listed on August 27, 2009         


CF Industries - CF - close: 82.12 change: -0.06 stop: 79.75

There is no change for us with CF. Aggressive traders might be tempted to buy calls on this bounce near $80.50 and its 30-dma. I am suggesting readers wait for the breakout over resistance.

Currently our plan is to buy calls on a breakout over resistance with a trigger to launch positions at $85.25. If triggered at $85.25 our stop loss is at $79.75 and our first target is $89.85. Our second target is $97.50. My time frame is four to six weeks. FYI: A breakout over $85.00 would produce a new triple-top breakout buy signal on the Point & Figure chart.

Trading note: Investors should note that Agrium (AGU) has been trying to buy CF for months. CF has been trying to buy Terra Industries (TRA) for months. Nobody is selling because they claim the offers don't fully value the company (a.k.a. it's not enough money). There is potential upside if AGU finally makes a high enough offer or someone else steps in. There is potential downside if CF makes too high a bid for TRA and the market thinks they overpaid. This M&A merger dance hasn't affected the stock much lately but it is a risk either direction.

Suggested Options:
If CF hits our trigger at $85.25 I would use the October calls.

Annotated Chart:

Picked on   August xx at $ xx.xx <-- TRIGGER 85.25
Change since picked:      + 0.00
Earnings Date           10/27/09 (unconfirmed)
Average Daily Volume =       872 thousand 
Listed on August 24, 2009         


EOG Res. Inc. - EOG - close: 72.96 change: -1.02 stop: 69.90

Our bullish play on EOG has opened in the last couple of days. Yet the action in the stock hasn't been very strong. EOG seems to be under performing the sector indices. I am suggesting that readers scale back their position size on EOG. We don't have to exit completely but reduce the exposure by half*. There are other stocks in the oil sector that are showing more relative strength. I suspect that EOG will retest its 50-dma and probably the $70.00 level before bouncing higher, which puts us at risk for being stopped out. Look to buy calls on a bounce from $70.00.

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.

*The plan was to trade small from the beginning to cutting our position in half now should leave us with a very small position.

Suggested Options:
If EOG provides a new entry point I would use the September or October calls. Keep in mind that Septembers expire in three weeks.

Annotated Chart:

Picked on   August 26 at $ 73.25 /gap down entry point 
                               /listed at $73.98
Change since picked:      - 0.29
Earnings Date           11/03/09 (unconfirmed)
Average Daily Volume =       2.4 million  
Listed on August 22, 2009         


FISERV Inc. - FISV - close: 49.21 change: -0.41 stop: 46.60

FISV has failed under $50.00 for the second time in three days. Volume has been fading as we got closer and closer to the weekend. Short-term technicals are starting to weaken. I suspect that FISV will retest $48.00 and possibly its rising 50-dma. Wait for the dip as our next entry point. Our first target to take profit is at $52.50. I'm setting a second target to exit completely at $54.00.

Suggested Options:
If FISV provides a new entry point I would use the September or October calls.

Annotated Chart:

Picked on   August 21 at $ 48.60 *triggered         
Change since picked:      + 0.61
Earnings Date           10/28/09 (unconfirmed)
Average Daily Volume =       1.5 million  
Listed on August 19, 2009         


Fluor Corp. - FLR - close: 53.58 change: -0.51 stop: 49.95

The short-term action in FLR continues to look bearish. We've been expecting a dip toward $52.50 and I still think it's going to happen. The $52.50 region should be support with its 50-dma, 40-dma and its long-term, multi-month trendline of higher lows. More conservative traders may want to up their stops toward $51.00 or $52.00 to reduce risk in case FLR breaks down.

Wait for a bounce from the trendline before considering new bullish positions. FLR has already hit our first target near $55.00. Our second and final target is $59.00.

Suggested Options:
If FLR does bounce from its rising trendline I would use the October calls. Septembers would work but they expire in three weeks.

Annotated Chart:

Picked on   August 17 at $ 51.00 *triggered            
Change since picked:      + 2.58
                           /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: 89.40 change: +0.90 stop: 84.75

FLR hit our aggressive entry point last week. I call it aggressive because FLS is overbought considering it was trading near $60 in early July. I also want to remind readers that this is an aggressive trade thanks to the bearish, wedge-like pattern building on FLS' chart (see below), which is why we wanted to trade small positions. Traders bought the dip near $85.50 on Thursday. More conservative traders may want to up their stop toward that low. Some of the short-term technicals are beginning to falter. Yet I suspect that FLR might retest the $85.50-85.00 zone so we're keeping our stop loss at $84.75. Our first target is $92.25. Our second target is $98.50. Our time frame is several weeks.

Suggested Options:
If FLS provides another entry point I would use the October calls.

Annotated Chart:

Picked on   August 26 at $ 87.50  (1/2 pos)
Change since picked:      + 1.90
Earnings Date           10/28/09 (unconfirmed)
Average Daily Volume =       1.1 million  
Listed on August 17, 2009         


Genesse & Wyoming - GWR - close: 31.43 change: +0.37 stop: 28.90*new*

It's been a slightly volatile week for the railroad stocks. GWR dipped to $30.50 on Thursday and bounced. Shares still have a bullish pattern while some of its peers are seeing their momentum wane. I am upping our stop loss to $28.90. At this time I would wait for a bounce near $30.00 or the $29.50 level before considering new bullish call positions. 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.

Suggested Options:
If GWR provides another entry point we want to trade the October calls.

Annotated Chart:

Picked on   August 15 at $ 28.66 /gap down entry
                               /originally listed at $29.30
Change since picked:      + 2.77
Earnings Date           11/03/09 (unconfirmed)
Average Daily Volume =       230 thousand
Listed on August 15, 2009         


Grainger W.W. - GWW - close: 88.93 change: -0.39 stop: 84.75

It looks like GWW continues to consolidate in a bull-flag type of pattern. More conservative traders can wait for the breakout. We have two different entry points. I'm moving the dip entry point from $86.50 down to $86.00 and I'm upping the stop loss to $84.75. The breakout entry point is unchanged at $90.50. We want to trade smaller positions on the breakout. Our first target is $93.50. Our second target is $97.50.

Suggested Options:
If GWW hits one of our triggers I am suggesting the October calls. Depending on our entry point I suggest the $85, 90, or 95 strikes.

Annotated Chart:

Picked on   August xx at $ xx.xx <-- TRIGGER @ 86.00 or 90.50
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: 118.22 change: -1.21 stop: 117.45

I have to issue a reversal warning for IBM. The stock has produced a bearish engulfing candlestick on Friday that coincides with yet another failed rally near $120.00. Monday's pop over resistance at the $120 level is starting to look like a bull-trap pattern. Now normally an engulfing candlestick needs confirmation but any significant drop under Friday's low to confirm the reversal will most likely stop us out at $117.45.

Should IBM surprise us and move higher I'd wait for a close over $120 or a new intraday rise over $121 to launch positions. Our first target is $124.50. Our second target is $129.00.

Suggested Options:
I am not suggesting new positions at this time but if IBM does provide a new entry point I would use the October calls.

Annotated Chart:

Picked on   August 24 at $120.25 
Change since picked:      - 2.03
Earnings Date           10/08/09 (unconfirmed)
Average Daily Volume =       7.9 million  
Listed on August 08, 2009         


IDEXX Labs - IDXX - close: 51.00 change: -0.44 stop: 49.75

Friday was the fourth time in a row that IDXX has produced a failed rally at the $52.00 level. Yet there is little follow through on the sell-off. If the stock can breakthrough this resistance it could portend a sharp move higher. I am suggesting readers wait for the move over $52.00 to launch new call positions. More conservative traders might want to up their stops near the $50.50 level.

Currently our first target to take profits is at $54.90. Our second target is $58.00.

Suggested Options:
If IDXX provides a new entry point I would use the October calls.

Annotated Chart:

Picked on   August 25 at $ 51.75 *small position sizes (1/2 to 1/4)
Change since picked:      - 0.75
Earnings Date           07/24/09 (confirmed)
Average Daily Volume =       383 thousand 
Listed on  July 25, 2009         


Legg Mason - LM - close: 28.92 change: -0.16 stop: 26.40

The market's strength this morning was enough to push LM past resistance and hit our breakout trigger at $29.50. Unfortunately the rally didn't last very long and LM slipped back into its previous trading range. While our play is open with a stop loss at $26.40 more conservative traders might want to up their stops toward the $28.00 region. Furthermore I would wait for a new rise over $29.50 before launching new positions. Don't forget that we wanted to use small position sizes (1/2 to 1/4 normal size).

Our first target is $32.45. Our second target is $34.85. FYI: The P&F chart is bullish with a $39 target.

Suggested Options:
If LM provides a new entry point over $29.50 we want to trade the October calls.

Annotated Chart:

Picked on   August 28 at $ 29.50 *triggered               
Change since picked:      - 0.58
Earnings Date           07/20/09 (confirmed)
Average Daily Volume =       3.4 million  
Listed on  July 25, 2009         


Mettler Toledo - MTD - close: 88.57 change: +0.79 stop: 84.99

Thursday's rebound continued into Friday and the stock inched toward new highs for the year. We have a stop loss at $84.99. More conservative traders may want to adjust their stop toward last week's low near $85.94. Friday's close over $88.50 is bullish and I would still consider new call positions here, albeit in small size (about 1/4 our your normal trade). 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.

Suggested Options:
We want to trade the September or October calls. I prefer the $85 and $90 strikes.

Annotated Chart:

Picked on   August 27 at $ 88.50 *triggered  (1/4 normal size)
Change since picked:      + 0.07
Earnings Date           11/05/09 (unconfirmed)
Average Daily Volume =       234 thousand 
Listed on August 22, 2009         


Newmarket Corp. - NEU - close: 83.85 change: -0.80 stop: 79.00

NEU has been consolidating the last few days after hitting new 16-month highs earlier in the week. Volume has been slipping on the pull back, which is what we want to see. I would still consider new positions now but our plan calls for buying the second half of our position at $80.50.

Our first target to take profits is at $88.50. Our second and final target is $92.50. FYI: The Point & Figure chart is bullish with a $116.00 target.

Suggested Options:
We want to trade the September or October calls. Just remember that Septembers expire in three weeks. It could take longer than that to reach our second target.

Annotated Chart:

Picked on   August 24 at $ 84.33 <- buy half now 8/24/09
                    /originally listed at $83.54, gapped higher @ 84.33
Change since picked:      - 0.48

Picked on   August xx at $ xx.xx <-- TRIGGER @ 80.50 for 2nd half
Change since picked:      + 0.00
Earnings Date           10/27/09 (unconfirmed)
Average Daily Volume =       141 thousand 
Listed on August 24, 2009         


Occidental Petrol. - OXY - close: 74.52 change: -0.05 stop: 69.45

Thursday's bounce in oil and the oil sector stalled a bit on Friday. OXY traded sideways. Should OXY dip toward $72.00 again I would use it as another entry point to buy calls. Our first target is $77.00. Our second target is $79.85.

Suggested Options:
I am suggesting readers take advantage of the September, October or November calls. Keep in mind that Septembers expire in three weeks.

Annotated Chart:

Picked on   August 27 at $ 72.00 *triggered         
Change since picked:      + 2.52
Earnings Date           10/28/09 (unconfirmed)
Average Daily Volume =       5.0 million  
Listed on August 26, 2009         


PPG Inds. Inc. - PPG - close: 55.94 change: +0.75 stop: 52.95

Thankfully we did not have to wait very long for PPG to hit our breakout trigger to buy calls at $55.65. Shares rallied again with strong volume on Friday. I would still consider new positions now but more conservative traders might want to wait for a dip back toward $55.00. Our first target is $59.80.

Suggested Options:
I am suggesting the September calls. I prefer the $55 and $60 strikes.

Annotated Chart:

Picked on   August 28 at $ 55.65
Change since picked:      + 0.29
Earnings Date           10/27/09 (unconfirmed)
Average Daily Volume =       1.6 million  
Listed on August 27, 2009         


State Street (Bank) STT - close: 52.98 change: -0.45 stop: varies

Nothing has changed for us with STT. The stock spent last week consolidating sideways with a slight downward trend. The larger trend is still up. I am tempted to lower our buy the dip trigger toward the $50.50-50.00 zone but I'm going to keep it at $52.00. We have two different strategies listed to play STT.

Our aggressive breakout trigger is at $55.60 and we'll use a stop loss at $51.85 (updated stop). Our first target is $59.80. This is an aggressive entry so I'm suggesting smaller position sizes at least 1/2 to 1/4 our normal trade.

We also have a buy the dip entry point at $52.00 with a stop loss at $49.45 (updated stop). Our first target is $55.00. Our second target is $59.80. Currently the Point & Figure chart is bullish with a $62 target.

Suggested Options:
At this point I would use the October or November calls to trade STT.

Annotated Chart:

Picked on   August xx at $ xx.xx <-- TRIGGER 52.00 or 55.60
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: 37.66 change: -0.06 stop: 34.49 *new*

Thursday's bounce in oil looks like it wants to roll over again. I am raising our trigger to buy calls on the USO from $36.00 to $36.50. Our new stop loss is $34.49 near the rising 100-dma. If triggered our first target to take profits is at $39.95. Really conservative traders may want to use a stop loss just under $36.00.

Suggested Options:
Strikes are available at $1.00 increments. We want to use the Octobers.

Annotated Chart:

Picked on   August xx at $ xx.xx <-- TRIGGER @ 36.50 
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: 124.21 chg: -1.67 stop: 135.25 *new*

The bounce in FSLR struggled on Friday with shares reversing under their 10-dma. While the trend is down the stock remains oversold and volume has been getting lighter. I am not suggesting new bearish positions at this time. Please note that I am lowering our stop loss to $135.25. FSLR has already hit our first target at $122.50. Our second and final target is $111.00.

Suggested Options:
I am not suggesting new positions at this time.

Annotated Chart:

Picked on   August 17 at $135.88 *triggered/gap down entry
Change since picked:      -11.67
                               /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: 38.65 change: +0.41 stop: 39.05

MVL continues to bounce around the $38-39 zone. Technical indicators are mixed. I am suggesting readers wait for another drop to $37.90 or lower before opening new put positions. Our target is $34.10.

Suggested Options:
If MVL provides a new entry point we want to use the October puts.

Annotated Chart:

Picked on   August 17 at $ 37.90 *triggered         
Change since picked:      + 0.75
Earnings Date           11/04/09 (unconfirmed)
Average Daily Volume =       710 thousand 
Listed on August 10, 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.)

Research In Motion - RIMM - close: 73.83 chg: +0.20 stop: n/a

RIMM has certainly been accommodating. The stock offered us another entry point at the $75.00 level on Friday. Shares spiked to $75.65 and then faded lower. At this point I am narrowing our entry zone to the $74.50-75.50 region. The options suggested were the September $80 calls (RFY-IP) and the September $70 puts (RFY-UN). Our estimated cost was $2.64. We want to sell if either option hits $6.00 or higher.

Suggested Options:
We have three weeks for RIMM to pick a direction and move! Readers may want to consider using October options.

Annotated Chart:

Picked on   August 25 at $ 75.56
Change since picked:      - 1.73
Earnings Date           09/24/09 (confirmed)
Average Daily Volume =      11.7 million  
Listed on August 25, 2009         


Schlumberger - SLB - close: 57.36 change: +0.46 stop: n/a

SLB acts like it wants to go higher. Shares have new support near $55.00 and a cloud of moving averages. I am not suggesting new strangle positions at this time but readers might want to consider directional call plays.

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.

Suggested Options:
September options expire in three weeks. I'm not suggesting new positions.

Annotated Chart:

Picked on   August 15 at $ 52.00 /gap down entry Aug. 17th
Change since picked:      + 5.36
Earnings Date           10/15/09 (unconfirmed)
Average Daily Volume =       9.2 million  
Listed on August 15, 2009         


CLOSED BULLISH PLAYS

Lorillard Inc. - LO - close: 74.69 change: -1.59 stop: 73.25 *new*

LO has suffered a pretty nasty reversal. We had the big bullish breakout on Monday. LO hit our breakout trigger. Then shares reversed and investors sold it everyday following. LO hit our new stop loss at $73.25 on Friday. There was no news behind the recent weakness.

Chart:

Picked on   August 24 at $ 75.75 *triggered   
Change since picked:      - 2.50<-- stopped out @ 73.25 (-3.3%)
Earnings Date           07/27/09 (confirmed)
Average Daily Volume =       1.5 million  
Listed on August 01, 2009