Stocks pulled back on Monday but not enough to hit any of our triggers.


CALL Play Updates

Alcon Inc. - ACL - close: 140.29 change: +0.64 stop: 129.49

ACL displayed some strength and managed to close above round-number resistance at $140 in spite of the market dip. I would prefer to open new positions on a dip near $136 or $134. Our first target is $142.50. Our second target is $148.00.

Picked on September 10 at $136.75
Change since picked:       + 3.54
Earnings Date            10/21/09 (unconfirmed)
Average Daily Volume =        299 thousand 
Listed on September 10, 2009         


Allegheny Tech. - ATI - close: 34.87 change: +0.01 stop: 30.99

ATI bounced from its test of short-term technical support at the rising 10-dma. I'm not suggesting new positions at this time. ATI has already exceeded our first target. We're currently aiming for $37.00.

Picked on   August 31 at $ 30.25 *triggered         
Change since picked:      + 4.62
                               /1st target hit @ 33.85 (+11.9%)
Earnings Date           10/21/09 (unconfirmed)
Average Daily Volume =       2.7 million  
Listed on August 27, 2009         


Caterpillar - CAT - close: 52.46 change: -0.96 stop: 47.49

The pull back in the major averages was pretty light but CAT gave up almost 1.8%. I'm suggesting readers buy calls on a dip at $50.00. More conservative traders could try and hold out for a dip closer to $49.00. If we are triggered at $50.00 our first target is $54.50. Our second target is $59.00. FYI: The P&F chart is bullish with an $85 target.

Picked on September xx at $ xx.xx <-- TRIGGER @ 50.00
Change since picked:       + 0.00
Earnings Date            10/20/09 (unconfirmed)
Average Daily Volume =         10 million  
Listed on September 19, 2009         


CF Industries - CF - close: 89.02 change: -1.17 stop: 84.75

CF spiked lower this morning but found short-term support near $88.00. I would prefer to buy calls on dips near $86.00. Our first target to take profits is at $92.50. Our second target is $98.00. FYI: The P&F chart has a quadruple-top bullish breakout buy signal with a $99 target.

FYI: Agrium (AGU) is trying to buy CF but CF keeps rejecting the offer calling it too late. At the same time CF is trying to buy Terra Industries (TRA) and TRA keeps rejecting the offer calling it too low. Eventually one of these companies is going to give up or they're finally going to make a big enough offer or somebody else might step in and start bidding. There is a risk that someone bids too much and the market could think they overpaid, which might push the stock lower. This M&A dance has been going on for months and it will probably continue for months so I'm not expecting it to have much short-term impact on the stock. However, it's worth noting that CF recently filed a lawsuit to force TRA to hold their annual shareholder meeting. This way CF can try and vote some members onto the board of directors.

Picked on September 05 at $ 85.93
Change since picked:       + 3.09
Earnings Date            10/27/09 (unconfirmed)
Average Daily Volume =        653 thousand 
Listed on September 05, 2009         


Compass Minerals - CMP - close: 58.61 chg: -0.89 stop: 54.75

It proved to be a quiet session for CMP with the stock churning sideways. I would look for a dip back towards $56.00 before considering new positions. CMP has already hit our first target at $59.75. Our second and final target is $64.00. FYI: The Point & Figure chart has turned bullish with a $69 target.

Picked on September 03 at $ 55.55
Change since picked:       + 3.06
                               /1st target hit @ 59.75 (+7.5%)
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        415 thousand 
Listed on September 02, 2009         


Consol Energy - CNX - close: 46.98 change: +0.30 stop: 39.45

Hmm... CNX bounced from the $45.00 region and managed to close in positive territory. I'm tempted to buy small call positions right here with a tighter stop but for now we'll stick to the original plan.

I am suggesting readers buy calls on a dip at $42.50. If triggered our first target is $48.50. Our second target is $52.40. We'll plan to exit ahead of the late October earnings report. FYI: The Point & Figure chart is forecasting a $73 target.

Picked on September xx at $ xx.xx <-- TRIGGER 42.50
Change since picked:       + 0.00
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        3.0 million  
Listed on September 19, 2009         


Danaher Corp. - DHR - close: 67.66 change: -0.49 stop: 63.95

DHR is finally starting to correct. The stock has been short-term overbought for days. I would expect a correction toward the $65.00 level. Wait for the bounce before considering new positions. I'm upping our stop loss to $63.95. Our first target is $69.50. The Point & Figure chart is bullish with a $77 target.

Currently we only have half a position open to limit our risk given the aggressive entry point.

Picked on September 05 at $ 66.37 (buy 1/2 position)
               /originally listed at $65.76, gap higher entry @ 66.37
Change since picked:       + 1.29
Earnings Date            10/15/09 (unconfirmed)
Average Daily Volume =        2.4 million  
Listed on September 05, 2009         


Diamond Offshore - DO - close: 93.18 change: -0.81 stop: 88.49

DO dipped to $91.28 this morning and bounced. I'm surprised that this stock wasn't sold harder given the weakness in crude oil today. Readers can buy calls on this bounce or more conservative traders can wait for a bounce closer to $90.00. The plan was to use small position sizes.

We will take some money off the table at $99.90 (1st target). Our second target is $104.50. More aggressive traders can aim for $110. The P&F chart is forecasting a $114 target.

Picked on September 15 at $ 94.69 *adjusted entry point
Change since picked:       - 1.51
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        1.8 million  
Listed on September 12, 2009         


Flowserve - FLS - close: 98.18 change: +0.63 stop: 88.95

FLS displayed some relative strength with a rebound from its 10-dma and a close in positive territory. Our plan hasn't changed.

We want to buy calls on a dip into the $92.50-90.00 zone. More conservative traders can wait for the lower edge near $90.00. If we are triggered at $92.50 our first target is $99.25. Our second target is $107.50. However, we will plan to exit ahead of the late October earnings report. FYI: The P&F chart is bullish with a $128 target.

Picked on September xx at $ xx.xx <-- TRIGGER @ 92.50
Change since picked:       + 0.00
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        1.2 million  
Listed on September 19, 2009         


General Dynamic - GD - close: 63.64 change: -0.97 stop: 57.85

GD is still struggling under the $65.00 level. We're waiting for a dip to buy calls at $61.00.

Our first target is $64.90. Our second target is $69.00. Investors with a longer-term time frame may want to aim a lot higher. GD has produced an inverse H&S pattern that is forecasting an $85

Picked on September xx at $ xx.xx <-- TRIGGER @ 61.00
Change since picked:       + 0.00
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        2.3 million  
Listed on September 09, 2009         


Genesse & Wyoming - GWR - close: 31.93 change: -0.34 stop: 29.90

It was a quiet day for GWR with the stock trading sideways. I am still somewhat concerned by the relative weakness in the railroad sector. We've already taken profits once and our second target is $34.75. I am not suggesting new bullish positions at this time.

We want 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:      + 3.28
                              /take profits 09/16/09 @ 32.45 (+13.2%)
Earnings Date           11/03/09 (unconfirmed)
Average Daily Volume =       230 thousand
Listed on August 15, 2009         


Grainger W.W. - GWW - close: 90.04 change: -0.87 stop: 87.40

GWW spent most of the session trading sideways but there was a spike down about 30-minutes into trading. I suspect it's a bad tick but it looks like GWW spiked down to $87.90 three times between 9:55 and 10:00 this morning. The $88.00 level happens to be support bolstered by the rising 50-dma. I cautioned traders over the weekend that GWW would probably retest $88 again. Our first target is $93.50. Our second target is $97.50.

Picked on September 1 at $ 86.00 *triggered  
Change since picked:      + 4.04
Earnings Date           10/14/09 (unconfirmed)
Average Daily Volume =       635 thousand 
Listed on August 22, 2009         


Intl. Bus. Mach. - IBM - close: 121.57 chg: -0.54 stop: 117.75

Traders bought the dip at $120.88 this morning but that doesn't mean IBM won't slip lower toward $120.00. Broken resistance near $120 should be new support. I would look for dips near $120 as entry points. Our first target to take profits is at $126.00. Our second target is $129.75. We will plan to exit ahead of IBM's earnings report in mid October.

Picked on September 16 at $121.82
Change since picked:       - 0.25
Earnings Date            10/15/09 (unconfirmed)
Average Daily Volume =        5.3 million  
Listed on September 16, 2009         


iShares Financials - IYF - close: 53.22 change: -0.44 stop: 49.49

Financials led the markets lower in Europe today. When the IYF opened it gapped open lower near $53.00. I don't see any changes from my weekend comments. I would wait for a dip and a bounce from $52.00 or the $50.00 level before considering new bullish positions. Our first target is $57.00. Our second target is $60.00.

Picked on September 15 at $ 52.60 *triggered  
Change since picked:       + 0.62
Earnings Date            00/00/00
Average Daily Volume =        5.1 million  
Listed on September 01, 2009         


Mettler Toledo - MTD - close: 91.76 change: -1.11 stop: 86.95

After several days of gains MTD is starting to see some profit taking. Shares might have short-term support at $90.00 and then again at $88.00. MTD has already hit our first target at $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 27 at $ 88.50 *triggered  (1/4 normal size)
Change since picked:      + 3.26
                             /1st target hit @ 93.50 (+5.6%)
Earnings Date           11/05/09 (unconfirmed)
Average Daily Volume =       234 thousand 
Listed on August 22, 2009         


Occidental Petrol. - OXY - close: 77.09 change: -0.06 stop: 73.75

I am surprised that OXY wasn't weaker given the sell-off in crude oil today. I would still wait for a bounce from $75 or $74 before launching new positions. OXY has exceeded our first target and we're currently aiming for $79.85 but I'm tempted to raise the second target toward $82.50. The P&F chart is bullish with a $92 target.

Picked on   August 27 at $ 72.00 *triggered         
Change since picked:      + 5.09
                    /1st target exceeded, gap higher @ 77.23 (+7.2%)
Earnings Date           10/28/09 (unconfirmed)
Average Daily Volume =       5.0 million  
Listed on August 26, 2009         


PPG Inds. Inc. - PPG - close: 59.69 change: +0.04 stop: 54.95

PPG managed to close in positive territory after traders bought the dip this morning. In spite of this strength the stock is still challenging resistance at $60.00. I would prefer to buy calls on a bounce from the $56-55 zone. PPG has already exceeded our first target and we're currently aiming for $63.00. The P&F chart is very bullish with a $90 target.

Picked on   August 28 at $ 55.65
Change since picked:      + 4.04
                             /1st target exceeded @ 60.05 (7.9%)
Earnings Date           10/27/09 (unconfirmed)
Average Daily Volume =       1.6 million  
Listed on August 27, 2009         


SPX Corp. - SPW - close: 62.91 change: -0.91 stop: 57.25

SPW is starting to retreat after a week of consolidating sideways. Our plan is to buy calls at $60.50. More conservative traders could try and wait for a dip near $58.50 instead. If triggered our first target is $64.00. Our second target is $68.50.

Picked on September xx at $ xx.xx <-- TRIGGER @ 60.50
Change since picked:       + 0.00
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        570 thousand 
Listed on September 12, 2009         


SOHU.com Inc. - SOHU - close: 68.86 change: -0.41 stop: 63.25

SOHU is still correcting and we could see the stock hit our trigger at $67.50 soon. More conservative traders may want to wait for a dip closer to the $66.00-65.00 zone.

Our first target is $72.50. Our second target is $77.00.

Picked on September xx at $ xx.xx <-- TRIGGER @ 67.50
Change since picked:       + 0.00
Earnings Date            10/26/09 (unconfirmed)
Average Daily Volume =        577 thousand 
Listed on September 15, 2009         


State Street (Bank) STT - close: 52.26 change: -2.13 stop: 49.45

Yuck! STT was weak the entire day. The banking sectors were down but only traded sideways after the initial dip. STT couldn't find the brakes to slow down. More conservative traders may want to exit early right here. I'm not suggesting new bullish positions at this time.

STT has already hit our first target. Our second target is $59.80. Currently the Point & Figure chart is bullish with a $62 target.

Picked on   August 31 at $ 52.00 
Change since picked:      + 0.26
                             /1st target hit @ 55.00 (+5.7%)
Earnings Date           10/13/09 (unconfirmed)
Average Daily Volume =       5.3 million  
Listed on August 19, 2009         


United Health - UNH - close: 28.59 change: +0.01 stop: 27.49

It was a forgettable day for UNH with the stock trading in a narrow range.

Right now the plan is to buy calls on a breakout with a trigger at $30.55. If triggered our first target to take profits is $34.50. Our second target is $37.50.

FYI: Readers may want to consider a strangle or a straddle on this stock instead. That way you don't care what direction it moves. Just make sure you give yourself enough time.

Picked on   August xx at $ xx.xx <-- TRIGGER @ 30.55
Change since picked:      + 0.00
Earnings Date           10/20/09 (unconfirmed)
Average Daily Volume =       9.2 million  
Listed on August 29, 2009         


U.S. Oil Fund - USO - close: 35.85 change: -1.27 stop: 34.95

Oil made headlines today. A bounce in the U.S. dollar pushed crude oil futures lower. When the stock market opened the USO gapped open lower to catch up with oil prices. The USO is now testing technical support at its 100-dma and the trendline of higher lows. A breakdown here would be pretty bearish. More conservative traders may want to raise their stops a little toward $35.50. We can buy calls on a bounce from here but the top of the gap near $37.00 is now short-term resistance.

Our first target is $39.95. Our second target is $42.50.

FYI: This pull back to support would make a good entry point for some sort of neutral strategy like a straddle or a strangle.

Picked on   August 31 at $ 36.50 
Change since picked:      - 0.65
Earnings Date           00/00/00
Average Daily Volume =      11.5 million  
Listed on August 15, 2009         


Waters Corp. - WAT - close: 56.30 change: +0.98 stop: 49.30

WAT is surging higher without us. The stock was upgraded this morning and shares hit $57.32 before paring its gains. We're still sitting on the sidelines waiting for a dip.

Currently the plan is to buy calls on a pull back at $53.50. If triggered our first target is $59.50. The P&F chart is bullish with a $69 target. We do not want to hold over the mid October earnings report.

Picked on September xx at $ xx.xx <-- TRIGGER 53.50
Change since picked:       + 0.00
Earnings Date            10/20/09 (unconfirmed)
Average Daily Volume =        809 thousand 
Listed on September 12, 2009         


PUT Play Updates

*Currently we do not have any put play updates*


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.)

Cigna Corp. - CI - close: 31.75 change: -0.09 stop: n/a

There is nothing new to add to my prior comments on CI. I would still consider new strangles on a dip in the $30.25-29.75 zone but readers may want to use November or January options instead.

The options I suggested were the October $35 calls (CI-JG) and the October $25 puts (CI-VE). Our estimated cost was $1.20. We want to sell if either option hits $2.50 or higher. The closer we can open this trade to $30.00 the better.

Picked on September 08 at $ 29.40
Change since picked:       + 2.35
Earnings Date            11/05/09 (unconfirmed)
Average Daily Volume =        3.8 million  
Listed on September 08, 2009