CALL Play Updates

Alcon Inc. - ACL - close: 137.28 change: -1.39 stop: 133.90

The pull back in ACL wasn't so bad. Shares only lost 1% versus a 2.5% drop in the S&P 500. I would expect another dip toward $134.00. We can use a bounce from this level as a new entry point to buy calls. ACL has already hit our first target. Our second target is $148.00.

Picked on September 10 at $136.75
Change since picked:       + 0.53
                             /1st target hit @ 142.50 (+4.2%)
Earnings Date            10/21/09 (unconfirmed)
Average Daily Volume =        299 thousand 
Listed on September 10, 2009         


Allegheny Tech. - ATI - close: 33.28 change: -1.71 stop: 31.45

We've been expecting a correction in ATI for days. It looks like it's finally happening. The $32.00 level should offer some support. I'm not suggesting new positions at this time. ATI has exceeded our first target. We're currently aiming for $37.00.

Picked on   August 31 at $ 30.25 *triggered         
Change since picked:      + 3.03
                               /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: 49.45 change: -1.88 stop: 47.49

CAT has finally pulled back toward round-number support at $50.00 and hit our trigger to buy calls. The $49.00 level should offer some additional support since that's where we'll find the 50% retracement of the September rally. If you haven't entered positions yet I'd wait for a bounce.

Our first target is $54.50. Our second target is $59.00. FYI: The P&F chart is bullish with an $85 target.

Chart:

Picked on   October 01 at $ 50.00
Change since picked:       - 0.55
Earnings Date            10/20/09 (unconfirmed)
Average Daily Volume =         10 million  
Listed on September 19, 2009         


CF Industries - CF - close: 84.20 change: -2.03 stop: 83.65

Right on cue CF has fallen back toward short-term support near $84.00. A bounce from here can be used as a new entry point. Unfortunately, the short-term posture for the stock is bearish and shares look poised to move lower.

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. CF started their bid in January at $2.1 billion, bumped it to $2.2 billion in March, and then raised it to $4 billion in August. TRA has consistently rejected CF's offers.

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.

September 24th TRA announced a one-time, special cash dividend to shareholders of $7.50 per share, worth about $750 million. Details and dates of the dividend are not know yet but it's expected to be paid in the fourth quarter of 2009. It's been suggested that TRA is doing this to make themselves look less attractive to CF.

M&A UPDATE 09/28/09 :
CF is getting more aggressive with its bid to acquire TRA. The company announced this morning that it had already purchased 7 percent of TRA's stock on the open market.

Picked on September 05 at $ 85.93
Change since picked:       - 1.73
Earnings Date            10/27/09 (unconfirmed)
Average Daily Volume =        653 thousand 
Listed on September 05, 2009         


Core Labs - CLB - close: 99.90 change: -3.19 stop: 92.25

Anything related to commodities was hit with profit taking. Even though oil didn't decline the oil service sector lost 3.5%. Shares of CLB gave up 3%.

Our plan with CLB is unchanged. We're waiting for a dip to $96.00 to buy calls. If triggered our first target is $104. Our second target is $109.50.

Picked on September xx at $ xx.xx <-- TRIGGER @ 96.00
Change since picked:       + 0.00
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        175 thousand 
Listed on September 23, 2009         


Compass Minerals - CMP - close: 59.92 chg: -1.70 stop: 56.40 *new*

CMP is finally seeing some profit taking. I'm raising our stop loss to $56.40.

I'm not suggesting new positions at this time. 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:       + 4.37
                               /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: 43.28 change: -1.83 stop: 39.45

CNX is another commodity-related stock (coal) that was hit hard by profit taking. Shares gave up 4%. I've been suggesting readers wait for a dip near $42.00.

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 25 at $ 43.77 /gap down entry
Change since picked:       - 0.49
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        3.0 million  
Listed on September 19, 2009         


Danaher Corp. - DHR - close: 65.29 change: -2.03 stop: 63.95

DHR has broken short-term support at $66.00 and I would expect a drop toward $64.00 before we see a bounce. I'm not suggesting new positions at this time.

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:       - 1.08
Earnings Date            10/22/09 (confirmed)
Average Daily Volume =        2.4 million  
Listed on September 05, 2009         


Diamond Offshore - DO - close: 93.78 change: -1.74 stop: 88.49

DO held up better than most of the oil service stocks. Shares gave up 1.8%. Look for support in the $91-90 zone. 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:       - 0.91
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        1.8 million  
Listed on September 12, 2009         


Dril-Quip, Inc. - DRQ - close: 48.42 change: -1.22 stop: 45.90

DRQ is testing prior resistance and what should be support near $48.00. We can buy calls on this dip or a bounce from here. Our first target is $53.00. Our second target is $57.50. The Point & Figure chart is bullish with a $65.00 target.

Picked on September 28 at $ 48.50
Change since picked:       - 0.08
Earnings Date            11/10/09 (unconfirmed)
Average Daily Volume =        282 thousand 
Listed on September 26, 2009         


Flowserve - FLS - close: 95.96 change: -2.58 stop: 87.45

FLS is falling back toward support near $96.00. I'm expecting the correction to reach the $90.00 region, which is why our trigger to buy calls is at $91.00. If triggered at $91.00 our first target is $99.50.

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 @ 91.00
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: 63.15 change: -1.45 stop: 57.85

We've been expecting a dip so this move doesn't surprise us. The plan is to buy calls in the $61.00-60.00 zone.

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         


Helmerich & Payne - HP - close: 37.94 chg: -1.59 stop: 36.65

The oil service stocks under performed today and HP lost 4%. Wait for a bounce before considering new bullish positions.

Our first target is $43.50. I suggested the November $40 call (HP-KH), which hit $2.05 on the dip. FYI: The P&F chart is bullish with a $52 target.

Picked on September 30 at $ 38.50
Change since picked:       - 0.56
Earnings Date            11/19/09 (unconfirmed)
Average Daily Volume =        1.2 million  
Listed on September 29, 2009         


Illumina Inc. - ILMN - close: 41.31 change: -1.19 stop: 37.45

The move in ILMN today looks like a short-term bearish reversal with a failed rally and bearish engulfing candlestick.

Currently our plan is to buy calls on a dip at $39.10.

If we are triggered at $39.10 our first target is $42.40. Our second target is $46.75 but that's probably being optimistic given our time frame. ILMN reports earnings in less than four weeks. We'll plan to exit before earnings are announced.

Picked on September xx at $ xx.xx <-- TRIGGER @ 39.10
Change since picked:       + 0.00
Earnings Date            10/20/09 (unconfirmed)
Average Daily Volume =        1.6 million  
Listed on September 26, 2009         


iShares Financials - IYF - close: 50.64 change: -2.03 stop: 49.49

Financial stocks led the market lower and the IYF lost 3.8%. Shares are nearing potential support near $50.00 and it 50-dma. Wait for another bounce 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:       - 1.96
Earnings Date            00/00/00
Average Daily Volume =        5.1 million  
Listed on September 01, 2009         


NYSE Euronext - NYX - close: 27.76 change: -1.13 stop: 27.75

Our bullish play on NYX is in trouble. The stock has closed under last week's lows and under its 50-dma. This is bearish. The only reason to not exit now is potential support at the 100-dma directly below where the stock closed. Our first target is $31.95. Our second target is $34.50.

Picked on September 22 at $ 29.82
Change since picked:       - 2.06
Earnings Date            10/30/09 (unconfirmed)
Average Daily Volume =        3.0 million  
Listed on September 22, 2009         


Oil Service Holders - OIH - close: 113.55 chg: -3.88 stop: 112.99

Oil service stocks under performed the rest of the market with a 3.3% decline. Shares are now testing their recent September lows. If shares continue to drop I'd look for additional support near the 50-dma around $110 or the 100-dma around $105. Our first target is $124.00.

Picked on September 28 at $117.40
Change since picked:       - 3.85
Earnings Date            00/00/00
Average Daily Volume =        6.6 million  
Listed on September 28, 2009         


PPG Inds. Inc. - PPG - close: 56.56 change: -1.65 stop: 54.95

We've been looking for a dip back toward $56.00 and it looks like PPG will hit that level tomorrow. P> I'm not suggesting new positions at this time. 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:      + 0.91
                             /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: 58.05 change: -3.22 stop: 57.45

Right on cue SPW has fallen into the $60-58 zone. I've been suggesting readers buy calls on a dip in this area. Now that SPW has closed right on support at $58.00 readers may want to wait for a bounce first. FYI: The December 60 calls gapped open lower at $3.50 today. Our first target is $64.95. Our second target is $68.75.

Chart:

Picked on   October 01 at $ 60.00
Change since picked:       - 1.95
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        570 thousand 
Listed on September 12, 2009         


SOHU.com Inc. - SOHU - close: 65.72 change: -3.06 stop: 63.75

SOHU gapped open lower and fell 4.4% by the closing bell. Shares ended up hitting the $66.00 level after all. I'd keep an eye on the $64.00 level and use a bounce near $64 as a chance to double down on call positions.

Last night we decided to open aggressive yet small call positions and I've adjusted our entry for the gap down.

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

Picked on   October 01 at $ 68.24 /gap open entry
                                 (small positions 1/2 to 1/4)
Change since picked:       - 2.52
Earnings Date            10/26/09 (unconfirmed)
Average Daily Volume =        577 thousand 
Listed on September 15, 2009         


Waters Corp. - WAT - close: 54.14 change: -1.72 stop: 51.90

WAT is correcting and should find support in the $53-52 zone. Wait for a bounce and keep an eye on the 50-dma as a potential entry point. Our plan is to use small position sizes (1/2 to 1/4 our normal size).

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 28 at $ 55.43 *new entry
Change since picked:       - 1.29
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: 27.81 change: -0.28 stop: n/a

The bounce in CI failed again this time at the 50-dma. We are down to two weeks left before October options expire and need to see some big moves yet if we're going to be successful. More conservative traders may want to consider an early exit. I'm not suggesting new positions at this time.

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:       - 1.59
Earnings Date            11/05/09 (unconfirmed)
Average Daily Volume =        3.8 million  
Listed on September 08, 2009         


CLOSED BULLISH PLAYS

Anglogold Ashanti - AU - close: 38.73 change: -2.03 stop: 38.70

The combination of a widespread market sell-off and a bounce in the dollar sent gold lower and the drop in the gold miners was exaggerated even further. AU gapped open lower at $40.39 and broke down to new relative lows before the day was out. Shares hit our stop loss at $38.70. The November $45 call opened at $1.60 and closed at $1.15.

Chart:

Picked on September 30 at $ 40.39 /gap down entry
Change since picked:       - 1.69<-- stopped @ 38.70 (-4.1%)
Earnings Date            11/02/09 (unconfirmed)
Average Daily Volume =        3.8 million  
Listed on September 30, 2009         


Best Buy Inc. - BBY - close: 37.01 change: -0.51 stop: 36.45

BBY broke down under $37.00 and under its long-term trendline of support. You could argue the break isn't very clean and BBY could still rebound from here but I'm suggesting an early exit anyway. I'm putting it back on my watch list for a rebound over $39.00.

Chart:

Picked on September 21 at $ 38.45
Change since picked:       - 1.44 <-- early exit @ 37.01 (-3.7%)
Earnings Date            12/16/09 (unconfirmed)
Average Daily Volume =        8.7 million  
Listed on September 21, 2009         


Fomento Economico Mex. - FMX - close: 44.40 chg: +6.35 stop: 34.99

Target exceeded! News surfaced late this afternoon that FMX had been in merger talks with larger rivals SABMiller and Heineken in a deal worth nearly $9 billion. The stock has been quietly trading sideways near $37.00 most of the day. Then suddenly around 3:15 p.m. shares exploded higher and just a few minutes FMX had reached $45.73 before paring its gains.

Our first target to take profits was at $40.00. Our second target to take profits was at $42.50. This move has exceeded both of them.

Chart:

Picked on September 30 at $ 37.55
Change since picked:       + 6.85
Earnings Date            10/26/09 (unconfirmed)
Average Daily Volume =        1.0 million  
Listed on September 24, 2009         


Wells Fargo - WFC - close: 26.60 change: -1.58 stop: 27.25

Financial stocks got hammered on Thursday and WFC broke down through several layers of support. Shares lost 5.6% on the session and hit our stop at $27.25.

Chart:

Picked on September 22 at $ 29.39
Change since picked:       - 2.14 <-- stopped @ 27.25 (-7.2%)
Earnings Date            10/14/09 (unconfirmed)
Average Daily Volume =         42 million  
Listed on September 22, 2009