Most of our play list saw an oversold bounce from two-week lows. Our bearish plays continued to sink.


CALL Play Updates

Alcon Inc. - ACL - close: 136.23 change: -0.05 stop: 133.90

Traders should remain cautious on ACL. The stock under performed the market on Monday but is still holding up its bullish trend.

I wouldn't be surprised to see ACL retest the $134 area again. We can use a bounce in this zone as a new bullish entry point but keep a wary eye on the $140 level, which could act as resistance again. ACL has already hit our first target. Our second target is $148.00.

Picked on September 10 at $136.75
Change since picked:       - 0.52
                             /1st target hit @ 142.50 (+4.2%)
Earnings Date            10/27/09 (unconfirmed)
Average Daily Volume =        299 thousand 
Listed on September 10, 2009         


Allegheny Tech. - ATI - close: 34.63 change: +0.96 stop: 31.70

Material-related names performed well. ATI gained 2.8%. 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:      + 4.38 
                               /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: 50.75 change: +1.92 stop: 47.49

CAT performed very well with a 3.9% gain. The company announced they would raise their prices in 2010. If CAT is feeling confident enough to raise prices then business must be improving. The stock has now produced a three-day bullish reversal pattern. I would use this bounce as a new entry point to buy calls.

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   October 01 at $ 50.00
Change since picked:       + 0.75
Earnings Date            10/20/09 (unconfirmed)
Average Daily Volume =         10 million  
Listed on September 19, 2009         


Core Labs - CLB - close: 101.39 change: +2.08 stop: 93.90

A drop in the dollar fueled a bounce in oil and the oil service stocks followed. CLB gained 2% but we still don't want to chase it. The plan is to buy calls on a dip at $96.00. 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            10/21/09 (unconfirmed)
Average Daily Volume =        175 thousand 
Listed on September 23, 2009         


Compass Minerals - CMP - close: 60.18 chg: +0.93 stop: 56.40

CMP is bouncing but volume has been low on the rebound. I'm not suggesting new bullish 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:       + 4.63
                               /1st target hit @ 59.75 (+7.5%)
Earnings Date            10/27/09 (unconfirmed)
Average Daily Volume =        415 thousand 
Listed on September 02, 2009         


Consol Energy - CNX - close: 45.52 change: +2.48 stop: 39.45

Coal stocks were included in the commodity rally today. CNX soared 5.7% and back above round-number resistance at $45 and technical resistance at its 10-dma.

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:       + 1.75
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        3.0 million  
Listed on September 19, 2009         


Capella Education - CPLA - close: 68.48 change: +0.68 stop: 62.40

CPLA is still showing relative strength and hit new highs today. I am suggesting readers buy calls on a dip at $65.25. If triggered our first target is $69.75. Our secondary target is $74.00 but we'll exit ahead of the late October earnings report. FYI: The Point & Figure chart is bullish with an $82 target.

Trading note: CPLA doesn't have a lot of volume and neither do the options. I would keep positions small.

Picked on   October xx at $ xx.xx <-- TRIGGER $65.25
Change since picked:       + 0.00
Earnings Date            10/27/09 (unconfirmed)
Average Daily Volume =        145 thousand 
Listed on   October 03, 2009         


Danaher Corp. - DHR - close: 65.04 change: +0.30 stop: 63.95

The bounce in DHR was somewhat muted. Shares failed at the 30-dma this afternoon. I remain cautious and would look for another dip near $64.00.

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:       - 1.33
Earnings Date            10/22/09 (confirmed)
Average Daily Volume =        2.4 million  
Listed on September 05, 2009         


Diamond Offshore - DO - close: 94.17 change: +1.72 stop: 89.75

Investors continue to buy DO on dips near the long-term rising trendline of support. Shares gained 1.8% on Monday. This bounce looks like another entry point to buy calls.

Our first target is $99.90. Our second target is $104.50. More aggressive traders can aim for $110. The P&F chart is forecasting a $114 target. The plan was to use small position sizes.

Picked on September 15 at $ 94.69 *adjusted entry point
Change since picked:       - 0.52
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        1.8 million  
Listed on September 12, 2009         


Dril-Quip, Inc. - DRQ - close: 49.54 change: +1.23 stop: 45.90

Traders were quick to buy the dip in DRQ and the stock is back to challenging resistance near $50 again.

More conservative traders may want to raise their stops toward $47.00.

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:       + 1.04
Earnings Date            11/10/09 (unconfirmed)
Average Daily Volume =        282 thousand 
Listed on September 26, 2009         


Flowserve - FLS - close: 99.29 change: +4.09 stop: 89.40

FLS displayed relative strength with a big bounce (+4.2%) on Monday. Shares are back above what should have been resistance at $96.00 and they're nearing round-number resistance at $100.

We want to buy calls at $91.00 but readers could wait for a bounce from $90.00 instead. The 50-dma is at $89.70 so I'm raising our stop loss to $89.40. Our first target is $99.50.

We will plan to exit ahead of the late October earnings report.

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: 64.77 change: +1.69 stop: 56.95

There is no change from my prior comments. GD still looks a little overbought. We want to buy calls on a dip at $58.50.

Our first target is $64.50.

Picked on September xx at $ xx.xx <-- TRIGGER @ 58.50
Change since picked:       + 0.00
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        2.3 million  
Listed on September 09, 2009         


Illumina Inc. - ILMN - close: 42.91 change: +0.89 stop: 37.45

ILMN continues to show relative strength. Today's gain should negate last Thursday's bearish reversal pattern. We might want to consider raising our trigger to buy calls from $39.10 to $40.10.

If we are triggered at $39.10 our first target is $42.40. We plan to exit before the October earnings report.

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: 51.97 change: +1.40 stop: 49.49

Goldman Sachs issued some positive comments on big banks and the whole financial sector rallied. The IYF gained 2.7%. This looks like the convincing bounce I was talking about over the weekend. Our first target is $57.00. Our second target is $60.00.

Picked on September 15 at $ 52.60 *triggered  
Change since picked:       - 0.63
Earnings Date            00/00/00
Average Daily Volume =        5.1 million  
Listed on September 01, 2009         


PPG Inds. Inc. - PPG - close: 57.54 change: +1.28 stop: 54.95

Nimble traders may want to buy calls on this bounce. I'm still a little concerned by the short-term trend of lower highs. A move over $58.50 should correct that concern. PPG has already exceeded our first target and we're currently aiming for $63.00.

Picked on   August 28 at $ 55.65
Change since picked:      + 1.89
                             /1st target exceeded @ 60.05 (7.9%)
Earnings Date           10/15/09 (confirmed)
Average Daily Volume =       1.6 million  
Listed on August 27, 2009         


SOHU.com Inc. - SOHU - close: 65.45 change: +0.82 stop: 63.75

The oversold bounce in SOHU didn't make it very far. The stock stalled at its highs from last Friday. I'm still bullish on SOHU but readers may want to wait for a new move over $68.50 before launching positions.

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:       - 2.79
Earnings Date            10/26/09 (unconfirmed)
Average Daily Volume =        577 thousand 
Listed on September 15, 2009         


Waters Corp. - WAT - close: 55.48 change: +1.58 stop: 51.90

I was expecting a dip closer to $53.00 but today's rebound has helped create a three-day bullish reversal signal. I'd buy calls now or on a new move over $56.25. Our plan is to use small position sizes (1/2 to 1/4 our normal size).

Our first target is $59.50. We do not want to hold over the mid October earnings report.

Picked on September 28 at $ 55.43 *new entry
Change since picked:       + 0.05
Earnings Date            10/20/09 (unconfirmed)
Average Daily Volume =        809 thousand 
Listed on September 12, 2009         


PUT Play Updates

Amazon.com - AMZN - close: 88.657chg: -1.18 stop: 92.55 *new*

I'm happy to see the decline in AMZN but I'm puzzled by it. Yes, the pattern looks bearish but with the NASDAQ up almost 1% I'm surprised to see AMZN down 1.3%. AMZN is one of the "generals" for the technology sector. If AMZN stumbles it makes it harder for the rest of the tech sector to rally. I'm inching our stop loss down to $92.55. We'll exit on a dip at $85.25.

Picked on   October 03 at $ 89.85
Change since picked:       + 0.00
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        6.2 million  
Listed on   October 03, 2009         


BIOGEN IDEC - BIIB - close: 48.54 change: -0.35 stop: 52.15

BIIB is another bearish candidate showing relative weakness, which is exactly what we want to see.

Don't forget - this is a higher-risk play because we're choosing to hold over the earnings report!

Our first target to take profits is at $44.50. Our second target is $40.50. FYI: The P&F chart is bearish with a $36 target.

Picked on   October 03 at $ 48.89
Change since picked:       - 0.35
Earnings Date            10/15/09 (unconfirmed)
Average Daily Volume =        2.6 million  
Listed on   October 03, 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.)

Cigna Corp. - CI - close: 28.70 change: +0.88 stop: n/a

CI is seeing an oversold bounce and shares gained 3.1%. 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:       - 0.70
Earnings Date            11/05/09 (unconfirmed)
Average Daily Volume =        3.8 million  
Listed on September 08, 2009