Investor focus is going to move from economic data to corporate earnings. We need to improving results or the rally could stall.


CALL Play Updates

Apple Inc. - AAPL - close: 190.47 change: +1.20 stop: 184.75

AAPL is up about $5 on the week but shares have been trading sideways for about three days now. I would still consider new positions here but we might get a better entry point on a dip near $186-185.

Our first target to take profits (I'd exit 2/3rds of our position) is at $199.50. We will cautiously set a secondary target at $210. The P&F chart is currently forecasting a $231 target.

Suggested Options:
We will exit ahead of the October 19th earnings report. October options expire after Friday October 16th. Aggressive traders could play the October calls and I'd use the $190 strike. The rest of us will want to consider November calls and I'd use the $200 strike.

Annotated Chart:

Picked on   October 06 at $190.01
Change since picked:       + 0.46
Earnings Date            10/19/09 (confirmed)
Average Daily Volume =       17.8 million  
Listed on   October 06, 2009         


Alcon Inc. - ACL - close: 142.20 change: +1.58 stop: 134.75 *new*

ACL eventually rejoined the rally and shares are back above the $140 mark. The recent low was $134.78 so I'm raising our stop loss to $134.75. Volume has been fading a bit on the rise. Readers may want to look for a dip near $138 soon. ACL has already hit our first target. Our second target is $148.00.

Suggested Options:
If ACL produces another bounce in the $136-138 zone I'd be tempted to buy November calls. Just remember our plan to exit ahead of the late October earnings report.

Annotated Chart:

Picked on September 10 at $136.75
Change since picked:       + 5.45
                             /1st target hit @ 142.50 (+4.2%)
Earnings Date            10/27/09 (unconfirmed)
Average Daily Volume =        299 thousand 
Listed on September 10, 2009         


Amazon.com - AMZN - close: 95.71 change: +0.49 stop: 89.49 *new*

AMZN slipped to $94.26 on Friday morning but traders quickly bought the dip. I would still consider new bullish plays right here but patient traders may want to consider waiting for a dip near $93.00, above the 10-dma, as a new entry point. Please note our new stop loss at $89.49.

Our first target to take profits is at $99.90. Our second target would be $104.95. I'd aim higher but we want to exit in front of the late October earnings report.

FYI: Shares of AMZN didn't seem to react much that rival Barnes & Noble was planning to introduce a competitor to AMZN's e-book Kindle product.

Suggested Options:
I'm suggesting the November calls. My preference is the $100 strike.

Annotated Chart:

Picked on   October 08 at $ 95.05
Change since picked:       + 0.66
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        6.2 million  
Listed on   October 07, 2009         


Allegheny Tech. - ATI - close: 36.14 change: +0.09 stop: 33.75 *new*

ATI finally looks ready to breakout past its September highs. However, we're almost out of time. The newsletter will exit on or before Friday, October 16th to avoid having our October options expire. Speaking of exits I'm adjusting our second and final target from $37.00 to $38.50. More conservative traders may want to keep your target at $37.00 or the September high near $36.90. I'm also adjusting our stop loss to $33.75.

Even though we're planning to close this play ATI looks ready to breakout again. Readers looking for a new entry point could buy calls now or wait for a move over $37.00. Just adjust your stops and targets for your new entry. The $40.00 and $44.00 levels look like potential resistance. Don't forget to exit ahead of earnings.

Suggested Options:
Officially I'm not suggesting new positions given our remaining time (five days) but ATI still looks poised to rally and readers may want to buy November calls.

Annotated Chart:

Picked on   August 31 at $ 30.25 *triggered         
Change since picked:      + 5.89 
                               /1st target hit @ 33.85 (+11.9%)
Earnings Date           10/21/09 (confirmed)
Average Daily Volume =       2.7 million  
Listed on August 27, 2009         


AvalonBay - AVB - close: 73.56 change: +0.29 stop: 68.49

AVB is showing strength. While I would still consider bullish positions now a better entry point would be a dip in the $72-70 zone. Our first target is $77.75. More aggressive traders could aim higher but we don't want to hold over the early November earnings report.

Suggested Options:
I'm suggesting the November calls. My preference was the $75 strike.

Annotated Chart:

Picked on   October 08 at $ 72.60
Change since picked:       + 0.94
Earnings Date            11/04/09 (unconfirmed)
Average Daily Volume =        1.8 million  
Listed on   October 07, 2009         


Caterpillar - CAT - close: 53.64 change: +0.55 stop: 48.59 *new*

CAT was a strong performer last week and shares are nearing potential resistance in the $54.50 zone. I am raising our stop loss to $48.59, just under the 50-dma.

If you are looking for a new entry point wait for another bounce near $50.00.

Our first target is $54.25. Our second target is $59.00 but that may be too optimistic as we plan to exit ahead of the October 20th earnings report. If you bought October options you need to exit before they expire after Friday, October 16th. FYI: The P&F chart is bullish with an $85 target.

Suggested Options:
If CAT provides a new entry point I'd use the November calls.

Annotated Chart:

Picked on   October 01 at $ 50.00
Change since picked:       + 3.64
Earnings Date            10/20/09 (confirmed)
Average Daily Volume =         10 million  
Listed on September 19, 2009         


Core Labs - CLB - close: 104.92 change: -1.08 stop: 97.95

CLB broke out to new 2009 highs last week. This pull back toward $104.00, which as previous resistance should be new support, looks like a new entry point to buy calls. If the market does dip this week then CLB should have extra support at $102.

Our first target to take profit is at $109.90. Our second target is $114.50.

Suggested Options:
I'm suggesting the November calls. My preference is the $110 strike.

Annotated Chart:

Entered on  October 08 at $105.25
Change since picked:       - 0.32
Earnings Date            10/21/09 (confirmed)
Average Daily Volume =        175 thousand 
Listed on September 23, 2009         


Canadian Nat. Res. - CNQ - close: 69.95 change: +0.48 stop: 61.90

CNQ is testing round-number resistance near $70.00. Don't be surprised to see a dip back toward the $68 or $66 levels, which we can use as a new entry point to buy calls. More conservative traders may want to raise their stops a bit.

Currently our first target is $71.50 and I'd exit at least half if not 75% of our position there. I'm setting a secondary target at $74.75.

Suggested Options:
If CNQ provides a new entry point I would use the November calls. My preference was the $70 strike.

Annotated Chart:

Picked on   October 05 at $ 67.01 /gap higher entry
                                /originally listed at $65.04
Change since picked:       + 2.94
Earnings Date            11/05/09 (confirmed)
Average Daily Volume =        6.4 million  
Listed on   October 05, 2009         


Consol Energy - CNX - close: 49.15 change: -0.36 stop: 43.90

CNX has rallied toward its September highs and round-number resistance at $50.00. This would be a good spot to expect a pull back. Watch for support near $46.00 or $44.00.

CNX has already hit our first target at $48.50. Our second and final target is $54.50. We'll plan to exit ahead of the late October earnings report.

Suggested Options:
If CNX provides a new entry point I would use the November calls.

Annotated Chart:

Picked on September 25 at $ 43.77 /gap down entry
Change since picked:       + 5.38
                                /1st target hit @ 48.50 (+10.8%)
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        3.0 million  
Listed on September 19, 2009         


Capella Education - CPLA - close: 71.08 change: +1.26 stop: 62.90

Wow! CPLA just refuses to correct. Nothing goes straight up forever and we don't want to chase it. Currently the plan is to buy calls on a dip at $65.75. More aggressive traders may want to raise their trigger.

If triggered our first target is $69.90. 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.

Suggested Options:
The plan is to use November calls. My preference is the $65 strike.

Annotated Chart:

Picked on   October xx at $ xx.xx <-- TRIGGER $65.75
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: 67.84 change: +1.28 stop: 63.95

After under performing for days it seems that DHR has decided to join the party. The stock rose 1.9% on Friday and broke out above the three-week trend of lower highs. Unfortunately we're running out of time and will need to exit before October options expire this Friday.

If we see another dip or bounce near $66.00 we can re-load this play with some November options but we will still plan to exit ahead of the October 22nd earnings report.

Our first target is $69.50. The $70.00 level looks like significant resistance but we're going to set a secondary target at $72.50. 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.

Suggested Options:
If DHR provides another entry point I'd use the November calls.

Annotated Chart:

Picked on September 05 at $ 66.37 (buy 1/2 position)
               /originally listed at $65.76, gap higher entry @ 66.37
Change since picked:       + 0.19
Earnings Date            10/22/09 (confirmed)
Average Daily Volume =        2.4 million  
Listed on September 05, 2009         


Diamond Offshore - DO - close: 100.11 change: -0.61 stop: 91.95

DO hit new 2009 highs and our first target last week. There should be nothing to stop DO from aiming for the $110 level but if the market dips look for short-term support in the $97-95 zone. We have just less than two weeks before DO reports earnings but October options expire this coming Friday. Your next exit will depend on what options you hold. The newsletter will plan to exit before Friday's closing bell.

Nimble traders looking for a new entry point could look for a dip near $97.00. More conservative traders may want to consider a stop closer to $94.

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

Suggested Options:
If you're launching new positions I'd use the November calls but I would not hold over the October earnings announcement.

Annotated Chart:

Picked on September 15 at $ 94.69 *adjusted entry point
Change since picked:       + 5.42
                               /1st target hit @ 99.90 (+5.5%)
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        1.8 million  
Listed on September 12, 2009         


Dril-Quip, Inc. - DRQ - close: 52.60 change: -0.61 stop: 46.95

DRQ closed the week with impressive gains and at new one-year highs. I would wait for a dip back toward the $50 or $48 levels before considering new positions.

DRQ has already hit our first target at $53.00. Our second target is $57.50. The Point & Figure chart is bullish with a $65.00 target.

Suggested Options:
I suggested the November calls.

Annotated Chart:

Picked on September 28 at $ 48.50
Change since picked:       + 4.10
                              /1st target hit @ 53.00 (+9.2%)
Earnings Date            11/10/09 (unconfirmed)
Average Daily Volume =        282 thousand 
Listed on September 26, 2009         


EOG Resources - EOG - close: 89.60 change: -0.09 stop: 82.49

EOG looks short-term overbought with a $10 rally in the last week. I would look for a dip back toward what should be new support near $85.00.

EOG has exceeded our first target at $89.90. Our second target is $94.75. We actually have a third target a $99.50.

Suggested Options:
If EOG provides a new entry point I'd use the November calls.

Annotated Chart:

Picked on   October 07 at $ 85.24 /gap higher entry
                               /originally listed at $84.71
Change since picked:       + 4.45
                              /1st target hit @ 89.90 (+5.4%)
Earnings Date            11/03/09 (unconfirmed)
Average Daily Volume =        2.9 million  
Listed on   October 07, 2009         


Express Scripts - ESRX - close: 79.44 change: +1.24 stop: 74.90

ESRX has rallied to resistance near $80.00. We can probably expect a dip back toward $78-77 before shares move much higher. Use a dip as a new entry point. Our first target is $82.50. Our second target is $84.95.

Suggested Options:
I am suggesting the November calls. Our preferred strike was the $80s.

Annotated Chart:

Picked on   October 06 at $ 77.42 /gap down entry
                              /originally listed at $78.04
Change since picked:       + 2.02
Earnings Date            10/28/09 (confirmed)
Average Daily Volume =        2.1 million  
Listed on   October 06, 2009         


Flowserve - FLS - close: 100.77 change: +0.29 stop: 95.90

Instead of looking for a dip we're not looking for a breakout. The plan is to open small positions if FLS trades at $102.60 or higher. If triggered at $102.60 we'll use a stop loss at $95.90. I am suggesting the November calls but my preference is for the Nov 105 calls (FLS-KA). Our first target will be $109.75.

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

Suggested Options:
I'm suggesting the November calls.

Annotated Chart:

Picked on September xx at $ xx.xx <-- TRIGGER @ 102.60
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: 66.16 change: +0.88 stop: 61.75

GD continues to march away from us. I'm raising our trigger to buy calls to $64.25. We'll raise the stop loss to $61.75. If triggered our first target is $69.90. We will plan to exit ahead of the late October earnings report.

Suggested Options:
I'm suggesting the November calls. My preference is the $65 strike.

Annotated Chart:

Picked on September xx at $ xx.xx <-- TRIGGER @ 64.25
Change since picked:       + 0.00
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        2.3 million  
Listed on September 09, 2009         


Gold ETF - GLD - close: 102.84 change: -0.80 stop: 97.40

Ben Bernanke's comments on Thursday night gave the dollar a boost and sparked a little profit taking in gold. The GLD gave up 0.77%. If we can get a dip near $100.00 I'd jump on it as a new entry point to buy calls. Our plan calls for small positions to limit risk.

I'm hearing more analysts call for a rally to $1,300 in gold. This lines up with what I said last week. The weekly chart has an inverse head-and-shoulders pattern that is forecasting a huge upward target around $130ish (for the GLD, or $1,300 for gold) but that could take several months to be achieved. Our shorter-term (several weeks) target is a rally to $109.90. We are still contemplating a second target.

Suggested Options:
If GLD provides a new entry point I suggested the November or January calls.

Annotated Chart:

Picked on   October 06 at $102.28
Change since picked:       + 0.55
Earnings Date            00/00/00
Average Daily Volume =       14.2 million  
Listed on   October 06, 2009         


Illumina Inc. - ILMN - close: 43.09 change: +0.87 stop: 37.75

Momentum in ILMN is fading and I'm still expecting a dip back toward prior resistance and what should be support near $40.00. The plan is to buy calls at $40.10. Our biggest challenge right now is timing. We have just over a week before ILMN reports earnings and we don't want to hold over the announcement.

If we are triggered at $40.10 our first target is $44.00. We plan to exit before the October earnings report.

Suggested Options:
If triggered we want to use the November calls.

Annotated Chart:

Picked on September xx at $ xx.xx <-- TRIGGER @ 40.10
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: 53.72 change: +0.49 stop: 49.49

The banking stocks are on the rise again. This week we could see an acceleration or a reversal thanks to third quarter earnings. There are several high-profile reports with JPM on Wednesday, GS on Thursday, and BAC on Friday. Results or management comments from any of these companies could have a major impact on the financials.

I suspect the IYF will see a lot more volatility this week. If you're looking for a new entry point consider dips or bounces from $52.00. Our first target is $57.00. Our second target is $60.00.

Suggested Options:
I would use the November calls.

Annotated Chart:

Picked on September 15 at $ 52.60 *triggered  
Change since picked:       + 1.12
Earnings Date            00/00/00
Average Daily Volume =        5.1 million  
Listed on September 01, 2009         


PPG Inds. Inc. - PPG - close: 59.75 change: +0.53 stop: 55.95 *new*

PPG is bouncing back toward its 2009 highs and resistance near $60.50. We only have three days left before PPG reports earnings. The company announces on October 15th before the opening bell. We will plan to close this play on Oct. 14th at the close. I'm raising our stop loss to $55.95. If PPG reverses again under $60.50 we'll want to exit early.

PPG has already exceeded our first target and we're currently aiming for $63.00.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on   August 28 at $ 55.65
Change since picked:      + 4.10
                             /1st target exceeded @ 60.05 (7.9%)
Earnings Date           10/15/09 (confirmed)
Average Daily Volume =       1.6 million  
Listed on August 27, 2009         


Waters Corp. - WAT - close: 57.75 change: +0.53 stop: 53.25

WAT spent another session trading sideways under $58.00. I would expect another dip toward $56.00, which should offer some short-term support. The plan is to use small position sizes (1/2 to 1/4 our normal size) to minimize risk.

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

Suggested Options:
We're quickly running out of time with WAT. I would hesitate to open new positions.

Annotated Chart:

Picked on September 28 at $ 55.43 *new entry
Change since picked:       + 2.32
Earnings Date            10/20/09 (unconfirmed)
Average Daily Volume =        809 thousand 
Listed on September 12, 2009         


PUT Play Updates

BIOGEN IDEC - BIIB - close: 49.01 change: +0.41 stop: 52.15

It's tough to be bearish with the market hitting new highs for the year. The overall trend in BIIB continues to look bearish but traders may want to limit their position sizes given the positive market environment.

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.

Suggested Options:
I suggested the November puts.

Annotated Chart:

Picked on   October 03 at $ 48.89
Change since picked:       + 0.12
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: 29.52 change: +1.19 stop: n/a

Sadly I think our CI strangle play is doomed. The sector has been volatile but it's not going anywhere up one day down the next. While I expect the health reform debate to heat up again we're running out of time. (Traders may want to reconsider this trading idea with December or January options.)

October options expire in five days. I'm adjusting our exit to $0.75 hoping to recoup some of our capital.

The options I suggested were the October $35 calls (CI-JG) and the October $25 puts (CI-VE). Our estimated cost was $1.20.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on September 08 at $ 29.40
Change since picked:       + 0.12
Earnings Date            11/05/09 (unconfirmed)
Average Daily Volume =        3.8 million  
Listed on September 08, 2009         


CLOSED BULLISH PLAYS

SOHU.com Inc. - SOHU - close: 64.51 change: -1.85 stop: 63.75

What happened to SOHU? The bounce was just starting to look good. Then shares produced a little bearish reversal on Thursday. Friday's session saw follow through on the reversal and SOHU broke down under several layers of support in the $65-64 region.

I couldn't find any news to account for the relative weakness. I don't see any similar weakness in the other major Chinese stocks. Our play was closed when SOHU hit our stop at $63.75 on Friday.

Chart:

Picked on   October 01 at $ 68.24 /gap open entry
                                 (small positions 1/2 to 1/4)
Change since picked:       - 4.49<-- stopped @ 63.75 (-6.5%)
Earnings Date            10/26/09 (unconfirmed)
Average Daily Volume =        577 thousand 
Listed on September 15, 2009