CALL Play Updates

AvalonBay - AVB - close: 72.74 change: -0.54 stop: 71.90

AVB is still trading sideways but ended up losing 0.7% on the session. Tomorrow is our last day and we plan to exit at the closing bell to avoid earnings. Our upside target is $77.00.

Picked on   October 08 at $ 72.60
Change since picked:       + 0.14
Earnings Date            10/28/09 (confirmed)
Average Daily Volume =        1.8 million  
Listed on   October 07, 2009         


Ultra Oil & Gas ProShares - DIG - close: 36.43 change: +0.67 stop 31.95

Crude oil managed a bounce and the OIX closed in positive territory. Shares of DIG rose 1.8%. Our plan is to buy calls on a dip at $34.20. If triggered at $34.20 our first target is $39.50. Our second target is $43.50.

FYI: The DIG is an ultra-long ETF so it should have twice the volatility as a normal sector ETF.

Picked on   October xx at $ xx.xx <--  TRIGGER @ 34.20
Change since picked:       + 0.00
Earnings Date            00/00/00
Average Daily Volume =        4.3 million  
Listed on   October 17, 2009         


Gold ETF - GLD - close: 101.85 change: -0.01 stop: 97.40

I heard one analyst suggesting traders sell gold on the dollar's new strength. That seems a little premature. The dollar is producing an oversold bounce. The trend is still down for the dollar. We've been expecting a pull back toward $100 anyway. The low today was only $101.22. I would wait for a dip or a bounce closer to the $100.00 mark before initiating new positions.

I would only buy January 2010 or longer-dated options as the GLD doesn't move very fast. Our first target is $109.90. We are still contemplating a second, longer-term target.

Picked on   October 06 at $102.28
Change since picked:       - 0.43
Earnings Date            00/00/00
Average Daily Volume =       14.2 million  
Listed on   October 06, 2009         


UltraShort Treasury ETF - TBT - close: 46.50 change: -1.39 stop: 44.40

Bonds rallied as investors moved money into "safer" investments. The TBT pulled back 2.9%. That's okay. The plan was to open the second half of our play on a dip at $45.50.

Our first target is $54.50. Our second target is $58.50. Our time frame is several weeks (possibly year end).

Note: This same trade in reverse is puts on the TLT. The TLT will go down as yields rise.

Picked on   October 26 at $ 47.89 (1/2 position)
Change since picked:       - 1.39
Earnings Date            --/--/--
Average Daily Volume =        6.0 million  
Listed on   October 26, 2009         


Volatility Index - VIX - close 24.83 change: +0.52 stop: 19.49

The VIX rose another 2.1%. Investors are growing nervous and if the S&P breaks down under its trendline of support the VIX could go skyrocketing higher.

Our first target to take profits is at $27.25. Our second target is $29.25. I consider this an aggressive trade and suggest readers use small positions.

We want to use the December calls. These are European style options and are settled for cash. The December options expire on Wednesday, December 16th, 2009.

Picked on   October 24 at $ 23.06 /gap open entry
                            /originally listed at $22.27
Change since picked:       + 1.77
Earnings Date            --/--/--
Average Daily Volume =         -- million  
Listed on   October 24, 2009         


PUT Play Updates

BIOGEN IDEC - BIIB - close: 44.55 change: +0.42 stop: 48.55

The oversold bounce in BIIB continues. The stock gained 0.9%. I'm not suggesting new positions at this time. BIIB has already surpassed our first target at $44.50. Our second and final target is $40.50.

Picked on   October 03 at $ 48.89
Change since picked:       - 4.34
                               /1st target hit @ 44.50 (-8.9%)
Earnings Date            10/20/09 (confirmed)
Average Daily Volume =        2.6 million  
Listed on   October 03, 2009         


DST Systems - DST - close: 43.44 change: -0.26 stop: 45.25

DST is slowly sinking. I would expect a short-term bounce when the stock nears its rising 100-dma (around 42.50). Our target to exit is $40.25.

Picked on   October 24 at $ 43.73
Change since picked:       - 0.29
Earnings Date            10/21/09 (confirmed)
Average Daily Volume =        462 thousand 
Listed on   October 24, 2009         


FUQI Intl. - FUQI - close: 21.82 change: -3.46 stop: 26.15 *new*

Well that was convenient. I wasn't expecting FUQI to move this fast. The stock broke support at $25.00 and hit our trigger to buy puts at $24.75. Shares closed the session down 13.6%. I don't see any company-specific news to account for the relative weakness. We can probably blame the sharp sell-off in Chinese stocks today. More conservative traders may want to go ahead and take profits right now. The option has more than doubled just today alone.

I am not suggesting new positions at this time. I am lowering our stop to $26.15. Our target is $20.50. We will plan to exit ahead of the mid November earnings report so our time frame is less than three weeks. This is an aggressive trade on a volatile stock. I was suggesting small positions.

I want to repeat that this is an aggressive, higher-risk trade. The most recent data lists short interest at 27% of the small 27 million-share float. That's a big recipe for a short squeeze (which probably fueled the rally to begin with).

Chart:

Picked on   October 27 at $ 24.75
Change since picked:       - 2.93
Earnings Date            11/12/09 (unconfirmed)
Average Daily Volume =        1.3 million  
Listed on   October 26, 2009         


iShares Transports - IYT - close: 66.57 chg: -1.22 stop: 73.20

The IYT has broken its trendline of support from the March lows but it's nearing potential support at its October lows. I wouldn't be surprised to see an oversold bounce soon. A failed rally near $70.00 can be used as a new entry point.

The plan was to buy half a position now and open the second half if we see a bounce to $70.50. Our first target to take profits is $65.25 as the 100-dma could be technical support. Our second and final target is $62.00.

Picked on   October 24 at $ 68.29
Change since picked:       - 1.72
Earnings Date            --/--/--
Average Daily Volume =        664 thousand 
Listed on   October 24, 2009         


Netease.com - NTES - close: 35.71 change: -1.71 stop: 40.15 *new*

NTES has set new relative lows and is very close to our first target and potential support near $35.00. Please note our new stop loss at $40.15. I'm not suggesting new positions at these levels. More conservative traders may want to start taking profits now.

Our first target is $35.25. Our second target is $33.00, just above the exponential 200-dma. We want to exit ahead of the mid November earnings report. FYI: The P&F chart is bearish with a $25 target.

Picked on   October 17 at $ 38.47
Change since picked:       - 2.76
Earnings Date            11/12/09 (unconfirmed)
Average Daily Volume =        2.7 million  
Listed on   October 17, 2009         


Psychiatric Solutions - PSYS - close: 24.14 change: +0.51 stop: 28.05

PSYS produced a little oversold bounce after yesterday's decline. A rebound or failed rally near $26.00 could be used as a new bearish entry point.

Readers should consider this an aggressive, higher-risk trade. Use small positions about 1/2 to 1/4 your normal size.

Normally we want to avoid holding over earnings. This time we will hold over PSYS's earnings report, due out on Tuesday, October 27th after the market's closing bell. Wall Street is looking for a profit of 56 cents a share. However, traders should note that PSYS already warned for the third quarter back on September 30th so there is a chance that the company could beat these lowered estimates.

UPDATE: Good news! PSYS missed estimates by 6 cents. The company missed the revenue estimates as well. Management has lowered their 2009 earnings guidance. The stock is trading lower after hours, currently around $21.00 a share.

The most recent data lists short interest at more than 11% of the 55.4 million-share float. That's above average short interest and does raise the risk of a short squeeze, which is another reason we want to keep our positions small.

Our first target to take profits is at $22.55. Our second target is $20.25.

Picked on   October 24 at $ 24.97
Change since picked:       - 0.83
Earnings Date            10/27/09 (confirmed)
Average Daily Volume =        662 thousand 
Listed on   October 24, 2009         


CLOSED BULLISH PLAYS

Flowserve - FLS - close: 103.53 change: -0.56 stop: 102.90

Yesterday we raised our stop loss and this morning's dip was enough to hit the new stop at $102.90 closing our play. FLS is due to report earnings tomorrow night.

Chart:

Picked on   October 12 at $102.60
Change since picked:       + 0.30 <- stopped @ 102.90 (+0.0%)
                           /sell half @ 105.15
Earnings Date            10/28/09 (confirmed)
Average Daily Volume =        1.2 million  
Listed on September 19, 2009         


Intercontinental Exchange - ICE - close: 103.25 chg: -1.29 stop: 94.90

It's been ten days since we added ICE to the play list. Shares are just now starting to correct. I'm concerned that we won't have enough time for our play to work out. ICE is due to report earnings on November 3rd and we don't want to hold over the report. Therefore I'm removing ICE from the play list (for now). More nimble traders may want to stick to our plan and buy calls on a dip or a bounce near $100.

Chart:

Picked on   October xx at $ xx.xx <-- TRIGGER @ $100.25
Change since picked:       + 0.00             *never opened*
Earnings Date            11/03/09 (confirmed)
Average Daily Volume =        1.3 million  
Listed on   October 17, 2009