We're updating our stops on three candidates and closing a couple of plays due to expiration.


CALL Play Updates

Arch Cap Group - ACGL - close: 69.31 change: -1.37 stop: 67.95

Traders were locking in profits ahead of the weekend and ACGL gave up 1.9%. The stock paused near its 30 and 40-dma around the $69 level. Volume was above average on the decline, which is worrisome. Given the S&P 500's recent weakness we could be seeing a potential bearish double top here in ACGL. Short-term I think the key is the rising 50-dma near $68.50. If ACGL breaks down under the 50-dma then momentum will have turned in favor of the bears. I'm not suggesting new bullish positions at this time. Our target is the $74.00 level.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on  November 07 at $ 68.81
Change since picked:       + 0.50
Earnings Date            10/26/09 (confirmed)
Average Daily Volume =        444 thousand 
Listed on  November 07, 2009         


Deere & Co - DE - close: 50.83 change: -0.06 stop: 47.40 *new*

DE is still showing some relative strength. The stock resisted any serious profit taking and traders bought the dip near $49.80 this morning. Holding the $50.00 level on a closing basis is bullish. While DE still looks strong here I would be cautious about opening new positions given the weakness in the broader market. We're going to inch up our stop loss to $47.40.

Our first target is $54.90. Our second target is $59.00. Keep in mind that we'll plan to exit ahead of DE's earnings report later in the month. More aggressive traders willing to hold over DE's earnings report will want to consider January 2010 calls.

Suggested Options:
I was suggesting the December calls but I would hesitate to launch new positions given the market's recent weakness.

Annotated Chart:

Picked on  November 18 at $ 50.52 *gap open higher   
Change since picked:       + 0.31
Earnings Date            11/25/09 (unconfirmed)
Average Daily Volume =        6.2 million  
Listed on  November 09, 2009         


Deckers Outdoor - DECK - close: 95.72 change: +0.23 stop: 96.95

Thursday's decline definitely did some damage to the current up trend but I'm not willing to give up on DECK just yet. We're still sitting on the sidelines so it doesn't hurt us to wait. The plan is to use a trigger at $100.75 to buy calls. If triggered our first target is $107.50.

Suggested Options:
If DECK hits our trigger we want to use the December calls. I'm suggesting the Dec. $105 strike.

Annotated Chart:

Picked on  November xx at $ xx.xx <-- TRIGGER @ 100.75
Change since picked:       + 0.00
Earnings Date            02/25/10 (unconfirmed)
Average Daily Volume =        659 thousand
Listed on  November 16, 2009         


Gold ETF - GLD - close: 112.94 change: +0.64 stop: 106.75 *new*

Gold delivered a strong week in spite of a bounce in the U.S. dollar. The GLD hit new all-time highs and gained about 3% for the entire week. Gold futures actually hit new all-time highs near $1,150 an ounce. The commodity and this ETF are definitely short-term overbought and due for a correction but they can always get more overbought. I'm not suggesting new positions at this time. Please note our new stop loss at $106.75.

If you exited your November calls today you should have done well. The November $105 calls closed near $7.80. The newsletter's remaining position are the January $110 calls. Our second target to exit is $119.00. Our time frame is still several weeks.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on   October 06 at $102.28
Change since picked:       +10.66
                               /1st target hit @ 109.50 (+7.0%)
Earnings Date            00/00/00
Average Daily Volume =       14.2 million  
Listed on   October 06, 2009         


MSC Industrial Direct - MSM - close: 45.90 change: +0.10 stop: 44.49

Traders are buying the dip near $45.25. They did it on Thursday and Friday. The larger trend is up but I hesitate to launch new positions given the weakness in the S&P 500 index. Our first target is $49.75. Our second target is $52.50.

Suggested Options:
I was suggesting the December calls but I hesitate to launch new positions here.

Annotated Chart:

Picked on  November 17 at $ 46.62
Change since picked:       - 0.72
Earnings Date            01/07/10 (unconfirmed)
Average Daily Volume =        513 thousand 
Listed on  November 17, 2009         


Waters Corp - WAT - close: 59.04 change: -0.33 stop: 58.75

Shares of WAT, like most of the market, are now down four days in a row. The stock is nearing some short-term support but I'd focus on the 50-dma near $57.50 instead. I might consider buying calls on a bounce from the 50-dma but for now our only entry point is a trigger at $61.50 (a new high). If triggered our first target is $64.90. We'll cautiously set a secondary target at $67.45.

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

Annotated Chart:

Picked on  November xx at $ xx.xx <-- TRIGGER @ 61.50
Change since picked:       + 0.00
Earnings Date            01/27/10 (unconfirmed)
Average Daily Volume =        1.2 million  
Listed on  November 12, 2009         


PUT Play Updates

Green Mountain Coffee Roasters - GMCR - cls: 65.01 chg: -0.12 stop: 71.05

Friday delivered a very quiet session for a normally volatile GMCR. The stock was pinned to the $65.00 strike price for November expiration. Given last week's bearish breakdown I'm suggesting put options but readers may want to see a little more confirmation first. A new low under $63.30 could be used as a new entry point if you prefer to see more momentum. If options weren't so expensive you could try a strangle or a straddle since GMCR is sitting on the $65.00 level - this way you don't care what direction the stock goes.

Most of the clues are suggesting the next real move will be lower but this remains an aggressive, higher-risk trade. GMCR still has extremely high short interest. Our first target is $60.25. Our second target is $55.50.

Suggested Options:
I was suggesting the December puts. My preference was the Dec. $60s.

Annotated Chart:

Picked on  November 19 at $ 64.75
Change since picked:       + 0.26
Earnings Date            01/28/10 (unconfirmed)
Average Daily Volume =        1.5 million  
Listed on  November 18, 2009         


iShares Biotech - IBB - close: 77.61 change: -0.25 stop: 80.05

The IBB turned in a volatile Friday morning. Shares gapped open lower at $77.18 and quickly rallied only to fail at the $78.00 level. I'm still bearish and would still open put positions right here. The biotech stocks can be a volatile group so I'm suggesting small positions. Our target is near the November lows at $73.50.

Suggested Options:
I'm suggesting the December puts. My preference is for the $75 strike.

Annotated Chart:

Picked on  November 19 at $ 77.18 /gap down entry point
                             /originally listed at $77.86
Change since picked:       + 0.43
Earnings Date            --/--/--
Average Daily Volume =        4.9 million  
Listed on  November 19, 2009         


Northern Trust - NTRS - close: 47.24 change: -0.43 stop: 50.26 *new*

NTRS set new eight-month lows on Friday. The next level of support looks like it could be the March lows around $45.80. I am adjusting our first target to take profits to $45.85. I'm also adjusting our stop loss down to $50.26. I'm not suggesting new positions at this time. Our second target is $41.00. The Point & Figure chart is bearish and its target has fallen from $39 down to $35 in just the last few days.

Suggested Options:
I'm not suggesting new positions at this time.

Annotated Chart:

Picked on  November 12 at $ 49.18
Change since picked:       - 1.94 
Earnings Date            01/21/10 (unconfirmed)
Average Daily Volume =        3.0 million  
Listed on  November 12, 2009         


Research In Motion - RIMM - close: 59.72 change: +0.88 stop: 65.26

RIMM received another downgrade this week and yet shares managed to bounce on Friday. The stock rallied from the $58.00 level but struggled with round-number resistance at $60.00. This could just be an oversold bounce that happened to pin the stock near the $60.00 strike price for expiration. I'm still bearish on RIMM but if you're launching new positions now I'd tighten your stop loss.

Our first target is $55.25. Our second target is $50.50. RIMM can be a volatile stock so I'm suggesting smaller position sizes.

Suggested Options:
Previously I suggested the December puts with a preference for the $60 strike.

Annotated Chart:

Picked on  November 16 at $ 61.80
Change since picked:       - 2.08
Earnings Date            12/17/09 (unconfirmed)
Average Daily Volume =       18.9 million  
Listed on  November 12, 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.)

Ultra(Long)-S&P500 - SSO - close: 36.62 change: -0.23 stop: n/a

Stocks are still retreating from last Monday's highs and investors sentiment seems to be cracking. Traders are turning more cautious as they look toward year-end. This coming week could be volatile as volume will probably be light thanks to the Thanksgiving holiday. I'm not suggesting new positions.

The options suggested for this strangle were the December $40 calls (SUC-LN) and the December $34 puts (SOJ-XH). Our estimated cost was $1.70. We want to sell if either option hits $3.00 or higher.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on  November 11 at $ 37.08
Change since picked:       - 0.46
Earnings Date            --/--/--
Average Daily Volume =         32 million  
Listed on  November 11, 2009         


CLOSED BULLISH PLAYS

Canadian Nat. Res. - CNQ - close: 66.09 change: -0.93 stop: $64.95 *new*

Our original trade listed November calls so we had to close this play on Friday. The stock has pulled back toward short-term support near $65.00 but I'm not sure it will hold. CNQ should have stronger support near its rising 100-dma around $62.75.

Chart:

Picked on  November 09 at $ 67.74 *gap open higher entry
                          /original trigger was $66.05
Change since picked:       - 1.65 <-- exit early @ 66.09 (-2.4%)
Earnings Date            03/04/10 (unconfirmed)
Average Daily Volume =        2.8 million  
Listed on  November 07, 2009         


Chevron Corp. - CVX - close: 76.77 change: -0.57 stop: 76.75

Another day of strength for the dollar pushed oil lower and that prompted shares of CVX to gap down on Friday morning. Shares quickly hit our stop loss at $76.75 closing the play.

Chart:

Picked on  November 11 at $ 78.87 /gap higher entry point
Change since picked:       - 2.12 <-- stopped out @ 76.75 (-2.6%)
Earnings Date            01/28/10 (unconfirmed)
Average Daily Volume =       10.6 million  
Listed on  November 10, 2009         


Parker Hannifin - PH - close: 53.98 change: -0.33 stop: 53.40

PH almost hit our stop loss on Friday morning. The stock gapped open lower at $53.41. That proved to be the low of the day. Our stop was $53.40. Our plan was to exit on Friday at the closing bell since our original trade suggested November calls. Even if we didn't have plans to exit I'd probably suggest an early exit now since PH has now closed under technical support at its 50-dma with Friday's decline.

Annotated Chart:

Picked on  November 03 at $ 55.25 (small positions)
Change since picked:       - 1.27 <-- exit @ 53.98 (-2.2%)
Earnings Date            01/20/09 (unconfirmed)
Average Daily Volume =        1.6 million  
Listed on  November 03, 2009