Editor's Note:

It comes as no surprise to see the stock market quietly trading sideways ahead of the Thanksgiving holiday here in the U.S. This trend could continue on Friday but the day after Thanksgiving has always been something of a wildcard (although it tends to be bullish more often than not). We did not see a lot of movement in our current trading candidates.


CALL Play Updates

Arch Cap Group - ACGL - close: 69.95 change: -0.01 stop: 67.95

ACGL delivered a very quiet session with a sideways consolidation near $70.00. I'm not suggesting new bullish positions at this time. Our target is the $74.00 level.

Picked on  November 07 at $ 68.81
Change since picked:       + 1.14
Earnings Date            10/26/09 (confirmed)
Average Daily Volume =        444 thousand 
Listed on  November 07, 2009         


Capella Education - CPLA - close: 72.03 change: -0.52 stop: 69.49

Our new aggressive trade on CPLA is not off to a very good start. Shares under performed the market with a 0.7% decline. At this point I'd probably look for a bounce over $73.50 to initiate new positions (or a bounce from $70.00). More conservative traders can wait for a move over resistance at $75.00 (and/or up their stops toward this week's low).

We suggested small positions. If CPLA does breakout over $75.00 we can choose to add to our positions. I do consider this an aggressive, higher-risk trade. Currently the Point & Figure chart is bullish with an $85 target. I'm setting our first target at $79.50.

Picked on  November 24 at $ 72.55
Change since picked:       - 0.52
Earnings Date            02/11/10 (unconfirmed)
Average Daily Volume =        126 thousand 
Listed on  November 24, 2009         


Gold ETF - GLD - close: 116.62 change: +1.89 stop: 109.49 *new*

The price of gold continues to soar. Today's breakdown in the U.S. dollar pushed gold to a new all-time high near $1,190.00 an ounce. That lifted the GLD to $116.88 intraday. This commodity is so overbought here then when it does see a correction it will be a sharp one. However, it can always get more overbought. My target on gold is the $1,300 region.

I am turning more cautious on the GLD and more conservative traders will want to seriously consider taking some money off the table right now! I am adjusting our final exit target down to $118.50 and our stop loss up to $109.49. I am not suggesting new positions at this time.

Picked on   October 06 at $102.28
Change since picked:       +14.34
                               /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: 47.22 change: +0.56 stop: 44.49

MSM displayed some relative strength with a 1.2% gain and a close over short-term resistance near $47.00. Our first target is $49.75. Our second target is $52.50.

Picked on  November 17 at $ 46.62
Change since picked:       + 0.60
Earnings Date            01/07/10 (unconfirmed)
Average Daily Volume =        513 thousand 
Listed on  November 17, 2009         


Norfolk Southern - NSC - close: 51.84 change: +0.35 stop: 49.75

NSC is bouncing back but the current trend is still a sideways consolidation. I'm bullish on NSC but more cautious traders might want to wait for a new relative high first (over 52.85) to initiate positions.

Our first target to take profits is at $54.90. Our second target is $58.50. Our time frame is several weeks. FYI: The Point & Figure chart is bullish with a $65 target.

Picked on  November 21 at $ 51.84 (small positions)/gap higher entry
Change since picked:       - 0.00
Earnings Date            01/27/10 (unconfirmed)
Average Daily Volume =        5.4 million  
Listed on  November 21, 2009         


Vertex Pharma - VRTX - close: 39.38 change: +0.32 stop: 38.49

VRTX is still trying to bounce but shares are facing short-term resistance at the 10-dma and at the $40.00 mark. I'm suggesting a trigger to buy calls at $40.25. We'll use a stop under last week's low. Our target to exit is at $44.25. My time frame is several weeks.

Picked on  November xx at $ xx.xx <-- TRIGGER @ 40.25
Change since picked:       + 0.00
Earnings Date            02/09/10 (unconfirmed)
Average Daily Volume =        3.2 million  
Listed on  November 23, 2009         


Waters Corp - WAT - close: 59.78 change: +0.36 stop: 58.75

I don't see any changes from yesterday's comments. More aggressive traders might want to consider bullish positions on a move over $60.00. I'm suggesting readers wait for a move over $61.50. If triggered at $61.50 our first target is $64.90. We'll cautiously set a secondary target at $67.45.

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: 63.36 chg: -0.60 stop: 71.05

GMCR continues to under perform the market. Meanwhile the bidding war for DDRX has yet to be concluded but GMCR is in the stronger position and has the ability to outbid PEET.

I remain bearish on GMCR but it would be risky to open new bearish positions with the stock market drifting toward new highs. GMCR is already a dangerous stock to be bearish on. GMCR has extremely high short interest. Our first target is $60.25. Our second target is $55.50.

Picked on  November 19 at $ 64.75
Change since picked:       - 1.39
Earnings Date            01/28/10 (unconfirmed)
Average Daily Volume =        1.5 million  
Listed on  November 18, 2009         


Goldman Sachs - GS - close: 168.92 change: -2.21 stop: 176.05

I find it very interesting that GS under performed the market today. The stock broke several layers of support near the $170.00 level and hit our trigger to buy puts at $168.75. Our play is open. Our first target is $155.50. More aggressive traders could aim for the $150 area or the 200-dma.

Editor's note on GS' earnings:
A reader brought up a good question last night. GS traditionally reports their Q4 earnings in the middle of December. Yet the company changed their reporting period last quarter and instead of announcing Q3 numbers in September they announced them in October. That might mean that GS' next earnings release may not happen until January.

Chart:

Picked on  November 25 at $168.78
Change since picked:       + 0.14
Earnings Date            12/15/09 (unconfirmed)
Average Daily Volume =        9.5 million  
Listed on  November 21, 2009         


iShares Biotech - IBB - close: 79.11 change: +0.61 stop: 80.05

More conservative will want to consider an early exit now that the IBB has closed over its 50-dma. I'm keeping the play open. The IBB still has resistance at its nine-week trendline of lower highs and at the $80.00 level. Yet I will admit with the S&P 500 drifting higher we're at a disadvantage here and odds are growing that we'll get stopped out. I am not suggesting new bearish positions at this time. We may want to consider switching directions and buying calls if the IBB can close over resistance at $80.00.

The biotech stocks can be a volatile group so I'm suggesting small positions. Our target is near the November lows at $73.50.

Picked on  November 19 at $ 77.18 /gap down entry point
                             /originally listed at $77.86
Change since picked:       + 1.93
Earnings Date            --/--/--
Average Daily Volume =        4.9 million  
Listed on  November 19, 2009         


Northern Trust - NTRS - close: 48.21 change: +0.14 stop: 50.26

Banking stocks under performed the rest of the market on Wednesday yet NTRS displayed relative strength versus its peers. I'm not suggesting new positions at this time. Our first target is $45.85. 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.

Picked on  November 12 at $ 49.18
Change since picked:       - 0.97 
Earnings Date            01/21/10 (unconfirmed)
Average Daily Volume =        3.0 million  
Listed on  November 12, 2009         


Research In Motion - RIMM - close: 59.76 change: +0.23 stop: 65.26

I remain very cautious on RIMM. I'm not suggesting new positions at this time. 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.

Picked on  November 16 at $ 61.80
Change since picked:       - 2.04
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.)

Goldman Sachs - GS - close: 168.92 change: -2.21 stop: n/a

The move past $170.00 offered another entry point to launch strangle positions on GS. I don't see any changes from my previous comments.

The options suggested were the December $180 calls (GPY-LP) and the December $160 puts (GPY-XL). Our estimated cost is about $4.61. We want to sell if either option hits $9.00 or higher.

Picked on  November 21 at $171.67 /gap open entry
Change since picked:       - 2.75
Earnings Date            12/15/09 (unconfirmed)
Average Daily Volume =        9.5 million  
Listed on  November 21, 2009         


Ultra(Long)-S&P500 - SSO - close: 37.87 change: +0.26 stop: n/a

SSO is butting up against resistance near the $38.00 level. More nimble traders may want to consider directional call plays on a breakout above $38.00. I'm not suggesting new strangle positions at this time.

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.

Picked on  November 11 at $ 37.08
Change since picked:       + 0.79
Earnings Date            --/--/--
Average Daily Volume =         32 million  
Listed on  November 11, 2009         


United Parcel Service - UPS - close: 58.20 change: +0.28 stop: n/a

UPS spent the session drifting sideways. I don't see any changes from my prior comments. The options suggested for this trade were the December $60 calls (UPS-LL) and the December $55 puts (UPS-XK). Our estimated cost is $1.05. We want to sell if either option hits $3.00 or more.

Picked on  November 21 at $ 57.99 /gap open entry
Change since picked:       + 0.21
Earnings Date            02/02/10 (unconfirmed)
Average Daily Volume =        4.7 million  
Listed on  November 21, 2009