We had two bullish plays triggered on Tuesday's rally higher. We've adjusted the stop loss on one candidate.


CALL Play Updates

Capella Education - CPLA - close: 71.34 change: +0.06 stop: 69.65

The action in CPLA today was pretty disappointing. Shares barely moved while the market rallied higher. I see this as a warning sign and urge caution. No new positions at this time.

I do consider this an aggressive, higher-risk trade. Currently the Point & Figure chart is bullish with an $85 target. The target for our earlier position is $79.50.

Picked on  November 24 at $ 72.55
Change since picked:       - 1.21
Earnings Date            02/11/10 (unconfirmed)
Average Daily Volume =        126 thousand 
Listed on  November 24, 2009         


Fedex Corp. - FDX - close: 85.88 change: +1.43 stop: 80.75

FDX continued to march higher. The stock hit $86.57 intraday. We had a trigger to buy small call positions at $85.75 so the trade is now open. Our first target to take profits is at $89.95. Our second target is $94.00. The Point & Figure chart is bullish with a $112 target.

FYI: Readers should note that I'm listing December options, which expire in three weeks. I would prefer to buy January calls but FDX is going to report earnings before December option expiration and we'll exit ahead of the earnings report so there is no need to pay for January's premium.

Chart:

Picked on  December 01 at $ 85.75 
Change since picked:       + 0.13
Earnings Date            12/17/09 (confirmed)
Average Daily Volume =        2.6 million  
Listed on  November 30, 2009         


Gold ETF - GLD - close: 117.38 change: +1.74 stop: 112.45 *new*

Another drop in the dollar helped push gold to another new all-time high. This time gold traded to $1,201 an ounce. This pushed the GLD to a new high of $117.93. Our target to exit is at $118.50. More conservative traders may want to exit early now. I'm raising our stop loss to $112.45. FYI: The January $110 calls are currently trading around $8.70.

Picked on   October 06 at $102.28
Change since picked:       +15.10
                               /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: 45.88 change: -0.02 stop: 44.90

MSM also delivered a very disappointing performance. The stock closed in negative territory while the rest of the market rallied. This is very worrisome and more conservative traders may want to exit early immediately. I'm not suggesting new positions at this time. Our first target is $49.75. Our second target is $52.50.

Picked on  November 17 at $ 46.62
Change since picked:       - 0.74
Earnings Date            01/07/10 (unconfirmed)
Average Daily Volume =        513 thousand 
Listed on  November 17, 2009         


Norfolk Southern - NSC - close: 52.35 change: +0.95 stop: 49.75

NSC has rallied toward resistance near its November highs. The stock looks poised to breakout higher. Readers may want to launch new positions over $53.00 (and aim for $58.50).

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:       + 0.51 
Earnings Date            01/27/10 (unconfirmed)
Average Daily Volume =        5.4 million  
Listed on  November 21, 2009         


Precision Castparts - PCP - close: 107.07 change: +3.39 stop: 103.49

Yesterday I was worried with PCP's under performance. The stock bounced back ferociously with a 3.2% rally. Shares are now back to testing resistance near their November highs. The high today was $107.38 in the last hour of trading. Our trigger to buy calls was at $107.35. Our play has been triggered. If you're still looking for an entry point wait for a move over $107.50.

Our first target to take profits is at $112.45. Our second target is $118.75. The Point & Figure chart is bullish with a $131 target.

Chart:

Picked on  December 01 at $107.35
Change since picked:       - 0.28
Earnings Date            01/20/10 (unconfirmed)
Average Daily Volume =        817 thousand 
Listed on  November 28, 2009         


Vertex Pharma - VRTX - close: 39.86 change: +1.04 stop: 38.49

VRTX delivered a strong session and appears to have broken out from its recent trading range. Yet the stock failed to close over round-number resistance at $40.00. The intraday high was $40.20. We're still on the sidelines. Our trigger to buy calls is 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         


PUT Play Updates

FISERV Inc. - FISV - close: 47.48 change: +1.24 stop: 48.55

FISV is bouncing toward resistance just as expected. The trick now will be the $47.50-48.00 zone and whether or not shares roll over in this range. Look for the failed rally to show up before launching positions. However, I would suggest traders avoid new bearish positions if the S&P 500 breaks out past the 1113-1115 zone. Currently our bearish target o FISV is $42.25.

Picked on  November 28 at $ 46.29
Change since picked:       + 1.19
Earnings Date            02/02/10 (unconfirmed)
Average Daily Volume =        1.4 million  
Listed on  November 28, 2009         


Green Mountain Coffee Roasters - GMCR - cls: 62.04 chg: -0.94 stop: 71.05

GMCR continues to under perform the market. The bounce failed near $64.00 this morning and the stock closed with a 1.5% loss compared to a 1.2% gain for the S&P 500. I don't see any changes from my prior comments.

This is a higher-risk trade. 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:       - 2.71
Earnings Date            01/28/10 (unconfirmed)
Average Daily Volume =        1.5 million  
Listed on  November 18, 2009         


Goldman Sachs - GS - close: 167.63 change: -2.03 stop: 176.05

I find it very interesting that GS, a bellwether in this market, is under performing so badly. Shares rallied to $171.33 and immediately reversed lower this morning. This looks like a new bearish entry point but I'd almost hesitate to launch new put positions if the S&P 500 breaks out to new highs. Our first target is $155.50. More aggressive traders could aim for the $150 area or the simple 200-dma.

Picked on  November 25 at $168.75
Change since picked:       - 1.12
Earnings Date            12/15/09 (unconfirmed, could be in January)
Average Daily Volume =        9.5 million  
Listed on  November 21, 2009         


iShares Biotech - IBB - close: 79.56 change: +1.15 stop: 80.05

More conservative traders will want to consider an early exit right here. IBB has broken above its trendline of lower highs. The only reason I'm keeping IBB on the play list is that shares should still have some resistance at the $80.00 level and if the S&P 500 fails to breakout over current resistance then the IBB might fail as well.

I am not suggesting new bearish positions at this time. We may want to consider switching directions and buy 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:       + 2.38
Earnings Date            --/--/--
Average Daily Volume =        4.9 million  
Listed on  November 19, 2009         


Northern Trust - NTRS - close: 49.38 change: -0.11 stop: 50.26

There was not a lot of follow through for the banking sectors today. Banks did well in Europe but the rally sort of fizzled a bit in the U.S. NTRS, a regional bank in the U.S., struggled under the $50.00 level but the very short-term trend is bullish. Both the BIX and BKX banking indices are nearing four-week old resistance. If these breakout then NTRS will probably breakout past $50.00 and close our play.

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:       + 0.20 
Earnings Date            01/21/10 (unconfirmed)
Average Daily Volume =        3.0 million  
Listed on  November 12, 2009         


Research In Motion - RIMM - close: 59.73 change: +1.84 stop: 62.75

RIMM delivered a strong bounce (+3.1%) but failed to close over round-number resistance at the $60.00 level. The larger trend for RIMM is down but if the S&P 500 can breakout to new highs RIMM will probably follow it higher. More conservative traders may want to lower their stops toward $61.00 or $60.50. I'm not suggesting new bearish 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:       - 2.07
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.)

Apple Inc. - AAPL - close: 196.97 change: -2.94 stop: n/a

AAPL has been a leader in this market during the rally off the March lows. Yet the stock has been under performing lately and today shares displayed real relative weakness with a late-day spike lower. I couldn't find any news to account for the sudden weakness in the last few minutes of trading.

More nimble traders might want to consider put options if AAPL breaks the 50-dma. I am no longer suggesting strangle positions. We would prefer to launch new strangle positions in the $198-202 zone.

We have an aggressive December strangle and a less aggressive January strangle. The options in the December strangle were the December $210 calls (AJL-LV) and the December $190 puts (APV-XR). Our estimated cost is $3.83. We want to sell if either option hits $8.00 or more.

The options in the January strangle were January $220 calls (AJL-LV) and the January $180 puts (APV-XR). Our estimated cost is $5.60. We want to sell if either option hits $10.00 or more.

Picked on  November 30 at $199.91
Change since picked:       - 2.94
Earnings Date            01/21/10 (unconfirmed)
Average Daily Volume =       15.1 million  
Listed on  November 30, 2009         


Goldman Sachs - GS - close: 167.63 change: -2.03 stop: n/a

The early morning rally in GS failed. We've got about three weeks left before December options expire. I am no longer suggesting new strangle positions on the stock.

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:       - 4.04
Earnings Date            12/15/09 (unconfirmed, could be January)
Average Daily Volume =        9.5 million  
Listed on  November 21, 2009         


Ultra(Long)-S&P500 - SSO - close: 37.74 change: +0.84 stop: n/a

The S&P 500 and the SSO are poised to breakout past their November resistance. 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:       + 0.66
Earnings Date            --/--/--
Average Daily Volume =         32 million  
Listed on  November 11, 2009         


United Parcel Service - UPS - close: 57.88 change: +0.41 stop: n/a

UPS continues to churn sideways in a narrow range. If the market breaks out UPS will most likely follow it higher. I'd limit new positions to the $58.00-56.00 zone.

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:       - 0.11
Earnings Date            02/02/10 (unconfirmed)
Average Daily Volume =        4.7 million  
Listed on  November 21, 2009