Editor's Note:

It was a disappointing session. The early morning strength on the BAC news faded. Investors were unhappy with the downtick in the ISM services index and the terrible retail sales numbers. The market could also be nervous about Friday's non-farm payrolls report in spite of the positive expectation for an improvement in job losses.


CALL Play Updates

Bucyrus Intl. - BUCY - close: 51.87 change: -0.74 stop: 51.90

BUCY continues to retreat from resistance near $55.00. There is no change from my prior comments. Currently we're on the sidelines waiting for a breakout with a trigger to buy calls at $55.65. If triggered our first target is $59.90. Our second target is $64.00.

Picked on  December 01 at $ xx.xx <-- TRIGGER @ 55.65
Change since picked:       + 0.00
Earnings Date            02/18/10 (unconfirmed)
Average Daily Volume =        2.8 million  
Listed on  December 01, 2009         


Caterpillar - CAT - close: 58.20 change: -0.74 stop: 58.49

CAT is also retreating with another 74-cent slide and a failed rally near $60.00 this morning. We're also on the sidelines here with CAT. The plan is to buy calls with a trigger at $61.51. If triggered our first target is $64.95. Our second target is $69.00.

Picked on  December 01 at $ xx.xx <-- TRIGGER @ 61.51
Change since picked:       + 0.00
Earnings Date            01/26/10 (unconfirmed)
Average Daily Volume =        7.8 million  
Listed on  December 01, 2009         


Capella Education - CPLA - close: 70.48 change: -1.16 stop: 69.65

It was a down session for CPLA. The stock failed near its 10-dma and closed on its lows at its 50-dma. This should be support but the recent trading action has been negative. Now it depends on how investors choose to interpret the jobs data tomorrow. 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:       - 2.07
Earnings Date            02/11/10 (unconfirmed)
Average Daily Volume =        126 thousand 
Listed on  November 24, 2009         


Fedex Corp. - FDX - close: 85.94 change: -1.16 stop: 80.75

FDX hit a new 2009 high this morning then failed to hold it. The decline today looks like a short-term bearish reversal. I'd expect a dip toward $84.00 and possible the $82 region. 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.

Picked on  December 01 at $ 85.75 
Change since picked:       + 0.19
Earnings Date            12/17/09 (confirmed)
Average Daily Volume =        2.6 million  
Listed on  November 30, 2009         


Ishares Financial - IYF - close: 51.23 change: -0.94 stop: 49.99

Ouch! The action in the IYF today is very disappointing. Financials rallied this morning on the BAC news last night but the sector immediately reversed lower and eventually turned negative. If that wasn't enough the selling began to pick up speed into the closing bell. Our new call play was triggered at $52.60 but I'm not suggesting new positions at this time. We need to see a clearly defined bounce from the 100-dma or a new move over $52.50 before I'd consider new positions. Our multi-week target is $59.00. I would use small positions.

Chart:

Entry  on  December 03 at $ 52.60
Change since picked:       - 1.37
Earnings Date            --/--/--
Average Daily Volume =        3.1 million  
Listed on  December 02, 2009         


MSC Industrial Direct - MSM - close: 46.11 change: -0.21 stop: 44.90

MSM's morning rally failed near $47.00. 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:       - 0.51
Earnings Date            01/07/10 (unconfirmed)
Average Daily Volume =        513 thousand 
Listed on  November 17, 2009         


Norfolk Southern - NSC - close: 51.48 change: -0.74 stop: 49.75

NSC is starting to roll over under resistance. If the market's don't breakout higher tomorrow the bulls could be in trouble here. NSC should still have support near $50.00.

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:       - 0.36 
Earnings Date            01/27/10 (unconfirmed)
Average Daily Volume =        5.4 million  
Listed on  November 21, 2009         


Precision Castparts - PCP - close: 107.89 change: +0.14 stop: 103.49

PCP out performed most of the market and managed to hit new 2009 highs at $109.03 this afternoon. Unfortunately the market's afternoon swoon had PCP paring its gains.

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.

Picked on  December 01 at $107.35
Change since picked:       + 0.54
Earnings Date            01/20/10 (unconfirmed)
Average Daily Volume =        817 thousand 
Listed on  November 28, 2009         


Vertex Pharma - VRTX - close: 40.22 change: +0.73 stop: 38.49

Hmm... I'm surprised by the strength in shares of VRTX today. Last night the company announced plans to sell an additional 10 million to 11.5 million new shares of stocks in an attempt to raise capital. Normally investors don't like it when a company sells more stock since it dilutes current shareholders. Yet the stock opened strong. There was a midday swoon but traders bought the dip at $39.00 and VRTX actually hit a new two-week high. Shares also hit our trigger to buy calls at $40.25. Our call play is open. Our target to exit is at $44.25. My time frame is several weeks. FYI: Prior to this new sale of stock VRTX had about 181 million shares outstanding.

Chart:

Entry  on  December 03 at $ 40.25
Change since picked:       - 0.03
Earnings Date            02/09/10 (unconfirmed)
Average Daily Volume =        3.2 million  
Listed on  November 23, 2009         


PUT Play Updates

FISERV Inc. - FISV - close: 46.37 change: -1.07 stop: 48.55

As expected FISV is failing near overhead resistance. The stock under performed the market with a 2.2% decline. While this move is bearish and could be used as a new entry point I remain cautious over the possibility of the S&P 500 breaking out higher on a stronger jobs number tomorrow. Currently our bearish target o FISV is $42.25.

Picked on  November 28 at $ 46.29
Change since picked:       + 0.08
Earnings Date            02/02/10 (unconfirmed)
Average Daily Volume =        1.4 million  
Listed on  November 28, 2009         


Green Mountain Coffee Roasters - GMCR - cls: 59.95 chg: -0.94 stop: 66.15 *new*

Target achieved. GMCR is still sinking and shares hit $59.80 late this afternoon. Our first target to take profits was hit at $60.25. I hope that readers did take profits. If the S&P 500 rallies higher tomorrow on a strong jobs number then GMCR, with its high amount of short interest, could see a strong bounce. I am lowering our stop loss to $66.15. More conservative traders may want to use a tighter stop loss.

I'm not suggesting new positions at this time. Our second and final target is $55.50. This is a higher-risk trade.

Chart:

Picked on  November 19 at $ 64.75
Change since picked:       - 4.80
                                /1st target hit @ 60.25 (-6.9%)
Earnings Date            01/28/10 (unconfirmed)
Average Daily Volume =        1.5 million  
Listed on  November 18, 2009         


Goldman Sachs - GS - close: 164.30 change: -2.36 stop: 176.05

The down trend continues in GS. Today the stock reversed under short-term resistance at its 10-dma. Tomorrow will be very interesting to see how shares react to the jobs number. 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:       - 4.45
Earnings Date            12/15/09 (unconfirmed, could be in January)
Average Daily Volume =        9.5 million  
Listed on  November 21, 2009         


Research In Motion - RIMM - close: 58.42 change: -1.39 stop: 62.75

RIMM appears to be rolling over again but the stock has not yet broken the new trendline of (potential) support. I'm not suggesting new positions. More conservative traders may want to lower their stops.

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:       - 3.38
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: 196.48 change: +0.25 stop: n/a

The intraday bounce in AAPL failed at the $199.00 level. The move to $199 gave us another chance to launch positions. I'm not suggesting new strangles at this time (unless we see another bounce closer to $200.00).

More nimble traders might want to consider put options if AAPL breaks the 50-dma (currently at $195.00). I am no longer suggesting new 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:       - 3.43
Earnings Date            01/21/10 (unconfirmed)
Average Daily Volume =       15.1 million  
Listed on  November 30, 2009         


Goldman Sachs - GS - close: 164.30 change: -2.36 stop: n/a

So far so good. We just need GS to pick a direction and run and right now it's running lower. 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:       - 7.37
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: 37.20 change: -0.60 stop: n/a

The SSO tagged a new 52-week high and reversed. The market's direction will depend on how investors choose to interpret tomorrow's jobs report. 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:       + 0.12
Earnings Date            --/--/--
Average Daily Volume =         32 million  
Listed on  November 11, 2009         


United Parcel Service - UPS - close: 57.57 change: -0.33 stop: n/a

It looks like we were two weeks too early on the UPS strangle play. The stock hasn't move in the last two weeks. Hopefully that will change tomorrow on the jobs number. I'm not suggesting new strangle positions at this time.

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:       - 0.42 
Earnings Date            02/02/10 (unconfirmed)
Average Daily Volume =        4.7 million  
Listed on  November 21, 2009