The afternoon bounce in the stock market presents a potential entry point for some of our trades.


CALL Play Updates

Adobe Systems - ADBE - close: 35.85 change: -0.23 stop: 35.79

There is no change from my prior comments on ADBE. The stock isn't moving much and we're still waiting for a breakout higher. I am suggesting a trigger to buy calls at $37.25. If triggered our first target is $39.95. Our second target is $42.25 but this might be a little optimistic. We won't have much time. ADBE is due to report earnings on December 15th and we don't want to hold over the announcement.

Entry  on  December xx at $ xx.xx <-- TRIGGER @ 37.25
Change since picked:       + 0.00
Earnings Date            12/15/09 (confirmed)
Average Daily Volume =        4.8 million  
Listed on  December 05, 2009         


Bucyrus Intl. - BUCY - close: 50.72 change: +0.96 stop: 48.99 *new*

It's been a rocky session for the commodity-related stocks. The group eventually broke higher as the dollar rolled over. BUCY broke out past a short-term trend of lower highs. Originally we had a plan to buy calls on BUCY if it rallied past resistance near $55.00. Then we added a trigger to buy puts if it hit $48.95 because shares were starting to breakdown. Thus far neither trigger has been hit.

I suspect that BUCY will bounce from here so I'm suggesting very small bullish positions with a tight stop under today's low. We'll take profits at $54.90. I'm keeping the trigger to buy puts at $48.95 active in case BUCY rolls over.

For the bullish trade we want to use the January calls. My preference is the $55 strike (HIK-AK) current ask is $1.80.

Chart:

Entry  on  December 09 at $ 50.72 
Change since picked:       + 0.00
Earnings Date            02/18/10 (unconfirmed)
Average Daily Volume =        2.8 million  
Listed on  December 01, 2009         


Capella Education - CPLA - close: 73.05 change: +1.17 stop: 69.65

CPLA is showing some strength with a 1.6% gain following yet another bounce from the $70.00 level. I would be tempted to buy calls right here but more conservative traders may want to look for a new rise over $75.00 first. Our target is $79.50.

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

Picked on  November 24 at $ 72.55
Change since picked:       + 0.50
Earnings Date            02/11/10 (unconfirmed)
Average Daily Volume =        126 thousand 
Listed on  November 24, 2009         


Fedex Corp. - FDX - close: 89.00 change: -0.88 stop: 83.90

FDX suffered some profit taking after yesterday's pop higher. Technically today's session produced a bearish engulfing candlestick pattern but I'm not that alarmed by it. FDX is a little overbought and due for a pull back. The stock has already hit our first target near $90.00. We're currently aiming for $94.90.

Picked on  December 01 at $ 85.75 
Change since picked:       + 3.25
Earnings Date            12/17/09 (confirmed)
Average Daily Volume =        2.6 million  
Listed on  November 30, 2009         


Infosys Tech. - INFY - close: 52.49 change: +0.73 stop: 49.90

INFY is bouncing back toward its highs. While I'm bullish on INFY right here readers might want to wait for a move over $53.00 before launching positions. Our first target to take profits is at $55.75. Our second and final target is $59.50. We will plan to exit ahead of the January 12th earnings report.

Entry  on  December 05 at $ 51.88 /gap down entry point
                           /originally listed at $52.46
Change since picked:       + 0.61
Earnings Date            01/12/10 (confirmed)
Average Daily Volume =        1.4 million  
Listed on  December 05, 2009         


Ishares Financial - IYF - close: 51.12 change: +0.13 stop: 49.99

The financial sector is still going nowhere. The IFY traded in a narrow range. It will be interesting to see if the sector will move tomorrow following news out tonight after the bell that Citigroup is considering a capital raise to help pay back the TARP money.

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 (more cautious traders can wait for a move over $53.00) before I'd consider new positions. Our multi-week target is $59.00. I would use small positions.

Entry  on  December 03 at $ 52.60
Change since picked:       - 1.48
Earnings Date            --/--/--
Average Daily Volume =        3.1 million  
Listed on  December 02, 2009         


MSC Industrial Direct - MSM - close: 46.28 change: -0.09 stop: 44.90

It was another forgettable session for MSM. The stock bounced from the $45.55 level and almost made it back to breakeven. I'm not suggesting new bullish positions. Our first target is $49.75. Our second target is $52.50.

Picked on  November 17 at $ 46.62
Change since picked:       - 0.34
Earnings Date            01/07/10 (unconfirmed)
Average Daily Volume =        513 thousand 
Listed on  November 17, 2009         


Norfolk Southern - NSC - close: 51.27 change: -0.03 stop: 49.75

NSC slipped to $50.64 near its 30-dma this afternoon before paring its losses. Nimble traders may want to consider buying a bounce from here. More conservative traders can wait for a breakout over $53.00. 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:       - 0.57 
Earnings Date            01/27/10 (unconfirmed)
Average Daily Volume =        5.4 million  
Listed on  November 21, 2009         


Precision Castparts - PCP - close: 109.69 change: +0.02 stop: 104.95

Traders bought the dip in PCP at $107.50 twice this morning. The stock broke higher this afternoon and broke a very short-term trend of lower highs. I think PCP is poised to move higher if we get a cooperative market. I'd consider this afternoon bounce a new entry point to buy calls.

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:       + 2.34
Earnings Date            01/20/10 (unconfirmed)
Average Daily Volume =        817 thousand 
Listed on  November 28, 2009         


Valmont Industries - VMI - close: 80.44 change: +1.88 stop: 77.65

VMI is showing some relative strength with a new three-week high. The close over $80.00 is bullish and shares are challenging the 100-dma. More aggressive traders could jump into bullish trades now. I am suggesting a trigger to buy calls at $81.00. If triggered our first target to take profits is at $84.90. Our second target is $88.75. FYI: The most recent data list short interest at 9% of the very small 20.1 million-share float.

Entry  on  December xx at $ xx.xx <-- TRIGGER @ 81.00
Change since picked:       + 0.00
Earnings Date            02/10/10 (unconfirmed)
Average Daily Volume =        238 thousand 
Listed on  December 05, 2009         


Vertex Pharma - VRTX - close: 40.18 change: +0.36 stop: 38.35

The rebound in VRTX continues. The close back over $40.00 is bullish. Readers could open bullish positions now or wait for a new relative high over $40.44. Our target to exit is at $44.25. My time frame is several weeks.

Entry  on  December 03 at $ 40.25
Change since picked:       - 0.07
Earnings Date            02/09/10 (unconfirmed)
Average Daily Volume =        3.2 million  
Listed on  November 23, 2009         


PUT Play Updates

Bucyrus Intl. - BUCY - close: 50.72 change: +0.96 stop: 51.90

It looks like BUCY has a good chance at bounce from here. I've added it back to the call-section with a new entry point, stop loss and target. However, we're keeping this trigger to buy puts at $48.95 active in case BUCY rolls over. If triggered I'm suggesting the January puts. My preference is the $50 or $45 strike. Our first target is $45.50 (just above the 50-dma). Our second target is $40.50.

Picked on  December 01 at $ xx.xx <-- TRIGGER @ 48.95, small positions
Change since picked:       + 0.00
Earnings Date            02/18/10 (unconfirmed)
Average Daily Volume =        2.8 million  
Listed on  December 01, 2009         


FISERV Inc. - FISV - close: 46.67 change: -0.07 stop: 48.05

FISV is still producing a short-term bearish trend of lower highs and lower lows but it's not moving very fast. I am not suggesting new positions at this time. Currently our bearish target o FISV is $42.25.

Picked on  November 28 at $ 46.29
Change since picked:       + 0.65
Earnings Date            02/02/10 (unconfirmed)
Average Daily Volume =        1.4 million  
Listed on  November 28, 2009         


Green Mountain Coffee Roasters - GMCR - cls: 61.72 chg: -1.10 stop: 66.15

The bounce in GMCR failed at the $64.00 level. The stock lost 1.75% on the session. I am not suggesting new positions at this time. Our second and final target is $56.00. This is a higher-risk trade considering the risk of a short squeeze.

Picked on  November 19 at $ 64.75
Change since picked:       - 3.03
                                /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: 166.44 change: +4.60 stop: 171.05

I warned readers yesterday to expect an oversold bounce from $160. The low today was $160.72 and GS shot higher to out perform the market with a 2.8% gain. I'm not suggesting new positions at this time but a new failed rally at $170 would work as a new entry point. Our target is $155.50. More aggressive traders could aim for the $150 area or the simple 200-dma.

Please note our new stop loss at $171.05.

Picked on  November 25 at $168.75
Change since picked:       - 2.31
Earnings Date            12/15/09 (unconfirmed, could be in January)
Average Daily Volume =        9.5 million  
Listed on  November 21, 2009         


Sears Holding - SHLD - close: 71.32 change: +0.33 stop: 73.26

Shares of SHLD hit the $70.00 level and bounced although the bounce didn't get very far.

I am suggesting traders buy puts if SHLD hits $69.50. Use small positions at least 1/2 your normal trade size. If triggered our first target is $65.25. Our second target is $60.50.

Entry  on  December xx at $ xx.xx <-- TRIGGER @ 69.50 (small pos)
Change since picked:       + 0.00
Earnings Date            02/25/10 (unconfirmed)
Average Daily Volume =        1.6 million  
Listed on  December 08, 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: 197.80 change: +7.93 stop: n/a

It was a bad day for bears in AAPL. The stock surged 4% and closed back above the 50-dma. However, AAPL still has overhead resistance near $200.00 and the bottom of its broken bullish channel. Plus there is a four-week trendline of lower highs.

If AAPL trades back in the $199.00-201.00 zone I would consider launching a new strangle trade with January options.

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:       - 2.11
Earnings Date            01/21/10 (unconfirmed)
Average Daily Volume =       15.1 million  
Listed on  November 30, 2009         


Goldman Sachs - GS - close: 166.44 change: +4.60 stop: n/a

An oversold bounce in GS added 2.8% to the stock. 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:       - 5.23
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: 36.91 change: +0.23 stop: n/a

The S&P 500 is bouncing from the bottom of its trading range. Odds are against us with less than two weeks to go. 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:       - 0.17
Earnings Date            --/--/--
Average Daily Volume =         32 million  
Listed on  November 11, 2009         


United Parcel Service - UPS - close: 57.76 change: +0.02 stop: n/a

I am still amazed that UPS has been this quiet for so long. The stock continues to churn in a very narrow trading range. Our December strangle may not survive but I would actually consider opening up new strangle positions with January options with UPS trading in the 57.00-58.00 zone. Note: I've adjusted our exit price for the December trade.

I'm suggesting the January $60.00 calls (UPS-AL, currently about $0.65) and the January $55.00 puts (UPS-MK, currently about $0.70). Our estimated cost is $1.35. I would plan to sell if either option hit $3.50 or more.

December Strangle
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 $1.95 or more.

Chart:

Picked on  November 21 at $ 57.99 /gap open entry
Change since picked:       - 0.23 
Earnings Date            02/02/10 (unconfirmed)
Average Daily Volume =        4.7 million  
Listed on  November 21, 2009