We have five days left before December options expire. There are only 13 trading days left for the year.


CALL Play Updates

Bucyrus Intl. - BUCY - close: 50.98 change: +0.68 stop: 48.99

The fact that BUCY managed a rebound in the face of dollar strength is encouraging but if the dollar continues to rise this trade could be in jeopardy. I am not suggesting new positions at this time. More conservative traders may want to up their stops closer to $50.00. We'll plan to take profits at $54.90. I'm keeping the trigger to buy puts at $48.95 active in case BUCY rolls over.

Suggested Options:
No new positions at this time.

Annotated Chart:
loss.

Entry  on  December 09 at $ 50.72 
Change since picked:       + 0.26
Earnings Date            02/18/10 (unconfirmed)
Average Daily Volume =        2.8 million  
Listed on  December 01, 2009         


Capella Education - CPLA - close: 72.45 change: +0.57 stop: 69.65

We are seriously running out of time. December options expire in five days. If we don't see CPLA trade over $75.00 soon it's game over. I'm not suggesting new positions. Traders may want to adjust their targets to some fraction of our initial investment just to recoup some capital.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on  November 24 at $ 72.55
Change since picked:       - 0.10
Earnings Date            02/11/10 (unconfirmed)
Average Daily Volume =        126 thousand 
Listed on  November 24, 2009         


EQUINIX Inc. - EQIX - close: 101.63 change: -0.05 stop: 97.45

EQIX hit new 52-week highs last week but the momentum has stalled the last couple of sessions. I don't see any changes from my prior comments. Broken resistance near $100.00 should be the first line of support. If that breaks then the $98.00-97.50 zone should be support. Look for a dip or a bounce near $100 as our next entry point. Our target is $109.50. The plan was to use small position sizes.

Suggested Options:
If EQIX provides a new entry point I'm suggesting the January calls. My preference is the $105 strike.

Annotated Chart:

Entry  on  December 09 at $103.02
Change since picked:       - 1.39
Earnings Date            02/10/10 (unconfirmed)
Average Daily Volume =        501 thousand 
Listed on  December 09, 2009         


Fedex Corp. - FDX - close: 87.94 change: -0.10 stop: 83.90

The profit taking in FDX continues for the third day in a row but it's definitely slowing down. I don't see any changes from my prior comments. The stock is still out performing its peers. Look for support in the $86-85 zone. More conservative traders may want to raise their stops closer to $85.00. The stock has already hit our first target near $90.00. We're currently aiming for $94.90.

Suggested Options:
If FDX provides a new entry point near $85-86 I'd use the January calls. If you own December calls you have to exit before this Friday's closing bell.

Annotated Chart:

Picked on  December 01 at $ 85.75 
Change since picked:       + 2.19
Earnings Date            12/17/09 (confirmed)
Average Daily Volume =        2.6 million  
Listed on  November 30, 2009         


F5 Networks - FFIV - close: 50.05 change: -2.51 stop: 47.99

Shares of FFIV under performed the market with a 4.7% decline thanks to a broker's downgrade on Friday morning. The stock held support at the $50.00 level. I see this pull back as an entry point to buy calls. More conservative traders can wait to buy calls on a bounce. Watch the 30-dma (near 48.50) for technical support. Our stop loss is a little wide so keep your position size small. Our first target to take profits is at $54.90. Our second target is $57.45.

Suggested Options:
Use the January calls. My preference is the $50 or $55 strike.

Annotated Chart:

Entry  on  December 09 at $ 52.08
Change since picked:       - 2.03
Earnings Date            01/20/10 (unconfirmed)
Average Daily Volume =        1.2 million  
Listed on  December 09, 2009         


Infosys Tech. - INFY - close: 52.48 change: -0.13 stop: 49.90

Nothing has changed for us with INFY. The stock's sideways consolidation is narrowing and suggest a breakout is imminent. Odds are INFY will breakout higher but it's not guaranteed. More conservative traders can wait for a move over $53.00 or the 2009 high of $53.13 to open bullish 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.

Suggested Options:
I'm suggesting the January calls. My preference is the $55 strike.

Annotated Chart:

Entry  on  December 05 at $ 51.88 /gap down entry point
                           /originally listed at $52.46
Change since picked:       + 0.60
Earnings Date            01/12/10 (confirmed)
Average Daily Volume =        1.4 million  
Listed on  December 05, 2009         


Ishares Financial - IYF - close: 51.44 change: +0.37 stop: 49.99

The banking stocks have continued to under perform the rest of the market. However, the IYF just spent four days hovering near technical support at its rising 100-dma. A bounce from here could be used as a new bullish entry point. More conservative traders may want to wait for a new rise over $53.00 before launching positions. Our multi-week target is $59.00. I would use small positions.

Suggested Options:
I would hesitate to launch positions right here. If the IYF closes under $50.70 I'd probably close this trade early. If you open positions use the February calls. My preference is the $55 strike.

Annotated Chart:

Entry  on  December 03 at $ 52.60
Change since picked:       - 1.16
Earnings Date            --/--/--
Average Daily Volume =        3.1 million  
Listed on  December 02, 2009         


MSC Industrial Direct - MSM - close: 46.95 change: +0.53 stop: 44.90

MSM displayed some relative strength but it may be too little too late. We only have five trading days left before December options expire. Traders may want to dial back their target expectations to some fraction of our original trade just to recoup some capital. A close over $47.50 might be a new entry point but you'll need to buy options with more time. I'd consider buying the January calls but keep in mind we'll exit ahead of the early January earnings report.

Suggested Options:
Consider buying the January calls on a new entry point over $47.50.

Annotated Chart:

Picked on  November 17 at $ 46.62
Change since picked:       + 0.33
Earnings Date            01/07/10 (unconfirmed)
Average Daily Volume =        513 thousand 
Listed on  November 17, 2009         


Norfolk Southern - NSC - close: 52.22 change: -0.02 stop: 49.75

Shares of NSC have now spent five weeks in the $50-53 trading range. The stock will breakout eventually. Odds favor a breakout higher but it's not guaranteed. At this point if you're nimble enough consider buying dips or bounces near $50.00 or wait for a breakout over $53.00. I am adjusting our exit strategy. Our first target is now $56.50. Our second and final target is $59.50. Our time frame is several weeks. FYI: The Point & Figure chart is bullish with a $65 target.

Suggested Options:
If NSC provides a new entry point I'd buy the January or March calls. My preference is the $55 strike.

Annotated Chart:

Picked on  November 21 at $ 51.84 (small positions)/gap higher entry
Change since picked:       + 0.38
Earnings Date            01/27/10 (unconfirmed)
Average Daily Volume =        5.4 million  
Listed on  November 21, 2009         


Precision Castparts - PCP - close: 111.97 change: +2.27 stop: 104.95

Target hit. Momentum continues for PCP. The stock rallied to new 2009 highs on Friday hitting $112.74 intraday. Our first target to take profits was at $112.45. Our second target is $118.75. The Point & Figure chart is bullish with a $131 target.

Suggested Options:
If you choose to open new positions here you'll need to raise your stop loss.

Annotated Chart:

Picked on  December 01 at $107.35
Change since picked:       + 4.62
                            /1st target hit $112.45 (+4.7%)
Earnings Date            01/20/10 (unconfirmed)
Average Daily Volume =        817 thousand 
Listed on  November 28, 2009         


UnitedHealth Group - UNH - close: 30.48 change: +0.17 stop: 26.99

UNH hit a new 52-week high this morning at $31.04. I don't see any changes from my Thursday night comments so I'm reposting them here:

It looks like the only sector really moving [Thursday] was healthcare. These stocks were up on expectations that the latest version of the Senate's healthcare reform bill will have a lot less reform in it. Until this bill eventually gets passed and signed into law the healthcare stocks could have a cloud over them. Yet once the big details are known and investors can make decisions without so much uncertainty this group could really move. UNH appears to be out performing its peers. [Thursday's] close over significant resistance at the $30.00 mark is bullish.

I'm suggesting small call positions on [Thursday's] move. Consider this a lottery ticket play. We're either going to win big or lose it all. Options are probably a little expensive given today's volatile move. If you can wait consider waiting a day for the premiums to come in a little bit. Our first target is $34.00. Our longer-term target is $36.00. Our time frame is several weeks. If you buy March calls you might want to think about holding over the late January earnings report.

Suggested Options:
I'm going to list January calls and March calls. Depending on your risk tolerance pick the month that suits you best.

BUY CALL JAN 32.00 UNH-AL open interest=2859 current ask $0.80
-or-
BUY CALL MAR 33.00 UNH-CM open interest=5582 current ask $1.57

Annotated Chart:

Entry  on  December 10 at $ 30.31 
Change since picked:       + 0.17
Earnings Date            01/21/10 (unconfirmed)
Average Daily Volume =        819 thousand 
Listed on  December 10, 2009         


Valmont Industries - VMI - close: 80.83 change: +0.66 stop: 77.65

There was no follow through on Thursday's failed rally pattern. That's good news. VMI is still trading above resistance near $80.00 and its 100-dma. That's also good news. Technically traders are probably okay buying calls with VMI above $80.00 but I'd prefer to launch positions on a new move over $81.00. 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.

Suggested Options:
I'm suggesting the January calls. My preference is the $85 strike.

Annotated Chart:

Entry  on  December 10 at $ 81.00
Change since picked:       - 0.17
Earnings Date            02/10/10 (unconfirmed)
Average Daily Volume =        238 thousand 
Listed on  December 05, 2009         


Vertex Pharma - VRTX - close: 39.90 change: -0.39 stop: 38.35

If you look at the intraday chart on VRTX shares are bouncing from their lows of the session and look poised to move higher. I'd be tempted to buy calls now but readers might be better off waiting for new rise over $40.60 to initiate positions. Our target to exit is at $44.25. My time frame is several weeks.

Suggested Options:
See above for entry points. If you buy calls I'd use the January options. My preference is the $40 strike.

Annotated Chart:

Entry  on  December 03 at $ 40.25
Change since picked:       - 0.35
Earnings Date            02/09/10 (unconfirmed)
Average Daily Volume =        3.2 million  
Listed on  November 23, 2009         


PUT Play Updates

Bucyrus Intl. - BUCY - close: 50.98 change: +0.68 stop: 51.90

If the U.S. dollar continues to rally the recent bounce in some of the commodity-related names like BUCY may not last very long. Currently BUCY is an active call play but if it reverses we want to be ready. The plan is to buy puts if BUCY hits $48.95. Use small positions. 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.

Suggested Options:
I'm suggesting the January puts. My preference is the $50 or $45 strikes.

Annotated Chart:

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         


Goldman Sachs - GS - close: 166.00 change: -0.73 stop: 171.05

The early morning bounce in GS didn't get very far. Shares reversed under $168.00, which happened to be resistance on Thursday as well. This doesn't mean the oversold bounce is over but the lack of follow through is positive for the bears. I'm not suggesting new positions at this time. Our target is $155.50. More aggressive traders could aim for the $150 area or the simple 200-dma.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on  November 25 at $168.75
Change since picked:       - 2.75
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: 73.35 change: +2.03 stop: 73.26

The improvement in consumer sentiment and the better than expected retail sales numbers from the Commerce Department this morning is bullish for retailers. The RLX gained 1.2% on the session. SHLD has been bouncing from support near $70.00 and its long-term trendline of higher lows. If the stock can close over $75.00 I'll drop SHLD as a bearish candidate and we may want to consider switching sides and buying calls. For now the plan is to buy puts if SHLD breaks $70.00 and hits our trigger at $69.50. I'm suggesting small position sizes. If triggered our first target is $65.25. Our second target is $60.50.

Suggested Options:
If SHLD hits our trigger I'm suggesting January puts. My preference is the $65 strike.

Annotated Chart:

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: 194.67 change: -1.76 stop: n/a

Thursday's failed rally at $200 and Friday's under performance by AAPL looks like a bearish entry point. Fortunately stocks tend to fall faster than they climb but we're running out of time for the December trade. December options expire in five days. I am not suggesting new strangle positions at this time.

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.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on  November 30 at $199.91
Change since picked:       - 5.24
Earnings Date            01/21/10 (unconfirmed)
Average Daily Volume =       15.1 million  
Listed on  November 30, 2009         


Goldman Sachs - GS - close: 166.00 change: -0.73 stop: n/a

We're down to our last five days for December options. We need to see GS under $160 or above $180 soon. At this point I'd consider exiting if either option traded high enough to recoup some capital. 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.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on  November 21 at $171.67 /gap open entry
Change since picked:       - 5.67
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: 37.68 change: +0.35 stop: n/a

We're almost out of time for this SSO strangle. December options expire in five days. 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.

Suggested Options:
No new positions.

Annotated Chart:

Picked on  November 11 at $ 37.08
Change since picked:       + 0.60
Earnings Date            --/--/--
Average Daily Volume =         32 million  
Listed on  November 11, 2009         


United Parcel Service - UPS - close: 58.01 change: +0.38 stop: n/a

The sideways churning continues. Can UPS extend this narrow range for another week? We have five days left for December options. I'd still consider January strangles in the $58-56 zone.

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.

January Strangle
The options suggested for the January strangle were the January $60.00 calls (UPS-AL) and the January $55.00 puts (UPS-MK). Our estimated cost was $1.35. I would plan to sell if either option hit $3.50 or more.

Suggested Options:
I'd consider January positions.

Annotated Chart:

Picked on  November 21 at $ 57.99 /gap open entry
Change since picked:       + 0.02 
Earnings Date            02/02/10 (unconfirmed)
Average Daily Volume =        4.7 million  
Listed on  November 21, 2009         


CLOSED BULLISH PLAYS

Adobe Systems - ADBE - close: 35.38 change: -0.42 stop: 35.79

ADBE has continued to under perform the market. Our trigger to buy calls was never hit at $37.25. I'm dropping ADBE as a bullish candidate. The company is due to report earnings on Tuesday, December 15th and we don't want to hold over the report.

Chart:

Entry  on  December xx at $ xx.xx <-- TRIGGER @ 37.25
Change since picked:       + 0.00          *never opened*
Earnings Date            12/15/09 (confirmed)
Average Daily Volume =        4.8 million  
Listed on  December 05, 2009         


CLOSED BEARISH PLAYS

FISERV Inc. - FISV - close: 47.04 change: +0.35 stop: 48.05

I am giving up on FISV. The overall trend looks like the stock is poised to move lower but I'd rather see a breakdown under $45.00 or its 200-dma before initiating positions. I couldn't find any news to account for the spike higher this morning. Shares hit $47.86 and reversed lower. We're closing this trade early.

Chart:

Picked on  November 28 at $ 46.29
Change since picked:       + 0.75 <-- early exit @ 47.04 (+1.6%)
Earnings Date            02/02/10 (unconfirmed)
Average Daily Volume =        1.4 million  
Listed on  November 28, 2009         


Green Mountain Coffee Roasters - GMCR - cls: 65.47 chg: +2.00 stop: 64.51

GMCR spiked higher this morning on some positive analyst comments. The stock gapped open at $64.44 and quickly hit our new stop loss at $64.51 closing the play. Shares eventually rallied to their 100-dma before trimming their gains.

Annotated Chart:

Picked on  November 19 at $ 64.75
Change since picked:       - 0.34 <-- stopped @ 64.51 (-0.05%)
                                /1st target hit @ 60.25 (-6.9%)
Earnings Date            01/28/10 (unconfirmed)
Average Daily Volume =        1.5 million  
Listed on  November 18, 2009