Editor's Note:
NOTE: James will be filling in for me the remainder of the week. I look forward to catching up with you on Monday. Current Portfolio:


CALL Play Updates

Cameron International - CAM - close 38.19 change -0.49 stop 35.45

Target(s): 40.50, 42.00, 43.95
Key Support/Resistance Areas: 45.00, 42.50, 41.00, 38.75, 36.00
Current Gain/Loss: +0%
Time Frame: Several weeks
New Positions: Yes

Comments:
8/18: CAM sold off early but finished well off of its lows. The stock has had a nice run since it bounced off of its 50-day SMA last week and simply looks like it is consolidating before pushing up towards its recent highs which is near our first target. My comments below remain valid.

8/17: CAM is pausing after its big move over the past few days. The stock closed above its 20-day and 100-day SMA's and looks like it is headed towards our first target of $40.50. The 200-day SMA is about $1 away so CAM will need to fight its way through some overhead resistance.

8/16: CAM gapped lower and the stock was bought the remainder of the day. September $40 were going for 95 cents at the open and they have gained +21%. CAM closed right on its 20-day and 100-day SMA's so we may get a pause or pullback at current levels. Any weakness would give readers who haven't entered positions a 2nd chance. If the broader market bounces from CAM should easily break through the moving averages and trade up towards our targets.

8/14: CAM was caught in the middle of the drama of the Gulf of Mexico oil spill. The stock has been beaten down because they built the blow out preventer (BOP) on the Horizon well. However, the BOP was heavily modified by RIG/BP so they don't really have any exposure to the damages. CAM is world's largest seller and manufacturer of BOP's so any new rules from the government means a lot of new business for Cameron. And the company recently reported over a $1 billion in new orders. I suggest we capitalize on the gaining momentum and initiate long positions now. Our stop $35.45 which is below Thursday's low, and the 50-day SMA. At a minimum I'm looking for CAM to retest its recent swing high and possibly charge up to its 52-week highs if the broader market cooperates.

Current Position: Long September $40.00 CALL, entry was $0.95

Entry on August 16, 2010
Earnings Date 11/3/2010 (unconfirmed)
Average Daily Volume: 4.6 million
Listed on August 14, 2010


FMC Technologies, Inc - FTI - close 63.73 change -1.33 stop 58.25

Target(s): 65.25 (hit), 67.00, 68.75
Key Support/Resistance Areas: 69.00, 65.50, 62.40, 59.00
Current Gain/Loss: +36%
Time Frame: Several weeks
New Positions: Yes, on weakness

Comments:
8/18: FTI gave back a good portion of yesterday's gains as traders took profits. There is intraday support at current levels and the stock remains above all of its daily moving averages and its upward trend line that began on 6/8. I'm not concerned about today's pullback as the stock is forming an ascending triangle and if it breaks above $66.00 our more aggressive targets should be reached. $65.25 was hit yesterday and still remains a valid target. We've got an October option in this position and suggest FTI give it some time and room to work.

8/17: FTI had a huge day and closed +3.57% higher. Our first target was hit today and we have a +63% gain in our position. I've added a third target of $68.75 but also suggest readers consider $67.00 as an area to exit positions, or at least tighten stops.

8/16: FTI also gapped lowered and was bought remainder of the day. The stock closed right on its 20-day SMA so we could get a pause or pullback. Any weakness will give readers a second chance to enter positions. I am looking for a move up towards FTI's recent swing highs which is just above our first target of $65.25.

8/14: This is another play on the Gulf oil spill as FTI stands to benefit from new regulations in underwater robotics. The company reported solid earnings results in July and this past week's dip is a buying opportunity. The stock is maintaining an upward trend line while the broader market has not, which is a sign of overall relative strength. I believe FTI should easily retest its recent swing high which is just above our first target of $65.25. Our more aggressive target is $67.00 but if the broader market is strong FTI could even make a run at its YTD highs. Our stop is $58.25 which is below the upward trend line and the 200-day and 50-day SMA's. I see some potential in this trade and am going to push the suggested option out to October, but that doesn't mean we can't take quick profits should FTI break higher soon.

Current Position: Long October $70.00 CALL, entry was at $1.10

Entry on August 16, 2010
Earnings 10/27/2010 (unconfirmed)
Average Daily Volume: 1.5 million
Listed on August 14, 2010


Human Genome Sciences - HGSI - close 26.41 change +0.06 stop 24.65

Target(s): 27.20 (hit), 27.70, 28.20, 29.20
Key Support/Resistance Areas: 29.80, 28.24, 27.80, 26.80, 25.00
Current Gain/Loss: -3.3%
Time Frame: Several weeks
New Positions: Yes

Comments:
8/18: HGSI was up big early in the day but gave back most of the gains late in the day. The candlestick printed today does not look pretty but the bullish case for HGSI remains in tact. Today's high was just about the same as on 7/26 which created a head and shoulders pattern of sorts. But I think the selling will be short lived and expect HGSI to move back up towards its recent highs, and possibly print new ones. I've added $27.70 as a target, which is just below the 200-day SMA, and suggest readers either take profits at this level or tighten stops to protect them. A move to this level should produce a +50% gain.

8/17: HGSI broke its intraday down trend line and looks poised to move higher from here. The stock has re-taken its 200-day SMA and now needs to get above the 100-day SMA.

8/16: HGSI broke down from its 20-day SMA but when the stock hit its 50-day SMA it bounced hard. The stock looks poised to bounce higher and should make a run at our first target if there is strength in the broader market.

8/14: We are long HGSI calls at 90 cents. The stock traded within yesterday's range so there not much to report. HGSI remains in its upward channel and above its 20 and 50-day SMA's. I'm looking for HGSI to bounce back up towards its 200-day SMA. My comments from below remain the same.

Current Position: Long September $28.00 CALL, entry was at $0.90

Entry on August 13, 2010
Earnings Date N/A (unconfirmed)
Average Daily Volume: 2.9 million
Listed on August 12, 2010


SPDR Gold Trust - GLD - close 120.22 change +0.47 stop 115.95

Target(s): 121.25, 123.00, 125.00
Key Support/Resistance Areas: 123.00, 119.10, 116.50, 113.50
Current Gain/Loss: +27%
Time Frame: Several weeks
New Positions: No

Comments:
8/18: GLD gapped lower this morning but was quickly bought the remainder of the day. GLD hasn't seen a close this high since June. I am looking for gold prices to move about $10 to $15 higher (about +1%) which should be enough in GLD to hit our first target of $120.25 (lowered 35 cents). This should give us a +50% gain and is an area where I suggest closing positions or tightening stops. This move could happen quick so I suggest planning your exit and sticking with it. I'm ready to get out of here with a nice gain.

8/17: GLD traded in an extremely tight range today and appears to be consolidating before a continued move higher. I could see a pullback to close yesterday's gap which is also near the 50-day SMA, but GLD should continue higher towards our targets in the coming days.

8/16: GLD is hanging tough and gained +1% today. The ETF broke above $119.15 which was a resistance point and I believe GLD should make a run higher from here. Our positions have gained +22% and I suggest readers begin to tighten stops or take profits as our targets approach. I've tightened our stop to $115.90 which is below the 20 and 100 day SMA's and GLD's recent upward trend line.

8/14: GLD is consolidating in a tight range above its 50-day SMA. We need a break above $119.15 which should spark more buying. If readers are not in positions a break above this level could be used as a more conservative approach. There is a swing high of $119.54 from December that may also act as resistance but I think the aforementioned level is more important. I also like GLD on any weakness.

Current Position: Long September $120.00 CALL, entry was at $1.80

Entry on August 12, 2010
Earnings Date N/A (unconfirmed)
Average Daily Volume: 12.4 million
Listed on August 10, 2010


UnitedHealth Group Inc - UNH - close 32.54 change +0.19 stop 30.35

Target(s): 33.40, 34.25, 35.00
Key Support/Resistance Areas: 35.00, 34.40, 33.50, 31.50
Current Gain/Loss: +6%
Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
8/18: UNH continued higher today. Our primary targets are $33.40 and $34.25. Take profits or tighten stops at these areas. My comments from below remain valid.

8/17: UNH bounced today and closed +1.4% higher. The stock is holding the upward trend line off of its 7/1 lows and looks poised to make a higher high. My comments from the play release below remain the same.

8/16: UNH is a relative strength play in a defensive sector that should do well in the current market environment. Technically, UNH recently broke out of a key pivot level near $31.50 and has retraced some the gains by turning back to re-test the pivot from above (see dashed line on chart), which is where the stock bounced today. UNH is above all of its major moving averages and is maintaining an upward trend line from the 7/1 lows. I think UNH is poised to retest its recent swing highs and possibly move up towards the $35.00 area. I suggest we initiate long positions now. Our stop is below all of the major moving averages which should provide support on any weakness, and we have realistic targets to book a nice winning trade should UNH bounce from here.

Current Position: Long September $32.00 CALL, entry was at $1.25

Entry on August 17, 2010
Earnings Date 10/19/2010 (unconfirmed)
Average Daily Volume: 8.5 million
Listed on August 16, 2010


PUT Play Updates

Apple, Inc - AAPL - close 253.07 change +1.10 stop 267.50

Target(s): 240.00, 233.00, 226.00
Key Support/Resistance Areas: 266, 258, 256, 246, 240, 231, 235
Time Frame: Several weeks

Comments:
8/18: AAPL double topped with yesterday's highs and is coming ever so close to our target to enter short positions. I like this short set-up but the more I think about it the more I think AAPL will make a run at closing the gap lower from 8/10 to 8/11. The stock's 50-day and 20-day SMA's are right there as well, along with its downtrend line. As such, I am going to adjust our entry in this position and push the recommended option out to October. Lets raise our trigger to enter short positions to $257.00. I expect to get filled on this sometime before the end of Monday's or Tuesday's session. Patience should pay off for us as I am looking for AAPL to make a run down towards its 200-day SMA.

8/17: AAPL came within 37 cents of our $255 trigger to enter short positions and then closed the day about $3 lower. Let's see how things play out in the coming days. I believe we will get triggered.

8/16: AAPL closed -0.60% lower while the broader market was relatively flat. Our triggers to enter short positions were not hit. I want remove the trigger to enter short positions on weakness at $245.95 because I do not want to get caught in a short lived dip. The market looks ready to bounce and AAPL should also bounce. If it does I like short positions in AAPL at $255 which is just below the 20 and 50-day SMA's and its recent down trend line. I am also going to suggest we change the strike to the September $240 put which should go for $3.20 at our higher trigger. My comments from below remain the same.

8/14: AAPL has been in a fuzzy cloud recently and I believe it looks vulnerable at these levels. Recent reports on smart phone market share point to the Android capturing 18% market share compared to Apple's 14%. Technically, AAPL had a daily and weekly close below its long term upward trend from its March 2009 lows for the first time this past week. I believe AAPL should test its 200-day SMA which is below our two most conservative targets. I also think this is a good hedge against some of our long positions in the model portfolio. I suggest we initiate short positions in AAPL on strength if it trades to $255 or on weakness at $245.95. This is a position that I suggest being quick to tighten stops and/or take profits.

UPDATED: An alternative strategy readers may consider on a short AAPL position is to buy a PUT spread. For example, buy the October $240 PUTS (current ask $5.05) and sell the October $210 PUTS (current ask $2.10) to finance the cost. This is a well defined risk strategy where your max loss is $293 (the amount you paid for the spread) and your max gain is $1,707 if AAPL closes at $210 at expiration.

Suggested Position: Buy October $230.00 PUT if AAPL trades to $257.00, current ask $5.05, estimated ask at entry $4.15

Entry on August xx
Earnings: 10/21/10 (unconfirmed)
Average Daily Volume: 23 million
Listed on August 14, 2010


Occidental Petrol. - OXY - close: 75.62 change: -1.21 stop: 81.05

Target(s): 74.00, 71.50, 67.50
Key Support/Resistance Areas: 75-74.00, 70.00, 65.00
Current Gain/Loss: N/A
Time Frame: Several Weeks
New Positions: Yes, trigger at $77.50

Comments:
8/18: OXY closed down -1.57% on the day and can't get out of its own way. The stock continues to look vulnerable. Let's keep our $77.50 trigger and see if we can get filled in the coming days. Otherwise, we'll most likely drop the play.

8/17: We are also getting close with our short trigger at $77.50 in OXY as the stock came within 35 cents of triggering our entry. Let's be patient and take advantage of any further strength.

8/16: Its a good thing we removed our lower trigger to enter positions as OXY hit $73.90 and bounced over $2 into the close. I'm looking for the stock to bounce a little more and suggest we initiate short positions at $77.50. We've chosen a further out of the money option than normal to limit risk.

8/14: Hope is not a good strategy when you are in a position, but I suppose it's OK if you're not in yet. I sure hope OXY bounces to $77.50 so our trigger to enter short positions is reached. All we want is a bounce in the stock so we can exploit it. There is so much overhead congestion, moving averages, trend lines, etc. to keep this stock in check. I want to remove the lower trigger to enter for now. If OXY breaks down prior to bouncing the stock could reverse on us so I don't want to get trapped. I like the short set up on strength and suggest looking for a quick move down to the adjusted targets above. I will also add that OXY could bounce higher than $77.50. It really just depends on the strength in the oil sector and how far the broader market can bounce. A bounce much over $79.00 doesn't seem likely.

Suggested Position: Buy September $70.00 PUT, current ask $0.99, estimated ask at entry $0.65

Entry on August XX
Earnings Date 10/21/10 (unconfirmed)
Average Daily Volume 4.4 million
Listed on August 7th, 2010


Procter & Gamble - PG - close: 60.75 change: +0.46 stop: 63.26

Target(s): 59.50 (hit), 59.20, 58.05, 57.25
Key Support/Resistance Areas: 59.00, 61.00
Current Gain/Loss: -25%
Time Frame: 2 to 3 weeks
New Positions: Yes, on strength

Comments:
8/18: PG gained 46 cents today and remains below all of its moving averages. If there is broader market weakness our targets should be reached again. Our gains from early in the week have turned into losses. My comments from below have not changed. All of the above targets are still valid and I suggest readers take profits (or at least protect them) if they are reached again.

8/17: Our +44% gains in PG were evaporated with today's strength. This is an example of how important it is to protect profits. All of the above targets are still valid and I suggest readers take profits (or at least protect them) if they are reached again.

8/16: I want to raise our second target to $59.20 to take profits in PG. Our target of $59.50 was hit in early trading today and this position could have been closed for a +70% gain in early trading. don't want this to turn into a loser and suggest readers begin looking for a exit. The broader market looks like it wants to bounce and the time value of our PG options could begin suffer as time is not on our side. $59.50 is still a valid target and where stops should be tightened to protect profits if PG shows any weakness in the coming days.

8/14: Rallies in PG keep getting sold into. We have a nice gain in this position and it could turn into a big winner if PG breaks below $59.00 which is below our 2nd target. I'm inclined to hang on to this position to see if the selling begins, however, that probably means enduring a bounce this week. PG is also a defensive play so the decline in the stock may take a while. If we get down to $59.05 I suggest tightening stops too see if we can get more out of the trade. If we do get to this level we should have close to a +100% gain. That's hard to beat.

Current Position: Long September $57.50 PUT, entry was at $0.36

Entry on August 10, 2010
Earnings Date 10/28/10 (unconfirmed)
Average Daily Volume 2.5 million
Listed on August 7th, 2010