Editor's Note:
Our model portfolio has several positions with options expiring in September. These positions will start to suffer from time decay so I have narrowed the targets and suggest readers begin to exit these positions.

Current Portfolio:


CALL Play Updates

Cameron International - CAM - close 36.88 change +0.04 stop 35.45

Target(s): 37.95, 38.40, 39.10, 39.50
Key Support/Resistance Areas: 45.00, 42.50, 41.00, 38.75, 36.00
Current Gain/Loss: -57%
Time Frame: Several weeks
New Positions: Yes

Comments:
8/22: CAM is maintaining its upward trend line from the 7/1 lows and closed above its 50-day SMA. The stock has support at this level and should bounce if the broader market cooperates. However, I'm concerned about time decay negatively affecting our option premium. I've adjusted our targets and I suggest readers begin to exit positions on any strength in CAM, or tighten stops to protect capital.

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 61.97 change +0.34 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: -13%
Time Frame: Several weeks
New Positions: No

Comments:
8/23: FTI is maintaining its upward trend line from its 6/8 lows and is above its 100-day, 200-day and 50-day SMA's. The stock's trend is up but we still need the broader market behind us if FTI is going to reach our targets. Our $65.25 target was hit on 8/17 and still remains valid.

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


Monsanto Co. - MON - close 57.32 change -0.41 stop 55.75

Target(s): 61.25, 63.75, 65.90,
Key Support/Resistance Areas: 66.00, 62.30, 58.50, 56.00
Current Gain/Loss: -31%
Time Frame: 1 to 3 weeks
New Positions: Yes

Comments:
8/23: MON is consolidating between its 50-day and 100-day SMA's. I remain bullish on the agriculture sector but broader strength would do wonders for our position. I've added $61.25 as an immediate target which is a good area to take profits or tighten stops to protect them.

Current Position: Long October $62.50 CALL, entry was at $1.65

Entry on August 19, 2010
Earnings Date 10/6/2010 (unconfirmed)
Average Daily Volume: 7.2 million
Listed on August 18, 2010


SPDR Gold Trust - GLD - close 119.78 change -0.19 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: +2.7%
Time Frame: Several weeks
New Positions: No

Comments:
8/18: I suggest readers begin to look for an exit in GLD to prevent time decay from eating away at our option premium. I've adjusted the targets above and suggest readers use these levels to take profits or tighten stops to protect them.

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 31.50 change -0.11 stop 30.35

Target(s): 32.10, 32.75, 33.15
Key Support/Resistance Areas: 35.00, 34.40, 33.50, 31.50
Current Gain/Loss: -44%
Time Frame: 1 to 2 weeks
New Positions: No

Comments:
8/23: UNH closed at the critical support level of $31.50 so it is do or die time for a bounce. Readers should consider exiting positions, especially if UNH begins to bounce. We have September options and need to begin to protect the time value remaining in them. I've adjusted the targets above.

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 245.80 change -3.84 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:
8/23: AAPL lost -1.54% (or $3.84). Our comments from the weekend remain the same except I believe more aggressive traders can short AAPL on any strength. We have two official entry points to buy puts - at a bounce near $254.00 (lowered $3) or at a breakdown at $244.00. If AAPL hits $244.00 we'll adjust the stop loss down to $256.00.

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 $254.00 or $244.00

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


FASTENAL Co. - FAST - close: 47.51 change: -0.50 stop: 50.40

Target(s): 43.50, 41.00
Key Support/Resistance Areas: 50.00, 48-47, 200-dma, 40.00
Time Frame: 3 to 4 weeks

Comments:
8/23: We are waiting to be triggered but more aggressive traders should still consider new bearish positions now or on any strength in the stock. Our trigger remains the same at $46.50 but I suggest the November options to limit time decay on this position.

8/21: FAST dipped toward support near $47.00 and bounced. That's why we have the trigger to buy puts at $46.50. More conservative traders could use a trigger at $46.00 instead. More aggressive traders could try and time an entry point on a failed rally near $50.00. There are no changes from my Thursday comments.

8/19: Investors are growing more and more worried that the U.S. economy is slowing down too fast. A weaker economy or a double-dip would be bad news for a company that sells construction supplies. Even though FAST blew away the earnings estimates back in July the stock has continued to build on a pattern of lower highs. Shares are now testing support near $48-47 and will soon test the simple 200-dma near $46.75.

Suggested Position: Buy November $45.00 PUT, current ask $2.15

Entry on August XX
Earnings Date 10/12/10
Average Daily Volume = 839,000
Listed on August 19, 2010


Intl. Bus. Machine - IBM - close 126.47 change -1.03 stop 130.51

Target(s): 123.50, 122.00
Key Support/Resistance Areas: 130.00, 127.00, 123.00, 121.00
Current Gain/Loss: +24%
Time Frame: 2 weeks
New Positions: Yes

Comments:
8/23: We are long IBM puts and are expecting a move down to the $123 level. The stock drifted lower the entire day and our position has gained +24%. I've adjusted our $123 target up 50 cents and added $122 as a more aggressive target. I suggest we take profits and/or tighten stops as IBM trades down to these levels.

8/21: IBM has been bouncing around the $132-120 zone for months. On a short-term basis the stock is rolling over and shares look ready to breakdown from a the current $130-127 trading range. I'm suggesting we buy puts now, ride the stock down toward $123.00. Then we can re-evaluate since it might be a good spot to consider switching directions and buying calls.

Current Position: Long September $125 PUT, entry was at $1.53

Entry on August 23, 2010
Earnings Date 10/18/10
Average Daily Volume = 5.4 million
Listed on August 21, 2010


NUCOR Corp. - NUE - close 37.76 change -0.61 stop 40.55

Target(s): 35.25, 31.90
Key Support/Resistance Areas: 43.00, 40.30, 37.00, 35.00
Option Current Gain/Loss: -4%
Time Frame: 4 to 6 weeks
New Positions: Yes

Comments:
8/23: We are looking for continued weakness in NUE and need to break below $36.95 which should get the stock moving towards our targets.

8/21: NUE gapped open lower at $38.29 (our entry point) and bounced from the $38.00 level intraday. I would still consider new positions at current levels or you can wait for another bounce toward $40 and its 50-dma.

8/19: After nearly a year of trading sideways in the $39-50 zone NUE has finally broken down. The oversold bounce has stalled near the $40 level and its descending 50-dma. The action today looks like another failed rally under resistance. I am suggesting we take advantage of this weakness with new put positions.

We'll start with a stop loss at $40.55. More aggressive traders may want to use a stop just over $41.00. Our first target is $35.25. Our longer-term target is $31.00 but honestly we may not be in the play that long. FYI: The Point & Figure chart is bearish and is forecasting a $26 target.

Current Position: Long October $35.00 PUT, entry was at $0.96

Entry on August 20, 2010
Earnings Date 10/21/10
Average Daily Volume = 2.9 million
Listed on August 19, 2010


Occidental Petrol. - OXY - close: 75.57 change: +0.51 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 or $73.50

Comments:
8/23: We are waiting for the adjusted strategy from the weekend to trigger our entry. All of the comments below remain the same. 8/21: There is no change from Thursday's update. Oil and the oil sector continue to look weak. Odds are growing that OXY will breakdown. We have two entry points. One possible entry is at $77.50. Another is at $73.50. If triggered at $73.50 we'll change the stop loss to $78.51. Plus we'll change the targets to $70.25 and $66.00 if triggered on the breakdown.

8/19: I am adjusting the strategy on this play. Instead of waiting for a bounce toward $77.50 (which still works as an entry point) I am adding a breakdown trigger to buy puts at $73.50. The recent low was $73.90 and so far traders have continued to buy OXY near support at $74.00. If we are triggered at $73.50 we'll move the stop loss down to $78.51. I'm adjusting our targets to $70.25 and $66.00 if triggered at $73.50. We can keep the bounce trigger to buy puts at $77.50, if hit we'll use a stop loss at $81.05.

Suggested Position: Buy November $70.00 PUT, current ask $2.72

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: 60.03 change: +0.05 stop: 63.26

Target(s): 59.50 (hit), 59.20, 58.05, 55.25
Key Support/Resistance Areas: 59.00, 61.00
Current Gain/Loss: -22%
Time Frame: 2 to 3 weeks
New Positions: Yes, with November options

Comments:
8/23: PG has a lot of support at $59.00 and our options will begin to suffer from time decay. PG looks like it has further room to the downside but time is not on our side. As such, I suggest readers begin to look for an exit using the targets listed above. Another strategy would be to roll current positions into the November strikes and give this time to work.

8/21: PG continues to bounce around the $59-61 trading range. There is no change from my Thursday comments. Readers can choose to buy puts near $61 or wait for a breakdown and confirmation of the trend with a drop under $59.00.

8/19: Shares of PG have been forming a top for over eight months now. If the stock breaks down under support near $59.00 it would forecast a drop toward $54.00. Readers can choose to open positions near $61-62 but I would prefer to see a breakdown under $59.00. Please note I have adjusted our exit targets to $58.05 and $55.25. FYI: If you launch new positions I would buy the Novembers.

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


CLOSED BULLISH PLAYS

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

Target(s): 27.20 (hit), 27.70 (hit), 28.20, 29.20
Key Support/Resistance Areas: 29.80, 28.24, 27.80, 26.80, 25.00
Current Gain/Loss: +37.8%
Time Frame: Several weeks
New Positions: Yes

Comments:
8/18: HGSI hit our second target of $27.70 which was the primary target given on 8/18 for exiting positions. Our gain is +37%. The stock appears to be backing off from its 200-day SMA and prior swing highs from June and early August. HGSI needs to break through the resistance areas listed above. For readers who still have positions I suggest beginning to look for a an exit to limit time decay.

Closed Position: Long September $28.00 CALL at $1.24, entry was at $0.90

Annotated Chart:

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