Editor's Note:
Tomorrow should give us a chance to take some profits, regardless of market direction. I suggest booking them.

Current Portfolio:


CALL Play Updates

Cameron International - CAM - close 36.28 change -0.05 stop 35.45

Target(s): 36.95, 37.85, 38.40,
Key Support/Resistance Areas: 45.00, 42.50, 41.00, 38.75, 36.00
Current Gain/Loss: -68%
Time Frame: Several weeks
New Positions: Yes

Comments:
8/26: It looked like CAM was headed higher today but the stock reversed and posted a minor loss. It outperformed the broader market signaling relative strength but it can't keep bucking the trend. My suggestion remains the same which is to use strength in the stock and consider exiting positions as time decay is starting to affect the option premium. CAM printed $37.15 today which is 87 cents higher than the closing price. $36.95 is a logical target to cut losses or tighten stops.

8/25: CAM came close to hitting our stop this morning but reversed. My comments haven't changed much. I suggest readers use strength in the stock and consider exiting positions as time decay will start to affect the option premium. Our targets were adjusted yesterday and remain the same except I have lowered the first target by 10 cents.

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 61.77 change -0.02 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: -22%
Time Frame: Several weeks
New Positions: Yes, with a tight stop

Comments:
8/26: FTI closed just about flat on the day which is much better than the broader market. The bad news is FTI closed $1.50 off of its highs. The stock was up +2.5% early before imploding the remainder of the day. If the market breaks down tomorrow nimble traders may want to exit FTI early to preserve capital. Our official stop is below the 50 and 200-day SMA's but a tighter stop could be placed just under the lows of from Tue and Wed, perhaps at $59.90 which is also below the 50-day SMA. My concern with this is if we get a quick spike down stocks could just as easily reverse after they have taken out a bunch of stops.

8/25: FTI made a double bottom with Tuesday's lows and closed near its highs of the day. Broader market strength will do wonders for our position and the fact that crude oil gained today on bearish inventory data should be good for FTI. But now we need follow through. This is not a bad spot to open new positions with tight stops.

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


Panera Bread Co. - PNRA - close: 79.15 change: +0.22 stop: 72.40

Target(s): 77.00, 78.50
Key Support/Resistance Areas: 73.00, 76.00, 80.00, 85.00, 88.50
Current Gain/Loss: N/A
Time Frame: 2 to 3 weeks
New Positions: Yes, trigger $74.75

Comments:
8/26: PNRA is hanging tough in a bad tape. Nimble traders could buy the stock a breakout at $80.75 but I would prefer to get it on weakness should there be larger sell-off in the broader market. We'll keep the trigger at $74.75.

8/25: I suggest we change the strategy on this play and initiate long positions in PNRA on weakness rather than strength. There is no doubt PNRA is a relative strong performer but trading it against the broader market trend on a break out is higher risk. I suggest we keep this active into next week and use a trigger of $74.75 to initiate long positions. This is near the 200-day SMA and we could easily get there if the market sells off in the coming days. I've also updated the suggested option to October. More nimble traders could consider a position on a breakout but I like the risk/reward set-up better on weakness for a swing trade.

8/21: This is a relative strength play. PNRA has been out performing the market the past few days. Now the stock is testing resistance near $80.00. The high on Aug. 18th was $80.56. I am suggesting we buy calls at $80.75 and target a move toward resistance at $85.00 (exit target $84.90). This should be a relatively short-term play if we are triggered.

Suggested Position: Buy October $80.00 CALL, estimated ask at entry $1.75

Entry on August XX
Earnings Date 10/27/10
Average Daily Volume 562,000
Listed on August 21, 2010


Rackspace Hosting, Inc - RAX - close 19.34 change -0.21 stop 17.95

Target(s): 20.75, 21.30, 23.00
Key Support/Resistance Areas: 23.50, 21.40, 20.00, 19.00, 18.00
Current Gain/Loss: -15%
Time Frame: 3 to 5 weeks
New Positions: Yes

Comments:
8/26: RAX printed highs not seen since April and briefly broke out of its ascending triangle. My comments from the play release remain the same. Let's stick with the plan. Readers might want to consider new positions if RAX prints $19.00.

8/25: M&A activity is heating up in the tech sector. Dell and Hewlett-Packard are in a bidding war over a 3Par at a huge 160% premium over its closing price just a couple of weeks ago. Whoever loses the bid will most likely be looking for a similar firm to acquire and there seems to be none better than RAX. Regardless of whether RAX fits the bill for an acquisition they are in the red hot cloud computing industry which is outperforming the broader market. I suggest we take advantage of the momentum and initiate long positions now. Technically, RAX is above all of its moving averages and is forming an ascending triangle. Our stop will be $17.95 and I have three targets with the most aggressive being the YTD highs near $23.00. I envision this trade lasting several weeks or more but if the stock surges we won't hesitate to book profits.

Current Position: Buy December $21.00 CALL, entry was at $1.40

Entry on August 25, 2010
Earnings 11/9/2010 (unconfirmed)
Average Daily Volume: 1.75 million
Listed on August 25, 2010


UnitedHealth Group Inc - UNH - close 31.85 change -0.11 stop 31.33 *NEW*

Target(s): 31.50 (hit), 31.90 (hit), 32.25, 33.15
Key Support/Resistance Areas: 35.00, 34.40, 33.50, 31.50
Current Gain/Loss: -30%
Time Frame: 1 to 2 weeks
New Positions: No

Comments:
8/26: UNH came within 6 cents of reaching our $32.45 target so it has been lowered to $32.25. Regardless of the target I think the best strategy with UNH is to exit at the open tomorrow. I am cautious of holding this position through the weekend and would rather preserve capital. If you are a more nimble trader who can monitor the position, I suggest keeping a tight stop to see if UNH moves higher tomorrow.

8/25: UNH made a comeback today gaining nearly +3%. I'm still looking for an exit and have tightened the stop to $31.33. I've also narrowed our next target to $32.45 and would be inclined to exit if it is hit. This should get us to breakeven or better on the trade.

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

Abercrombie & Fitch - ANF - close 35.25 change -0.35 stop 38.40

Target(s): 33.25, 31.50
Key Support/Resistance Areas: 38.20, 37.25, 32.75, 34.00, 30.50
Current Gain/Loss: -5%
Time Frame: Several weeks
New Positions: Yes

Comments:
8/26: ANF traded in a tight range today so there is not much to report. Our plan remains the same except I have raised the first target to $33.25.

8/25: We are short ANF and I am expecting a move down to $33.00 and eventually $31.50. The broader market needs to cooperate and I think any bounces will be will be short lived. ANF has a lot of overhead resistance to keep bounces in check. My comments below remain valid.

8/24: We are back with a consumer name in the retail space. Retailers are weak and ANF looks ready for a drop if the broader market cooperates. This company is one of the more bloated retail names out there and trades at high PE ratio of 26. Technically the stock has broken out of a bear flag that formed in July and August off of the decline from its April highs. ANF is also consolidating below its broken trend line from the 11/08 lows (see dashed line) and volume is picking up which indicates sellers are overwhelming buyers. I suggest we initiate short positions now or on any strength in the stock. We'll use stop of $38.40. Our targets are $33.00 and $31.50.

Current Position: Long October $34.00 PUT, entry was at $2.10

Entry on August 25, 2010
Earnings: 11/11/10 (unconfirmed)
Average Daily Volume: 3.5 million
Listed on August 24, 2010


Apple, Inc - AAPL - close 240.28 change -2.61 stop 256.50

Target(s): 240.00 (hit), 233.00, 226.00
Key Support/Resistance Areas: 266, 258, 256, 246, 240, 231, 235
Current Gain/Loss: +10%
Time Frame: Several weeks
New Positions: Yes

Comments:
8/26: AAPL gapped higher at the open today and filled its gap lower from Tuesday as I suspected in yesterday's updates. The stock was immediately sold the entire day and closed more than $5 off of its high. Sellers are clearly overwhelming the buyers right now. Our targets are in the right place and AAPL could hit them fast if we get a sell off in the broader market. Be ready to take profits or tighten stops to protect them.

8/25: If the broader market bounces here AAPL will most likely rally up to fill the gap down from yesterday. But I think bounces will be short lived so I suggest we be patient and be ready to take profits when AAPL approaches our targets.

Current Position: Long October $230.00 PUT, entry was at $6.90

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


FASTENAL Co. - FAST - close: 45.49 change: -0.41 stop: 50.40

Target(s): 44.80, 43.50, 41.00
Key Support/Resistance Areas: 50.00, 48-47, 200-dma, 40.00
Current Gain/Loss: +14%
Time Frame: 3 to 4 weeks
New Positions: Yes

Comments:
8/26: FAST gapped higher today as well but the strength was sold into the entire day. Our first two targets are the primary targets where I suggest taking profits, or tightening stops to protect them, especially if the stock heads lower prior to bouncing.

8/25: FAST closed down despite a rally off of the lows in the broader market. This is relative weakness and when things turn back down FAST should approach our targets quickly.

8/24: Our short positions were triggered at $46.50 in FAST this morning. The stock is well below its 200-day SMA and may bounce to retest it from below. This may provide another entry point. I've added $44.80 as a near term target and is an area to consider taking profits or tightening stops to protect them.

Current Position: Long November $45.00 PUT, entry was at $2.50

Entry on August 24, 2010
Earnings Date 10/12/10
Average Daily Volume = 839,000
Listed on August 19, 2010


NUCOR Corp. - NUE - close 36.38 change -0.30 stop 40.55

Target(s): 36.05 (hit), 35.25, 31.90
Key Support/Resistance Areas: 43.00, 40.30, 37.00, 35.00
Option Current Gain/Loss: +38%
Time Frame: 4 to 6 weeks
New Positions: Yes

Comments:
8/26: Yet another stock that gapped higher and was sold into the entire day. NUE traded to $35.71 on Tuesday and if the stock heads down to this level it could be viewed as a double bottom and bounce. Readers may want to consider taking profits at this level or tightening stops to protect them.

8/25: NUE opened lower and quickly traded to our $36.05 target. Positions could have been closed at $1.55 which would have been a +60% gain. NUE printed another 52-week low and continues to look vulnerable so I stick with the plan and give this some time to work, but we may have to be patient.

8/24: NUE closed at a new 52-week low today and looks vulnerable. We now have a +33% gain so protecting profits is suggested. Ultimately NUE looks headed towards our $35.25 target but taking profits on the way is a good idea. I'm going to add $36.05 as an immediate 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: 72.23 change: -0.67 stop: 78.51

Target(s): 71.60, 70.25, 67.50
Key Support/Resistance Areas: 75-74.00, 70.00, 65.00
Current Gain/Loss: +9%
Time Frame: Several Weeks
New Positions: Yes, on strength

Comments:
8/26: OXY looks weak but it also looks oversold. $71.60 is prior resistance level from June 2009 and a prior support level from August 2009. That's why I have this target. Exiting positions at this level should produce a +20% gain. I've also added $70.25 as a target which is a support area from August 2008 and also happens to be the stock's 100-week SMA. I'm cautious on squeezing too much out of an oversold stock and suggest readers be defensive to protect gains.

8/25: Finally, OXY triggered our entry. I suggest we keep our target relatively tight on this trade and exit positions or tighten stops to protect profits if OXY hits our first target of $71.60. This is just above the 52-week low and the stock could bounce. I have also heard many of the talking heads on TV mention OXY as a buy, however, the sellers are in control right now. But the lower the stock goes it may interest buyers and I don't want to caught shorting a potential bottom.

8/23 & 8/24: 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.

Current Position: Long OXY November $70.00 PUT, entry was at $3.45

Entry on August 25, 2010
Earnings Date 10/21/10 (unconfirmed)
Average Daily Volume 4.4 million
Listed on August 7th, 2010


Procter & Gamble - PG - close: 59.54 change: -0.14 stop: 63.26

Target(s): 59.50 (hit), 59.20, 58.75, 58.05
Key Support/Resistance Areas: 59.00, 61.00
Current Gain/Loss: -15%
Time Frame: 2 to 3 weeks
New Positions: Yes, with November options

Comments:
8/26: Nothing much has changed with PG. The stock refuses to breakdown. We are near breakeven on the trade and I still suggest looking for an exit to prevent accelerating time decay. If we get a sell-off tomorrow that will be our opportunity. Otherwise, I suggest we close this position at the close. I've added $58.75 as a target on sell-off. This is near prior resistance from September and October 2009.

8/24 & 8/25: My comments from below remain the same. I suggest readers begin exit PG to prevent time decay from accelerating. Another strategy would be to roll current positions into the November strikes and give this time to work.

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.

8/19: 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