Current Portfolio:


CALL Play Updates

First Solar Inc. - FSLR - close 145.07 change +1.68 stop 135.95

Target(s): 145.00, 147.50, 149.75
Key Support/Resistance Areas: 137.50, 140.00, 145.00, 147.50, 150.00
Current Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see entry point below

Comments:
10/20 & 10/21: My comments from 10/19 remain the same. We want to launch bullish positions on a pullback to trend line support and prior resistance from July, then target a move back towards its recent highs.

10/19: Raymond James cut FSLR to Market Perform from Outperform in the pre-market this morning. The stock sold off about -2% and there could be more to come. However, FSLR continues to look bullish and has solid support at $140 which is near the primary upward trend line and will provide a solid entry point. As such, I would like to lower the trigger to $140.50 and target a move up towards $150.

10/18: FSLR went in the opposite direction of our trigger to enter long positions. Let's remain patient and keep our trigger at $142.50.

10/16: Shares of FSLR have been marching higher after producing a huge (bullish) double bottom pattern with the lows in February and June. Now the stock has created a more bullish pattern of rally, consolidate, rally, consolidate. After two weeks of correcting traders are now buying the dip in FLSR near support in the $137-140 zone.

Aggressive traders could launch positions right now following Friday's bounce from $140. However, I suspect we'll see a better entry point on a minor dip this week. I'm suggesting we use a trigger at $142.50 to buy calls. If triggered we'll use a wide stop loss at $135.95 since FSLR can be so volatile (as an alternative more conservative traders could put their stop closer to $140). If triggered our first target is $145.00. Our second target is $147.50. Our final target is $149.75. More aggressive traders could aim for the $160 area. FYI: Investors should note that FSLR is due to report earnings on October 28th. Earnings reports can significantly raise our risk.

Suggested Position:

Trigger to buy calls @ $140.50.

BUY the November $150 calls.

Entry on October xxth at $ xx.xx
Earnings Date 10/28/10 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on October 16th, 2010


Genco Shipping & Trading, LTD - GNK - close 16.00 change -0.04 stop 15.50

Target(s): 16.10 (hit), 16.90, 17.70, 18.05
Key Support/Resistance Areas: 18.25, 17.75, 16.90, 16.22, 15.75
Current Option Gain/Loss: -56.0%
Time Frame: 1 to 3 weeks
New Positions: Yes

Comments:
10.21: GNK is struggling with its 20-day SMA overhead. My comments below remain the same.

10/20: GNK did manage a bounce up to $16.15 which is where the stock found resistance. The problem is we don't have a good reference point to tighten the stop. Let's see how much more we can get out of the position and keep looking for areas to move up the stop. $16.22 is resistance and then a gap fill near $16.40.

10/19: GNK fell apart today and we are close to being stopped out. GNK is involved in shipping commodities and the news out of China is affecting the entire space. It is too early to tell whether this is a one day event or a knee jerk reaction. Technically, the stock has closed below its moving averages and looks to be headed lower. If GNK can manage a bounce back up towards $16.10 I suggest closing positions or tightening stops to protect capital.

Current Position: Long November $17.00 CALL, entry was at $0.80

Note: Readers who want to give this more time to work may want to consider buying the JAN 2011 $17.50 CALLS

Entry on October 12, 2010
Earnings 11/1/2010 (unconfirmed)
Average Daily Volume: 1.2 million
Listed on October 11, 2010


Humana Inc. - HUM - close: 56.27 change: +0.27 stop: 49.75

Target(s): 54.95, 57.50, 60.00
Key Support/Resistance Areas: 50.00, 51.00, 53.50, 55.00
Current Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see entry point below

Comments:
10?21: Not much changed here. We need to be patient and not chase HUM higher. There is solid support near $52.50 which is our trigger to launch bullish positions.

10/20: HUM is running away from us as the stock took back all of yesterday's losses and printed a new 52-week high today. Let's keep the trigger in place and use a dip to $52.50 as a buying opportunity. Nothing has changed from the released play on 10/16 listed below. Should we get triggered I suggest buying the January options to give this some time to work.

10/16: Check out the HMO healthcare index. Investor sentiment for the healthcare sector has changed. Fears about the healthcare reform seem to have faded and now the sector is breaking out to new three-year highs. HUM is helping lead the way. Shares have been very strong this past week with a rally toward the top of its bullish channel. We want to hop on board but wait for a better entry point.

I am suggesting readers use a trigger to buy calls at $52.50. More cautious traders could look for a dip closer $51.00 but I don't think we'll see HUM pullback that low. If we are triggered at $52.50 I'm suggesting a stop loss at $49.75. Our first target is $54.90. Our second target is $57.25. Our third, longer-term target is $59.00. Time frame is six to eight weeks. Technical traders will note that the P&F chart is bullish with a $66 target. FYI: HUM is due to report earnings on November 1st. We normally want to avoid holding over earnings but I would make an exception for HUM.

Suggested Position:

Trigger to buy calls at $52.50

BUY the 2011 January $55 calls.

Entry on October xxth at $ xx.xx
Earnings Date 11/01/10 (confirmed)
Average Daily Volume = 2.1 million
Listed on October 16th, 2010


Jeffries Group, Inc - JEF - close 24.15 change +0.32 stop 22.75

Target(s): 25.10, 25.75
Key Support/Resistance Areas: 25.85, 25.25, 24.25, 23.50, 23.00
Current Gain/Loss: +22%
Time Frame: 3 to 4 weeks
New Positions: Yes

Comments:
10/21: JEF gapped higher at open near our trigger to launch bullish positions so we are long December $24 calls. The stock surged higher but closed well off of its highs. I like the price action in JEF and expect further upside if the broader market cooperates. I would view dips as buying opportunities.

10/20: JEF closed above its 50-day SMA for the first time in a month which should provide support on a pullback. We are likely going to get triggered to launch bullish positions tomorrow on a breakout. Readers may want to consider an entry on a dip to the 50-day (currently $23.50) as the stock keeps getting bought, but I would keep a tight leash on the trade.

10/19: Investment Banks are beginning to trade well, especially those that have little risk exposure to mortgage backed securities like many of the money center banks. JEF should do well in this era of corporate advisory services and M&A activity. JEF could even be a takeover candidate themselves. I like JEF to trade higher as long as the stock breaks out above today's highs. Technically, The volume patterns look good and JEF has closed above short term resistance from the past couple of weeks at $23.50 for two consecutive days. I suggest we enter long positions if the stock trades to $23.91 which is above today's highs. Our stop will be $22.75 and our targets are near the September and August highs, which are +5% and +7.5% from our trigger.

Trigger: $23.91

Suggested Position: Long December $24.00 CALL, entry was at $1.10

Entry on October xx
Earnings Date 1/20/11 (unconfirmed)
Average Daily Volume: 1.1 million
Listed on October 19, 2010


Sears Holdings Corp - SHLD - close 76.01 change +0.40 stop 71.50 *NEW*

Target(s): 81.50, 85.00, 88.00
Key Support/Resistance Areas: 90.00, 85.00, 82.00, 76.00, 73.00
Current Gain/Loss: -13%
Time Frame: 3 to 4 weeks
New Positions: Yes

Comments:
10/21: SHLD hit our trigger to enter long positions and surged $1.80 higher. Unfortunately, the breakout did not last and the stock plummeted to its lows of the day. Our options expire in December so time is on our side for now, however, I am concerned with the price action not only in SHLD, but also the broader market. There is a lot of indecision and it is being confirmed by the intraday volatility (up and down). There is high short interest in the stock so this may spark further gains if the broader market continues higher. I suggest being ready to take profits or tighten stops to protect them if SHLD moves higher. I've moved the stop up slightly.

10/20: We are getting closer to our trigger which may happen tomorrow or Friday. My comments bellow remain valid.

10/19: SHLD held up very well today considering the deep broad market sell-off. I suggest we play this conservative and keep the set-up in place, however, a dip down towards $73.00 also offers a compelling set-up. This is near the 20-day SMA and upward trend line that started on 8/24. The problem is SHLD could blow right through this level if the broader market correction picks up steam. We may consider a lower trigger in the coming days but we have to see the price action first.

10/18: Shares of SHLD have been trending higher since their lows near $60.00 back in August. The stock broke out of a multi-week consolidation area that began on 9/27 and looks poised for a continued move higher. Add in the fact that SHLD has a high short interest ratio and it could mean a short squeeze is on the horizon. There is also a lot of open air above $77.00 which means a breakout higher could quickly gain momentum. I suggest readers initiate long positions with a trigger $77.10 which is well above the past few day's highs. This allows SHLD to prove that it can make a run higher and should be the catalyst for a move towards $82.00, or higher. Our initial stop will be $70.75 and it will be adjusted once we are in the position.

Trigger to enter long positions: $77.10 Suggested Position: Long December $80.00 CALL, entry was at $3.40

Entry on October xxth
Earnings Date 11/18/10 (unconfirmed)
Average Daily Volume = 831,000
Listed on October 16th, 2010


PUT Play Updates

Alliant Techsystems - ATK - close 76.02 change +2.05 stop 76.25

Target(s): 72.25, 71.80, 70.50
Key Support/Resistance Areas: 76.00, 74.00, 72.00, 71.25, 70.00
Current Gain/Loss: -65%
Time Frame: 1 to 2 weeks
New Positions: Yes, with tight stops

Comments:
10/21: ATK has broken out and our set-up has failed. The tsock surged +2.7% today which may have been due to a favorable earnings report from one of its peers. ATK came within 1 penny of hitting our stop today so we are on the verge of being taken out. Let's raise the stop by 8 cents to $76.33 just in case ATK flashes a higher price tomorrow. Otherwise we will step aside and take the loss. ATK will eventually trade to its 50-day SMA but it just may not do it now as we have been anticipating.

10/20: There are not many changes to the comments below. We are getting whipsawed in a fairly tight range and ATK refuses to break lower as we have anticipated, which is when we want to be closing positions or tightening stops. I see no reason why ATK won't trade down to its 50-day SMA.

10/19: ATK lost -1.6% today and the stock looks vulnerable here. The stock broke a short term upward trend line, closed below the 20-day SMA, and closed at its lowest level since 10/4. The selling in this stock should continue in the coming days which readers should use as an opportunity to exit positions or tighten stops. I adjusted the targets slightly to account for the rising 50-day SMA.

Current Position: Long November $70.00 PUT, entry was at $1.45

Entry on October 4, 2010
Earnings: 11/4/2010 (unconfirmed)
Average Daily Volume: 310,000
Listed on October 2, 2010


Fastenal Co. - FAST - close: 52.90 change: +0.50 stop: 54.25

Target(s): 50.75, 50.10, 48.25, maybe lower
Key Support/Resistance Areas: 55.00, 52.00, 50.00, 48,00,
Current Gain/Loss: -45%
Time Frame: 3 to 4 weeks
New Positions: Yes

Comments:
10/21: Fast has bounced up to its 20-day SMA from below and has yet to take out highs from the past two weeks. We are most likely going to need a more meaningful healthy broader market correction for the position to get back into positive territory.

10/20: FAST rolled over after their earnings report and has made a series of lower lows and lower highs over the past 8 trading sessions. What has me concerned is this may be forming a bearish descending wedge pattern. The bottom line is we are most likely going to need a more severe broader market correction for this trade to turn into a profitable one. A move the 50-day SMA should give us +35% gain. All of my comments below remain the same.

10/19: FAST held up relatively well today, maybe because of the strong housing starts data released in the pre-market. However, new permits went in the wrong direction. The 50 & 100-day SMA are near the first target. This should give us a +35% gain. I suggest using this area to either take profits or tighten stops to protect them. If this level breaks keep an eye on $50.00 as the next support level.

10/16: (James) Traders were disappointed with FAST's recent earnings report and guidance. Shares had soared from $45 to $55 in just a few weeks and the stock plunged on the earnings news (Oct. 12th). The bounce attempts this week were also sold sharply and FAST looks poised for a much deeper correction.

I am suggesting new bearish positions now at current levels. We'll use a stop loss at $54.25. Our first target is 50.75 near the simple 50-dma. Our second target is $48.25, but watch for potential support at the rising 200-dma. It is possible that FAST actually sinks lower since the larger pattern on the weekly chart is one of lower highs and lower lows.

Current Position: Long November $50.00 PUT, entry was at $1.00

Entry on October 18, 2010
Earnings Date 10/12/10
Average Daily Volume = 1.0 million
Listed on October 16, 2010


Hartford Fin. Serv. Group - HIG - close 24.20 change +0.46 stop 24.70

Target(s): 22.40, 22.05
Key Support/Resistance Areas: 24.60, 23.70, 22.85, 22.25, 21.85
Time Frame: 1 to 2 weeks

Comments:
10/21: This morning UBS reiterated their buy rating for HIG and the stock gapped higher at the open and surged up to its 200-day SMA. And that is when the selling began which pressured prices back to their lows of the day. We are waiting to be triggered on a break down below the prior two days lows which will also be a break of trend line support. However, more nimble traders may want to try a short position at current levels with a tighter stop overhead.

10/20: We are adding a short candidate to the portfolio to balance our positions a bit. The rally in HIG off of the August lows has failed at the 200-day SMA and I believe there is more downside to come. The stock is finding support at its 20-day SMA and I suggest we initiate short positions at $23.32 which is below Tuesday's low. Our first target is almost $1 lower near the 50-day SMA and our second target is near the swing low on 9/23. Our initial stop is above the 200-day SMA at $24.70 but it will be adjusted as the trade develops. This has the potential to be a quick trade so have your orders ready or be prepared to protect profits if HIG breaks lower.

Suggested Position: Buy December $22.50 PUT if HIG trades to $23.32, current ask $1.05

Entry on October xx
Earnings: 11/2/2010 (unconfirmed)
Average Daily Volume: 7 million
Listed on October 20, 2010


PNC Financial - PNC - close 53.56 change +0.82 stop 54.92

Target(s): 51.05 (hit), 50.35, 49.50, 48.75
Key Support/Resistance Areas: 54.50, 53.50, 50.50, 49.50, 48.75, 47.00
Current Gain/Loss: -65%
Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
10/21: PNC's "adjusted" earnings beat estimates but their revenues missed. The CEO made cautious comments but it didn't matter, investors gobbled up the stock and PNC closed +1.5% on the day. It is a tough call with earnings and considering the reaction to many reports I thought holding the position was the right call. Obviously it was the wrong call. If the broader market continues its path higher we will likely get stopped out, possibly tomorrow. We're not out of the position yet though and PNC could easily turn lower here. Our stop is in place.

10/19 & 10/20: Something is holding PNC up and I can not figure out why, other than it may be due to upcoming earnings. The stock is set to report earnings on Thursday before the bell so if you are not comfortable holding positions you need to exit tomorrow before the bell. Holding positions is an aggressive strategy that may or may not work. Lightening up on positions is also another option. The news out of the banking sector today has me inclined to hold positions, however, I still advocate using weakness to exit positions and preserve capital. Our stop is overhead.

10/18: After reaching our first target on Thursday and coming close to our second target on Friday, PNC had a snap back rally today and gained more than +3% as banks were the strongest performing sector. PNC remains below its 50-day SMA and primary downtrend line so the bearish case remains in tact. Launching new positions at these levels makes a lot of sense for a quick trade lower, but the broader market needs to correct along side PNC for it to be successful. Readers with current positions should use weakness to close positions. $50.35 and $49.50 are my primary targets.

Current Position: Long November $48.00 PUT, entry was at $1.26

Entry on September 30, 2010
Earnings: 10/21/2010 (unconfirmed)
Average Daily Volume: 5 million
Listed on September 29, 2010


CLOSED BULLISH PLAYS

Dresser-Rand Group - DRC - close 37.76 change +0.06 stop 36.15

Target(s): 38.15 (hit), 38.80, 39.95
Key Support/Resistance Areas: 42.00, 40.00, 39.15, 37.50, 36.30
Final Gain/Loss: -14.28%
Time Frame: 2 to 3 weeks
New Positions: No

Comments:
10/21: We used the strength this morning as our opportunity to close positions per the comments below. We are flat the position for a relatively small loss. The bullish case remains with DRC but I urge readers to use caution as the broader market feels a little top heavy and ready for a more meaningful healthy correction. Stops should probably be moved up to the $37.00 area which is below the 50-day SMA. Time decay and a volatility crush hurt our option positions in DRC as the stock was almost +2% higher at our exit target compared to our entry.

10/20: DRC traded in tight range and is still above its 20 & 50-day SMA's, and is maintaining the upward trend line that began on 8/25. Readers may want to consider tighter stops at $37.40 (5 cents below Tuesday's low) or $36.90. Personally, I would use $36.90 which is below the important aforementioned support levels. I've adjusted the targets and suggest readers continue to use strength to exit positions or tighten stops to protect capital.

10/19: The oil services sector took a hit today as the group lost more than -3%. DRC fared a little better but our position has gone from a +25% gain to a -20% loss. The Peoples Bank of China unexpectedly rose interest rates which caused the US Dollar to surge higher, and the whole commodity sector took a lambasting. It is too early to tell whether today's sell-off in commodities is the start of a bigger decline or a knee jerk reaction. Technically, DRC is still above its 20 & 50-day SMA's and is maintaining an upward trend line that began on 8/25. Readers may want to consider tighter stops at $37.40 (5 cents below today's low) or $36.90. Personally, I would use $36.90 which is below the important aforementioned support levels. I've adjusted the targets and suggest readers continue to use strength to exit positions or tighten stops to protect capital.

Closed Position: Long November $40.00 CALL at $0.60, entry was at $0.70

Annotated Chart:

Entry on October 6, 2010
Earnings 10/27/2010 (unconfirmed)
Average Daily Volume: 570,000
Listed on October 5, 2010


Thompson Creek Metals - TC - close 10.59 change +0.30 stop 10.45

Target(s): 11.10 (hit), 11.75 (hit), 12.40
Key Support/Resistance Areas: 12.60, 11.80, 11.00, 10.55
Final Gain/Loss: -55%
Time Frame: 1 to 3 weeks
New Positions: Closed

Comments:
10/21: We have had some opportunities to close TC but did not, and we got hurt today as the stock hit our stop at $10.45. A stronger dollar is hurting the commodity space and it best to step aside. We are flat the positions for a disappointing loss.

10/20: TC recovered nicely but the stock still has a lot of work to do to regain the losses from Tuesday. We are in the same boat as GNK in that we do not have a good reference to raise the stop. Let's see how much more we can get out of the position and keep looking for areas to move up the stop. All of the targets above remain valid.

10/19: Ouch, the profit taking we feared came in full force today and our gain in TC was reversed into a loss. The Peoples Bank of China unexpectedly rose interest rates which caused the US Dollar to surge higher, and the whole commodity sector took a lambasting. It is too early to tell whether today's sell-off in commodities is the start of a bigger decline or a knee jerk reaction. Only time will tell but readers should use caution. TC found support at $10.64 today and also has support at $10.55. Our stop is just below these levels. I've added a lower target of $11.10 where readers should consider exiting positions or tightening stops on bounces.

Closed Position: Long November $11.00 CALL at $0.40, entry was at $0.90

Annotated Chart:

Entry on October 12, 2010
Earnings 10/4/2010 (unconfirmed)
Average Daily Volume: 1.7 million
Listed on October 9, 2010