Current Portfolio:


CALL Play Updates

ATP Oil & Gas Corp - ATP - close 15.05 change +0.32 stop 13.75

Target(s): 16.20, 17.00, 17.90, and possibly higher
Key Support/Resistance Areas: 18.00, 17.00, 16.25, 14.75, 14.10
Current Gain/Loss: -5%
Time Frame: 1 to 3 weeks
New Positions: Yes

Comments:
10/25: ATPG hit our higher trigger of $15.11 to launch bullish positions. The stock has support at $14.75 and $14.15. If we get a broader market correction I would look to these areas to consider opening new positions. My comments below remain the same.

10/23: ATPG broke out of resistance from August on heavy volume on 10/11 & 10/12. Over the past week and a half the stock has drifted lower on light volume (a bullish sign) right into the prior resistance from August, which should now act as support. At the same time the stock has formed a bullish descending wedge pattern that could produce a powerful move higher if it breaks out. Also notice the converging 20-day and 200-day SMA's providing further support, along with an upward trend line from its August lows. Finally, there is a gap to fill down near $14.30 which also sets up a good bullish entry point. I suggest we launch bullish positions using a breakout (at $15.11) or gap fill (at $14.30). We'll keep a tight initial stop at $13.75 and it will be adjusted after our entry is triggered.

Suggested Position: Long December $16.00 CALL, entry was at $1.00

Entry on October 25, 2010
Earnings Date 11/4/2010 (unconfirmed)
Average Daily Volume: 2.7 million
Listed on October 23, 2010


First Solar Inc. - FSLR - close 147.15 change +1.60 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:
10/23 & 10/25: Not much has changed with FSLR. I expect FSLR to pullback to trend line support, its 50-day SMA, and prior resistance from July and April. (see grey oval). This is where I suggest launching bullish positions and then target a move back towards its recent highs. I've pushed out the suggested call position to the December $155's. FSLR reports earnings on Thursday after the bell. Holding positions over earnings is a higher risk play. Readers may want to consider selling a further out of the call to help better define risk. For example, buy the December $155 call and sell the December $160 or $165 call.

10/16: (James) 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 December $155 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 - GNK - close 16.44 change +0.17 stop 15.50

Target(s): 16.10 (hit), 16.80, 17.35, 17.95
Key Support/Resistance Areas: 18.25, 17.75, 16.90, 16.25, 15.75
Current Option Gain/Loss: -37.5%
Time Frame: 1 to 3 weeks
New Positions: Yes

Comments:
10/25: GNK broke out higher today and appears to be trying to put in a higher low. I've adjusted the targets slightly and suggest readers use any further strength as an opportunity to close positions or tighten stops to protect capital.

10/23: GNK is stuck between its 50-day SMA (below) and 20-day SMA (above). There is resistance at current levels but if GNK can break above today's highs we will have a good chance of reaching our next target. However, I am concerned about the overbought broader market conditions so I suggest readers use strength to consider exiting positions, or tightening stops. 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: 57.46 change: +0.49 stop: 49.75

Target(s): 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:
10/23 & 10/25: HUM looks extremely bullish here and it is probably because money is rotating into this defensive sector. If HUM pulls back to $53.80 I suggest launching new positions. However, HUM reports earnings next Monday (11/1) so holding positions over the report is a higher risk situation. Readers may want to consider selling a further out of the call to help better define risk, similar to the suggestion in the FSLR play above. The play release from last weekend is below.

10/16: (James) 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 $53.80

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 24.03 change +0.20 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: +13%
Time Frame: 3 to 4 weeks
New Positions: Yes

Comments:
10/25: JEF bounced back today but is struggling at its 200-day SMA. $23.50 offers solid support. My comments from the weekend remain valid.

10/23: JEF printed a bearish engulfing candlestick on Friday and I doubt the stock will be able to swim against the current of a broader market correction, should a correction happen. The stock gapped higher on Thursday and then Friday it retraced the gain and closed the gap. The 50-day SMA and prior resistance is just below near $23.50. The stock and price action look good to me but we are likely going to need the market to continue its march higher. For now, I continue to view dips as buying opportunities.

10/21: JEF gapped higher at the 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.

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 75.72 change -0.60 stop 72.48 *NEW*

Target(s): 78.85, 81.50, 85.00, 88.00
Key Support/Resistance Areas: 90.00, 85.00, 82.00, 75.30, 73.00
Current Gain/Loss: -25%
Time Frame: 3 to 4 weeks
New Positions: Yes

Comments:
10/25: SHLD reversed course today, but the stock did not take out Friday's lows. I've raised the stop to $72.48 and added $78.85 as a target and suggest readers begin to tighten stops if we head that direction. $75.30 is s solid support area.

10/23: Not much has changed from my comments below. Readers may want to keep an eye on $78.90 as a potential exit target. This is near highs from Thursday and should produce a +15% gain. Consider tightening stops if we get up there. Friday was the highest closing price the stock has seen since 6/17 so momentum is on our side, but we are going to need help from the broader market and retail sector, which has been performing extremely well lately.

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.

Suggested Position: Long December $80.00 CALL, entry was at $3.40

Entry on October 21, 2010
Earnings Date 11/18/10 (unconfirmed)
Average Daily Volume = 831,000
Listed on October 16th, 2010


PUT Play Updates

Fastenal Co. - FAST - close: 52.62 change: -0.28 stop: 54.25

Target(s): 51.20, 50.10, 48.25, maybe lower
Key Support/Resistance Areas: 55.00, 52.00, 50.00, 48,00,
Current Gain/Loss: -50%
Time Frame: 3 to 4 weeks
New Positions: Yes

Comments:
10/25: FAST gapped higher again today and it was met with immediate selling as the stock sold off the entire day. My comments below remain the same.

10/23: FAST gapped higher on Friday and it was immediately sold into. The stock has yet to trade above its highs from the past two weeks and closed below its 20-day SMA which is starting roll over. If we get a more meaningful broader market correction FAST should quickly head towards our targets which is when we want to be exiting positions or tightening stops.

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 bullish 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.

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


PNC Financial - PNC - close 54.00 change -0.72 stop NONE

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: -80%
Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
10/25: I do not see many changes from my comments below. PNC lost -1.3% today and printed a bearish dark cloud cover candle pattern which indicates a decline is imminent. Let's see if we get a healthy broader market correction see how far we can ride this lower.

10/23: PNC just keeps going like the energizer bunny. We have gotten destroyed on this play and our option premium has almost evaporated. Keeping a stop in place now doesn't make a lot of sense to me. I would rather hold the position and ride it lower if the market corrects between now and expiration, which is three full trading weeks. Our opportunity to close positions was late last week when PNC was at the $51.00 level. Let's see what happens in the coming days and we'll continue to monitor the developments.

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.

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 BEARISH PLAYS

Alliant Techsystems - ATK - close 76.00 change -0.09 stop 76.33

Target(s): 74.90, 72.80
Key Support/Resistance Areas: 76.00, 74.00, 72.00, 71.25, 70.00
Final Gain/Loss: -68.9%
Time Frame: 1 to 2 weeks
New Positions: Yes, with tight stops

Comments:
10/25: We were stopped out of ATK this morning for a disappointing loss. The stock managed to break above a long term downtrend line and its 200-day SMA last week. There is a possible bearish double top in play at current levels. ATK should find support near $75.00 and then $72.80.

10/23: There is really nothing more to report on ATK as the stock traded in a tight range near its highs from Thursday. We need an immediate turn lower this week. I've adjusted the targets and suggest readers use weakness as an opportunity to close positions or tighten stops to protect capital. Our stop is just overhead.

10/21: ATK has broken out and our set-up has failed. The stock 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.

Closed Position: Long November $70.00 PUT $0.45, entry was at $1.45

Annotated Chart:

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


Hartford Fin. Serv. Group - HIG - close 24.57 change +0.62 stop DROPPED

Target(s): 22.45, 22.05
Key Support/Resistance Areas: 24.60, 23.70, 22.85, 22.25, 21.85
Time Frame: 1 to 2 weeks

Comments:
10/25: I'm getting too many mixed signals in HIG and do not feel confident in the play any longer. As such I am dropping the play. Goldman Sachs removed HIG from its Americas sell list today and raised the stock to Neutral from Sell, slapping a $25 price target on the stock.

10/23: HIG printed a bearish engulfing candlestick on Friday as the stock failed at its 200-day SMA again. Our trigger remains at $23.32 which is a break down below last week's and also a break of trend line support.

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.

Suggested Position: *DROPPED* Buy December $22.50 PUT if HIG trades to $23.32

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