Current Portfolio:


CALL Play Updates

Archer Daniels Midland Co. - ADM - close 33.45 change -0.23 stop 30.70

Target(s): 34.15, 35.15, 35.95. and possibly higher
Key Support/Resistance Areas: 38.00, 34.15, 33.00, 32.00
Current Gain/Loss: +32%
Time Frame: 2 to 4 weeks
New Positions: Yes, on dips

Comments:
10/28: Our option position is performing very well considering the 40 cent gain from our entry point. I continue to be cautious and expect a broader market pullback, perhaps after the FOMC meeting week. Our immediate target is $34.15 which should give us another 30 cent gain in our option, which would represent 70%+ gains in the position. ADM reports earnings before the bell on Tuesday. I expect the report to be positive but the reactions to some of the positive earnings reports lately have not made sense. If you plan on holding positions I would use any strength in ADM between now and the earnings report as an opportunity to take at least a portion of your profits off of the table. This enables you to book a gain, reduces risk, and allows you to participate in further gains if the stock trades higher.

10/27: ADM hit our trigger to enter bullish positions at $33.05. We are long December $34.00 calls at 77 cents. The stock has solid support $33 down to $32 and I would view dips as buying opportunities. Since we were triggered on our lower entry I have added an immediate target of $34.15 and adjusted the more aggressive targets. If the stock breaks higher I suggest taking profits or tightening stops to protect them, especially considering the overbought broader market conditions.

10/25: ADM has been consolidating around a key long term pivot area between $32 and $33 for the past 6 weeks. The stock has lots of support below and limited overhead resistance until $36.50. I suggest readers initiate long positions on a dip or a breakout. We'll use a trigger of $33.05 on a dip and $34.15 on a breakout. Our initial stop will be $30.70 and it will be adjusted once the position is opened.

Note: ADM reports earnings before the market opens on 11/2. The company has beaten earnings estimates in 3 of the past 4 quarters and I am expecting another surprise beat. Holding positions is a higher risk play so please consider using small position size.

Current Position: Long December $34.00 CALL, entry was at $0.77

Entry on October 27, 2010
Earnings Date 11/2/2010 before market (unconfirmed)
Average Daily Volume: 5 million
Listed on October 25, 2010


ATP Oil & Gas Corp - ATP - close 13.96 change -0.34 stop 13.75

Target(s): 16.10, 17.00, 17.90, and possibly higher
Key Support/Resistance Areas: 18.00, 17.00, 16.25, 14.75, 14.10
Current Gain/Loss: -45%
Time Frame: 1 to 3 weeks
New Positions: Yes, with a tight stops

Comments:
10/28: The slide in ATPG continues and we are on the verge of getting stopped out. The stock has lost its 20-day and 200-day SMA's as well as a couple of support levels. It is do or die time or we will have to step aside and close the position. The bullish case of a descending wedge remains but the stock may headed for its 50-day SMA prior to breaking higher, which is below our stop.

10/27: ATPG sold off -5% today and I could not find any news that caused it. Although today's volume was a bit heavier than recent days, it is still much lower than recent days when the stock was breaking out. The stock closed below its 20-day and 200-day SMA but is still holding an upward trend line. There is support at current levels an trying a long position with a tight stop below makes sense to me.

10/26: ATPG is consolidating above its 20-day and 200-day SMA's. The recent pullback continues to be on lighter volume which is a bullish sign. I've lowered the first target by 10 cents to $16.10. I suggest taking profits or tightening stops to protect them if ATPG reaches our first target.

Current 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 151.15 change +0.85 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, open positions tomorrow

Comments:
10/28: FSLR reported earnings today after the bell and the stock is down -$10 in after hours trading as of the time of this writing. The report looked good to me as FSLR beat earnings by 9 cents, revenues were better than expected, and guidance was slightly above analysts estimates. However, the company said they see some uncertainties in Europe which explains the weakness. The stock closed the extended session right at $141.00 to the penny which was my anticipated support level for the stock. I suggest we use the weakness to our advantage and open small positions tomorrow. This is a higher risk play so I suggest using smaller positions size. We are targeting a bounce and have close targets. If buyers step in these targets could be reached quickly so be ready to take profits.

10/26 & 10/27: FSLR reports earnings on Thursday after the bell. If the stock trades down to the rising 50-day SMA, upward trend line support, and prior resistance level I suggest we take advantage of the weakness. All of the areas are converging near $139 to $141. Let's raise the trigger to $141 and use a dip as a buying opportunity. I am reluctant to chase FSLR so if there is no dip we will most likely drop the play.

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. 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 money call to help better define risk. For example, buy the December $155 call and sell the December $160 or $165 call.

Suggested Position:

Trigger to buy calls @ $141.00

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 16.38 change -0.06 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: -50.0%
Time Frame: 1 to 3 weeks
New Positions: Neutral

Comments:
10/27 & 10/28: GNK is forming a symmetrical triangle as prices are coiling. This is not good for option premium that expires 3 weeks from Friday. We need the stock to follow through higher and if it does I suggest readers use the opportunity to close positions or tighten stops to protect capital.

10/26: GNK gapped lower, surged in the morning, and then sold off late. The end result was that yesterday's gap higher was closed, however, today was the second consecutive topping tail candle printed. There is support near $16.20 to $16.25, the 50-day SMA at $16.00, and an upward trend line. As long as the stock stays above these areas it is bullish. I suggest readers use strength as an opportunity to close positions or tighten stops to protect capital.

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.

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: 57.84 change: +0.47 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:
10/28: HUM refuses to pull back. The company reports earnings on Monday before the bell. I suspect the earnings report will be good which may cause the stock to continue higher, however, if there is a sell off I suggest using the dip as a buying opportunity. Our trigger is $53.80.

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 24.00 change +0.14 stop 22.75

Target(s): 25.00, 25.75
Key Support/Resistance Areas: 25.85, 25.25, 24.25, 23.50, 23.00
Current Gain/Loss: +4.5%
Time Frame: 3 to 4 weeks
New Positions: Yes

Comments:
10/28: JEF looks to be on the verge of breaking out of its bull flag and should easily send the stock up towards $24.65 if the broader market cooperates. Readers may want to consider this level as a possible exit point which will produce almost a +3% gain. I continue to like the volume patterns in JEF and if the stock closes above its 200-day SMA we should be able to book a nice winner.

10/27: JEF is finding support at its 50 & 100-day SMA's which is the first time the stock has tested these since breaking higher last week. This is a logical spot for JEF to bounce to another high. Our first target is $25.10 but readers may also want to consider $24.65 as a possible exit point. This should produce a +30% gain.

10/26: After breaking out on 10/20 JEF has retraced all of the gains and is finding support near its 50-day SMA, which is also at a support level of $23.50. I view this dip as a buying opportunity with a tight stop below. The pullback over the past three days looks like a bull flag to me.

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.

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

Entry on October 29, 2010
Earnings Date 1/20/11 (unconfirmed)
Average Daily Volume: 1.1 million
Listed on October 19, 2010


PUT Play Updates

Fastenal Co. - FAST - close: 51.36 change: +0.05 stop: 53.40

Target(s): 51.20 (hit), 50.25, 49.65, 48.25, maybe lower
Key Support/Resistance Areas: 55.00, 52.00, 50.00, 48,00,
Current Gain/Loss: -20%
Time Frame: 3 to 4 weeks
New Positions: Yes, on bounces

Comments:
10/28: Not much has changed from my comments below. FAST is barely hanging on to its 50-day SMA. If the stock breaks below $50.85 we should reach easily our second target of $50.25. Readers should begin to exit positions as we have options that expire in November and time decay will start to erode our premium.

10/27: FAST lost -2.27% today and hit our first target where positions could have closed near breakeven. The stock continues to make lower highs and lower lows, but is finding support at its 50 & 100-day SMA's. We are going to need to see a more meaningful broader market correction for us to book a gain. I've adjusted the next target up to $50.25 and suggest readers take profits or tighten stops to protect them if it is reached. We should be able to book a decent gain on further weakness. I've lowered the stop to $53.40 which is above the primary downtrend line and 20-day SMA.

10/26: Fast is struggling at its 20-day SMA and downtrend line that began on 10/11. A trip to the 50-day SMA seems inevitable which will also tag our first target. Time decay is starting to concern me with November options so I suggest we use weakness to close positions and/or tighten stops to protect capital.

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


Illinois Tool Works - ITW - close 45.92 change -0.33 stop 47.83

Target(s): 44.85, 44.15, 43.50
Key Support/Resistance Areas: 47.75, 46.10, 45.50, 44.60, 44.00, 43.00
Current Gain/Loss: +0.00%
Time Frame: 2 to 3 weeks
New Positions: Yes

Comments:
10/28: We are right back to where we started in ITW. The stock looks vulnerable but we will most likely need a broader market correction to get this heading towards our targets. A break below $45.57 is the level to watch.

10/27: ITW gapped lower which triggered our entry at the open this morning. We are long December $45 puts at $1.20. The stock drifted higher along with the broader market. There is support at $45.50 and overhead resistance between $46 and $47. Bounces should get sold into and if the broader market corrects ITW should head towards our targets.

10/26: Shareholders were unimpressed with ITW's earnings report on 10/19. The company narrowed guidance to the lower end of its range and the stock appears to be changing trends. Considering the overbought broader market conditions and the weakness being exhibited in ITW, I suggest readers initiate short positions in the stock on any bounces, or a break down below the stock's 200-day SMA and support near $46.00. Let's use a trigger of $46.40 on a bounce or $45.92 on a break down. Our initial stop will be $47.83 but it will be adjusted after the position is opened. Depending on our trigger, we are targeting more than a -$1 move lower, which will produce a nice gain if the set-up unfolds as expected.

Current Position: Long December $45.00 PUT, entry was at $1.20

Entry on October 27, 2010
Earnings: More than two months (unconfirmed)
Average Daily Volume: 4.5 million
Listed on October 26, 2010


Mechel OAO - MTL - close 22.83 change -0.31 stop 24.47

Target(s): 22.30, 21.25, 20.25
Key Support/Resistance Areas: 24.25, 24.00, 23.60
Current Gain/Loss: Unopened
Time Frame: 1 to 3 weeks
New Positions: Yes, see trigger

Comments:
10/28: I was hoping for a bounce up towards MTL's 200-day SMA but it doesn't appear we are going to get it as the stock is hanging out in a bear flag. Let's lower the trigger to $23.30 which is near today's highs. My comments from the play release below remain valid.

10/27: The steel sector has come under pressure as earnings and guidance have failed to impress investors. MTL finds itself in a bear flag and is consolidating under its 200-day SMA, while its 50-day and 20-day SMA's are just overhead. Conservative traders will want to see the stock break below $22.25 before launching bearish positions. However, considering the overbought broader market conditions initiating positions on a bounce sets up a very good risk reward trade. There is solid resistance in the $23.60 to $24.20 area so I suggest launching bearish positions at $23.55 (lowered to $23.30). Our stop will be above the 20-day SMA at $24.47 (which is rolling over and declining). If triggered our first two targets are -5% and -9% lower.

Trigger: $23.55

Suggested Position: BUY the December $23.00 PUT, current ask $1.50, estimated ask at entry $1.30

Entry on October XX
Earnings Date: More than two months (unconfirmed)
Average Daily Volume: 2.1 million
Listed on October 27, 2010


PNC Financial - PNC - close 53.64 change -0.11 stop NONE

Target(s): 53.00, 52.10, 51.05 (hit), 50.35
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:
10/27 & 10/28: Not much has changed from my comments below. PNC closed near its lows of the day while the broader market closed near its highs. We are looking for dip to close positions and salvage as much premium as possible, however, this may have to wait until next week's elections and FOMC announcement on Wednesday.

10/26: PNC closed flat in the day. Our position is deep out of the money and we are waiting to see if the stock corrects with the broader market, which we will use as an opportunity to close positions. The stock is holding an upward trend line that began from last week's lows. If it breaks the next support levels are $53.00 and $52.10. I doubt our option value is going increase a significant amount, but recovering 20 to 30 cents is certainly in the cards.

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.

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


Sears Holdings Corp - SHLD - close 71.98 change -1.80 stop 72.48

Target(s): 78.85, 81.50, 83.75
Key Support/Resistance Areas: 90.00, 85.00, 82.00, 75.30, 73.00
Final Gain/Loss: -48.5%
Time Frame: 3 to 4 weeks
New Positions: Closed

Comments:
10/28: SHLD has broke through its upward trend line and 20-day SMA this morning and hit our stop. This is why our stop was placed at 73.48 and when it failed it was our queue to get out of the way. $69 to $70 looks like the next stop.

10/27: SHLD sold off -3.3% today. The stock is finding support on its 20-day SMA and upward trend line that began in August. This is a logical spot for the stock to bounce and make another higher low and higher high. Launching long positions at this level with a tight stop below is a low risk trade and makes a lot of sense. I've adjusted the upside targets.

Closed Position: Long December $80.00 CALL at $1.75, entry was at $3.40

Annotated Chart:

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