Editor's Note:

The stock market traded in a narrow range for most of the session. We didn't see a lot of movement in our candidates except for COST, which is surging to new highs, and FFIV, which is seeing some volatility and hit our bearish trigger.

-James

Current Portfolio:


CALL Play Updates

Ansys, Inc. - ANSS - close: 47.69 change: +0.13

Stop Loss: 44.90
Target(s): 49.50,
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
11/17: It was a quiet session for ANSS with the stock trading sideways in a 60-cent range. The $48.00 level above looks like short-term resistance. There is no change from my prior comments. Currently our plan is to buy calls on a dip at $46.75 but readers may want to wait and watch for a bounce from the $46.00 level before initiating positions instead.

Buy-the-dip trigger @ 46.75

Suggested Position: Buy the 2011 January $50.00 calls (ANSS1018L50)

Entry on November xxth at $ xx.xx
Earnings Date 02/24/11 (unconfirmed)
Average Daily Volume = 651 thousand
Listed on November 13th, 2010


Caterpillar - CAT - close: 81.17 change: +0.80

Stop Loss: 79.40
Target(s): 84.85, 89.50
Current Option Gain/Loss: -18.5% & - 2.5%
Time Frame: 3 to 4 weeks
New Positions: Yes

Comments:
11/17: CAT managed a little bounce with traders buying the dip near support at $80.00. Volume was a lot lighter compared to the last couple of days. I'm still optimistic here but if the market continues to breakdown then CAT will most likely hit our stop under $80.00. For now the pull back toward $80 looks like a new bullish entry point.

Earlier Comments
Our first target is $84.85. We want to exit the majority of our position here. We'll set a secondary target at $89.50 but again I warn you the $85 level should be tough resistance.

Current Position: Long the December $85 calls (symbol: CAT1018L85)
Entry @ $1.40

Double Down
New Position: Buy the December $85 calls (CAT1018L85), current ask $1.17

Entry on November 9th at $ 81.75
Earnings Date 01/27/11
Average Daily Volume = 7.7 million
Listed on November 6th, 2010


Cliffs Natural Resources - CLF - close: 66.41 change: +0.52

Stop Loss: 64.75
Target(s): 71.50, 74.75
Current Option Gain/Loss: -19.4%
Time Frame: 4 to 6 weeks
New Positions: Yes

Comments:
11/17: For the second day in a row traders bought the dip near $65.00. Readers can use this intraday bounce as a new bullish entry point to buy calls. Obviously we're at the whims of the market here and any further breakdown in the major indices or commodity sector will probably see us stopped out.

Current Position: Long the 2010 December $70.00 CALL, Entry @ $2.42

Entry on November 12th @ 67.00
Earnings Date 02/17/11
Average Daily Volume = 4.3 million
Listed on November 1, 2010


Costco Wholesale - COST - close: 67.02 change: +1.28

Stop Loss: 62.90
Target(s): 69.00
Current Option Gain/Loss: +100.0%
Time Frame: 3 to 4 weeks
New Positions: No

Comments:
11/17: Traders reacted positively to Target's (TGT) earnings report today and the RLX retail index gained +0.7%. Yet shares of COST outperformed its peers with a +1.9% gain and a new two-year high. I am raising our stop loss to $63.90. Readers will want to strongly consider taking some profits in their call positions since our December $65 calls have doubled to $3.00 (+100%). Officially our target to exit is $69.00.

Earlier Comments
We want to keep our position size small to limit our risk.

Current Position: December $65.00 calls (symbol: COST1018L65)
Option Entry @ $1.50

Entry on November 8th at $64.50
Earnings Date 12/09/10
Average Daily Volume = 3.4 million
Listed on November 6th, 2010


Humana Inc. - HUM - close: 58.05 change: +0.49

Stop Loss: 51.75
Target(s): 59.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
11/17: HUM saw a little oversold bounce today (+0.8%) but shares still looks due for a bigger correction. There is no change from my prior comments. We are still waiting for a pullback toward $55.00. If HUM hits our bullish trigger at $55.25 we'll use a stop loss at $51.75.

Suggested Position:

Trigger to buy calls at $55.25

BUY the 2011 January $55 calls.

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


iShares DJ Financial ETF - IYF - close 53.10 change -0.23

Stop Loss: 52.90
Target(s): 57.50, 59.75
Current Option Gain/Loss: -65.0%
Time Frame: 6 to 8 weeks
New Positions: No

Comments:
11/17: Warning! The situation in the financials is not improving. Banks were some of the worst performers today. The IYF lost another -0.4% and closed under its simple 50-dma now. The intraday low was $52.98 and our stop loss is at $52.90. Readers may want to wait for a close back above $54.00 before considering new bullish positions. Right now odds are growing that we'll get stopped out soon.

Current Position: Long the December $55.00 CALLS, entry @ $2.00

Entry on November 9th @ 55.00
Earnings Date N/A (unconfirmed)
Average Daily Volume: 1.0 million
Listed on November 4, 2010


Nike Inc. - NKE - close: 81.39 change: +0.88

Stop Loss: 79.90
Target(s): 86.75, 89.50
Current Option Gain/Loss: -53.0%
Time Frame: 4 to 6 weeks
New Positions: Yes

Comments:
11/17: NKE is seeing a little oversold bounce after slipping toward support near $80.00 and its rising 50-dma yesterday. I don't see any changes from my previous comments. Aggressive traders could buy this dip.

Current Position: Long the December $85.00 CALLS (symbol:NKE1018L85) Entry @ $1.15

Entry on November 11th at $83.00
Earnings Date 12/21/10
Average Daily Volume = 2.3 million
Listed on November 6th, 2010


VimpelCom Ltd - VIP - close 15.53 change +0.10

Stop Loss: 14.80
Target(s): 16.75, 17.75
Current Option Gain/Loss: -38.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, on dips

Comments:
11/17: VIP spent the session churning sideways. There is a battle going on as the bullish trend of higher lows is fighting the short-term bearish trend of lower highs. I'm expecting a breakout higher as long as the market cooperates. If the trend of lower highs holds up the next dip should only fall toward $15.20-15.30. FYI: VIP is due to report earnings around Nov. 24th.

Current Position: December $15.00 CALLS, Entry @ $1.05

Entry on November 8, 2010 @ 15.60
Earnings Date 11/24/2010 (unconfirmed)
Average Daily Volume: 3.5 million
Listed on November 3, 2010


PUT Play Updates

F5 Networks - FFIV - close: 115.01 change: -0.94

Stop Loss: 121.10
Target(s): 105.25
Current Option Gain/Loss: -10.5%
Time Frame: 2 to 3 weeks
New Positions: Yes

Comments:
11/17: FFIV initially rallied this morning with a gap open higher at $116.52 and almost hit $119 but shares slowly drifted back toward support near $115.00. Then the late afternoon market weakness helped pull FFIV under support and shares dipped to $112.10. Our trigger to buy puts was hit at $114.50. The play is open and I would still consider new positions but keep your positions small. This is an aggressive, higher-risk trade. Our target is $105.25.

Current Position: Long the 2010 December $105 puts (FFIV1018X105) Entry @ $2.85

Chart:

Entry on November 17th at $114.50
Earnings Date 01/19/11
Average Daily Volume = 2.9 million
Listed on November 16th, 2010


Lubrizol Corp. - LZ - close: 103.85 change: -0.16

Stop Loss: 110.25
Target(s): 100.50
Current Option Gain/Loss: +29.2%
Time Frame: 3 to 4 weeks
New Positions: No

Comments:
11/17: The morning bounce in LZ has rolled over and shares look poised for more weakness. I don't see any changes from my prior comments. You may want to keep your position size small to limit your risk.

Current Position: Long the December $105 puts (symbol:LZ1018X105)
Entry @ $2.90

Entry on November 10th at $107.68
Earnings Date 02/03/11 (unconfirmed)
Average Daily Volume = 525 thousand
Listed on November 9th, 2010


Oceaneering Intl. Inc. - OII - close: 68.80 change: +0.77

Stop Loss: 71.05 *new*
Target(s): 64.50, 62.25
Current Option Gain/Loss: - 3.4%
Time Frame: 3 to 4 weeks
New Positions: No

Comments:
11/17: Oil service stocks were strong performers today with the OSX index up +1.3%. OII saw a +1.1% gain. I warned readers yesterday that OII's lack of weakness on Tuesday could spell trouble. I'm surprised the oil stocks were this strong given the big declines in oil today. Readers may want to lower their stops toward the $70.00 level. I'm not suggesting new bearish positions at this time.

Current Position: Long the December $65.00 puts (OII1018x65) Entry @ $1.45

Entry on November 15th at $69.21
Earnings Date 02/17/11
Average Daily Volume = 1.0 million
Listed on November 13th, 2010


Research In Motion - RIMM - close: 55.92 change: -0.37

Stop Loss: 60.25
Target(s): 55.05, 53.00
Current Option Gain/Loss: +11.8%
Time Frame: 1 to 2 weeks
New Positions: No

Comments:
11/17: RIMM was hugging support near $56.00 most of the session but the market's late day decline pushed the stock deeper into negative territory. I don't see any changes from my prior comments. If RIMM does see a little bounce look for resistance near $58.00.

Current Position: Long the December $55 puts (RIMM1018X55) Entry @ $2.53

Entry on November 16th at $57.28
Earnings Date 12/16/10
Average Daily Volume = 17.6 million
Listed on November 15th, 2010