Editor's Note:

We had a few new highs on the play list this Friday. Overall bulls are still in control. Financials are still lagging but stocks in general look poised to move higher. We are exiting a couple of bearish plays.

-James

Current Portfolio:


CALL Play Updates

Ansys, Inc. - ANSS - close: 48.30 change: -0.17

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:
11/20 update: ANSS is still consolidating sideways in what is starting to look like a pennant formation. More nimble traders may want to consider buying calls on a dip near $47.50. Alternatively you could wait for a breakout to new highs over $50.00. At the moment I want to keep our trigger at $46.75 but we ANSS doesn't correct in the next couple of days we'll re-evaluate an entry point.

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: 83.97 change: +0.86

Stop Loss: 79.40
Target(s): 84.85, 89.50
Current Option Gain/Loss: +30.0% & +55.5%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
11/20 update: CAT has seen a strong round in just the last couple of days and the stock closed at new two-year highs. Shares could hit our first target at $84.85 soon. Keep in mind that CAT has found tough resistance in the $85.50-86.00 zone back in 2007 and 2008. We might see this stock rally toward $86 and pull back before moving much higher.

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


CH Robinson Worldwide Inc. - CHRW - close: 72.85 change: +0.60

Stop Loss: 69.90
Target(s): 74.75, 79.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes

Comments:
11/20 update: CHRW is a new play from Thursday night. I was hoping for a little pull back and set a trigger to buy calls at $71.75. The stock dipped to $72.07 on Friday before rebounding. I'm concerned shares might run away from us so I'm suggesting new positions now. I normally hate chasing stocks but CHRW just started to breakout from the recent consolidation pattern on Thursday. More conservative traders may want to wait. The $73.25 highs could still be resistance and it wouldn't surprise me to see CHRW retest $72.00-71.50 again before moving higher. Please note I'm adjusting our targets to $74.90 and $79.50. Our stop is unchanged at $69.90. FYI: The Point & Figure chart is very bullish with a $92 target.

Open positions now at current levels. I prefer the January calls.

Suggested Position: Buy the December $75.00 calls (CHRW1018L75) current ask $0.55

- or -

Suggested Position: Buy the January $75.00 calls (CHRW1122A75) current ask $1.25

Annotated Chart:

Entry on November 22nd at $ xx.xx
Earnings Date 02/03/11
Average Daily Volume = 1.1 million
Listed on November 18th, 2010


Cliffs Natural Resources - CLF - close: 69.92 change: +2.12

Stop Loss: 64.75
Target(s): 71.50, 74.75
Current Option Gain/Loss: +32.2%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
11/20 update: Commodity stocks continued to bounce on Friday and CLF outperformed the S&P with a +3% gain. If you're looking for an entry point I would wait for a dip near $68.50. Keep an eye on the dollar. Weakness in the dollar should be bullish for commodity-related issues.

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: 66.56 change: +0.15

Stop Loss: 62.90
Target(s): 69.00
Current Option Gain/Loss: + 60.0%
Time Frame: 3 to 4 weeks
New Positions: No

Comments:
11/20 update: Retailers were still showing some strength on Friday but I'm still a little concerned about COST's bearish reversal on Thursday. There wasn't much follow through lower but if you're looking for a new bullish entry point I'd wait for a dip or bounce near the $65.00 area. Of course that requires COST to slip under short-term support at $66.00 first.

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


Express Scripts - ESRX - close: 53.38 change: +0.39

Stop Loss: 49.65
Target(s): 53.95, 57.25
Current Option Gain/Loss: +60.6%, and +35.7
Time Frame: 5 to 6 weeks
New Positions: Yes, wait for a dip

Comments:
11/20 update: ESRX extended its gains to three days in a row and shares hit new five-month highs on Friday. I don't see any changes from my Thursday comments. If you're looking for a new entry point I would watch for a pull back toward $52.00. Keep your position size small. Our first target to take profits is at $53.95. I'm setting a secondary target at $57.25.

We only have half a position open.

Current Position: Long the 2010 December $52.50 calls (ESRX1018L52.5) Entry @ $1.22
- or -
Current Position: Long the 2011 January $52.50 calls (ESRX1122A52.5) Entry @ $2.10

Entry on November 18th at $51.81
Earnings Date 02/24/11
Average Daily Volume = 4.3 million
Listed on November 17th, 2010


Humana Inc. - HUM - close: 56.03 change: -0.78

Stop Loss: 51.75
Target(s): 59.75
Current Option Gain/Loss: -13.1%
Time Frame: 4 to 6 weeks
New Positions: Yes, look for another dip

Comments:
11/20 update: As expected HUM started to decline again. I suspect that HUM will retest $55 and possibly its 50-dma again before moving higher. I'm suggesting readers buy calls on the next dip near $55.

Current Position: Long the 2011 January $55 calls (HUM1122A55) Entry @ $3.80

Entry on November 18th at $55.05
Earnings Date 11/01/10 (confirmed)
Average Daily Volume = 2.1 million
Listed on October 16th, 2010


iShares DJ Financial ETF - IYF - close 53.77 change +0.00

Stop Loss: 52.90
Target(s): 57.50, 59.75
Current Option Gain/Loss: -65.0%
Time Frame: 6 to 8 weeks
New Positions: Yes

Comments:
11/20 update: The financial sector was a laggard on Friday with the major banking indices closing in negative territory. The IYF managed to rebound from another test of its 50-dma and it closed unchanged on the session. I would use this bounce as a new bullish entry point since we have a relatively tight stop loss at $52.90. More conservative traders may want to wait for a new close over $54.00 as confirmation of the rebound.

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

11/20/10 Use the bounce as a new entry point (call @ $0.70)

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: 85.81 change: +3.34

Stop Loss: 79.90
Target(s): 86.75, 89.50
Current Option Gain/Loss: +80.0%
Time Frame: 4 to 6 weeks
New Positions: Wait for a dip, see below

Comments:
11/20 update: Friday was a big day for NKE. It looks like the +15% increase in the company's dividend was bigger news than expected. The stock screamed higher on Friday morning and never let up. NKE closed at new highs with a +4% gain on the session. The intraday high was $86.32 and our first target is $86.75. I am not suggesting new bullish positions at this time. Wait for a dip or a bounce near $84.

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 15.80 change -0.02

Stop Loss: 14.80
Target(s): 16.75, 17.75
Current Option Gain/Loss: -19.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, on dips

Comments:
11/20 update: There is no change from my previous comments on VIP. The stock is still consolidating sideways but looks poised to breakout higher. I have been suggesting entries on dips near $15.50 and VIP dipped to $15.56 on Friday. FYI: VIP is due to report earnings around Dec. 2nd.

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

Lubrizol Corp. - LZ - close: 105.08 change: +0.08

Stop Loss: 110.25
Target(s): 100.50
Current Option Gain/Loss: +13.7%
Time Frame: 3 to 4 weeks
New Positions: No

Comments:
11/20 update: LZ managed to eke out a minor gain on Friday but the trend of higher lows is still in place and the short-term outlook remains bearish.

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


CLOSED BEARISH PLAYS

Oceaneering Intl. Inc. - OII - close: 70.98 change: +1.13

Stop Loss: 71.05
Target(s): 64.50, 62.25
Current Option Gain/Loss: -31.0%
Time Frame: 3 to 4 weeks
New Positions: No

Comments:
11/20 update: The energy sector continues to show strength and OII rallied to $71.09 intraday. That was enough to hit our stop loss at $71.05 and close this trade. We knew this was an aggressive trade trying to pick a top after the Nov. 12th reversal but there hasn't been any follow through.

Closed Position: Long the December $65.00 puts (OII1018x65) Entry @ $1.45, exit @ $1.00 (-31%)

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: 58.66 change: +1.41

Stop Loss: 60.25
Target(s): 55.05, 53.00
Current Option Gain/Loss: -29.2%
Time Frame: 1 to 2 weeks
New Positions: No

Comments:
11/20 update: I am giving up early on RIMM. After the failed rally near $60 and its 200-dma it looked like shares might see a larger correction. Unfortunately there has not been any follow through lower. Now the stock is inching higher again and looks ready to challenge resistance near $60 again. I am suggesting an early exit now to limit our losses.

Closed Position: Long the December $55 puts (RIMM1018X55) Entry @ $2.53 , exit now current value @ $1.79 (-29.2%)

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