Editor's Note:

Banking stocks slipped to new short-term lows before paring their losses by the close. Meanwhile technology continues to show some relative strength.

-James

Current Portfolio:


CALL Play Updates

Ansys, Inc. - ANSS - close: 48.63 change: +0.33

Stop Loss: 47.25
Target(s): 52.45, 54.90
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
11/22 update: The morning declines stalled at $47.57 and ANNS managed to post a gain on the session. If you look closely you can see that ANSS is forming a pennant formation of lower highs and higher lows. This normally a neutral pattern but I suspect ANSS is ready to breakout higher from this consolidation. There is overhead resistance at $50.00 but I'm going to go ahead and suggest a bullish entry point to buy calls at $48.75 and we'll use a stop loss at $47.25. We want to keep our positions very small considering this aggressive, higher-risk entry point. Please note I've adjusted our targets.

Trigger to buy calls @ $48.75

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

Annotated Chart:

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: 84.00 change: +0.03

Stop Loss: 79.40
Target(s): 84.85, 89.50
Current Option Gain/Loss: +17.1% & +40.1%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
11/22 update: The market saw some volatility but it was a quiet day for CAT. Traders bought the dip near $82.80 and CAT managed to tag a new intraday high. There is no change from my weekend comments. 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: 72.88 change: +0.03

Stop Loss: 69.90
Target(s): 74.75, 79.00
Current Option Gain/Loss: -22.2%, and - 4.3%
Time Frame: 4 to 6 weeks
New Positions: Yes

Comments:
11/22 update: CHRW opened lower for us on Monday morning and traders bought the dip again near $72.00. Overall it was a relatively quiet session. I don't see any changes from my weekend comments and I would still launch new bullish positions now. FYI: The Point & Figure chart is very bullish with a $92 target.

Current Position: Long the December $75.00 calls (CHRW1018L75) Entry @ $0.45

- or -

Current Position: Long the January $75.00 calls (CHRW1122A75) Entry @ $1.15

Entry on November 22nd at $72.44
Earnings Date 02/03/11
Average Daily Volume = 1.1 million
Listed on November 18th, 2010


Cliffs Natural Resources - CLF - close: 70.45 change: +0.53

Stop Loss: 64.75
Target(s): 71.50, 74.75
Current Option Gain/Loss: +36.3%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
11/22 update: CLF is still showing strength. Traders bought the dip several times in the $68.75 zone and CLF managed to close over the $70.00 level. I don't see any changes from my weekend comments. Our first target is $71.50.

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: 67.26 change: +0.70

Stop Loss: 62.90
Target(s): 69.00
Current Option Gain/Loss: + 92.6%
Time Frame: 3 to 4 weeks
New Positions: No

Comments:
11/22 update: COST is still showing relative strength. There was almost no decline this morning while the rest of the market was slipping lower. COST managed to end the session up +1% and closing near its highs. Another good day or two and COST should be at our target. Speaking of targets I am adjusting our target from $69.00 to $69.50.

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: 53.59 change: +0.21

Stop Loss: 49.65
Target(s): 53.95, 57.25
Current Option Gain/Loss: +61.4%, and +34.7
Time Frame: 5 to 6 weeks
New Positions: Yes, wait for a dip

Comments:
11/22 update: ESRX garnered some positive analyst comments today. Shares managed to set a new multi-month closing high. The stock appears to have resistance near $54.00 so don't be surprised if shares correct again before moving higher. 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 currently 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: 58.34 change: +2.31

Stop Loss: 53.75
Target(s): 59.75, 64.00
Current Option Gain/Loss: +23.6%
Time Frame: 4 to 6 weeks
New Positions: Yes, look for another dip

Comments:
11/22 update: This morning HUM announced a $790 million deal to buy Concentra Inc. Wall Street applauded the deal and sent shares of HUM higher with a +4.1% gain on the session. Fortunately, if you were ready we did get a chance to buy the dip near $55 again this morning. I am suggesting we sell half of our position at $59.75 and then plan on selling the rest with a target at $64.00. New stop loss at $53.75.

11/22/10 New stop @ 53.75
11/22/10 New (2nd) target at $64.00

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


McKesson Corp. - MCK - close: 65.12 change: -0.88

Stop Loss: 63.75
Target(s): 67.95, 70.75
Current Option Gain/Loss: -20.9%
Time Frame: 6 to 8 weeks
New Positions: Yes

Comments:
11/22 update: MCK ran into some profit taking today. Shares opened at $65.95 and slipped toward its 200-dma before paring its losses. I remain bullish and would use this dip as another entry point to buy calls. FYI: The P&F chart is bullish with an $85 target.

Current Position: Long the 2011 January $65 calls (MCK1122A65) Entry @ $3.10

Entry on November 22nd at $65.95
Earnings Date 01/26/11
Average Daily Volume = 2.7 million
Listed on November 20th, 2010


Nike Inc. - NKE - close: 85.92 change: +0.11

Stop Loss: 79.90
Target(s): 86.75, 89.50
Current Option Gain/Loss: +81.7%
Time Frame: 4 to 6 weeks
New Positions: Wait for a dip, see below

Comments:
11/22 update: NKE gapped open lower on Monday morning but managed to claw its way back into positive territory by the closing bell. We don't want to chase the stock here. Wait for a dip or a bounce near $84 before considering new bullish positions.

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


Union Pacific - UNP - close: 90.32 change: -1.50

Stop Loss: 88.99
Target(s): 96.25, 99.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
11/22 update: UNP and the railroad sector underperformed on Monday. UNP was downgraded to a "neutral" before the open and the stock traded toward the bottom of its recent trading range. More aggressive traders may want to use this dip as their entry point to buy calls. I am suggesting the rest of us wait for a breakout and use a trigger at $92.85.

Trigger @ 92.85

Suggested Position: Buy the 2011 January $95 calls (UNP1122A95)

Entry on November xxth at $ xx.xx
Earnings Date 01/20/11
Average Daily Volume = 2.9 million
Listed on November 20th, 2010


VimpelCom Ltd - VIP - close 15.70 change -0.10

Stop Loss: 14.80
Target(s): 16.75, 17.75
Current Option Gain/Loss: -42.8%
Time Frame: 6 to 8 weeks
New Positions: Yes, on dips

Comments:
11/22 update: Monday proved to be a very quiet session for VIP. The stock bounced from short-term support near $15.50. I don't see any changes from my previous comments. 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: 106.15 change: +1.07

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

Comments:
11/22 update: LZ displayed a little bit of strength today. Furthermore today's session has produced a bullish engulfing reversal pattern. These patterns normally need to see confirmation but it is a warning sign for the bears. More conservative traders may want to lower their stops toward the $108 area. The 30-dma and 50-dma should offer a little overhead resistance.

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 BULLISH PLAYS

iShares DJ Financial ETF - IYF - close 53.14 change -0.63

Stop Loss: 52.90
Target(s): 57.50, 59.75
Current Option Gain/Loss: -75.0%, and -23%
Time Frame: 6 to 8 weeks
New Positions: No

Comments:
11/22 update: Financial stocks struggled as investors wrestled with worries over Ireland and the rest of Europe. The IYF dipped to $52.81 this morning, which was enough to stop us out and close this trade. I would keep the IYF on your watch list and reconsider bullish positions on a close over $54.00.

If you bought the open this morning, the call opened at $0.65 our lost would have been -23%.

Closed Position: Long the December $55.00 CALLS, entry @ $2.00, exit @ 0.50 (-75%)

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

Annotated Chart:

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