Editor's Note:

The stock market slipped on European debt woes this Friday but overall the declines were pretty mild. I have adjusted our entry point on CSX and updated a few stop losses tonight.

-James

Current Portfolio:


CALL Play Updates

Ansys, Inc. - ANSS - close: 48.88 change: -0.11

Stop Loss: 47.25
Target(s): 52.45, 54.90
Current Option Gain/Loss: -13.3%
Time Frame: 4 to 6 weeks
New Positions: Yes

Comments:
11/27 update: ANSS is holding up well. Shares gapped open lower on Friday morning but quickly recovered and closed with a mild loss. Shares still look poised to breakout past its 2010 highs near $49.35. I would still consider new positions here at current levels or you could wait for a dip near $48.00 or a close over potential resistance at $50.00.

Current Position: Long the 2011 January $50.00 calls (ANSS1018L50) Entry @ $1.50

Chart:

Entry on November 24th at $48.75
Earnings Date 02/24/11 (unconfirmed)
Average Daily Volume = 651 thousand
Listed on November 13th, 2010


Caterpillar - CAT - close: 84.13 change: -0.56

Stop Loss: 79.90
Target(s): 84.85, 89.50
Current Option Gain/Loss: +11.4% & +33.3%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
11/27 update: CAT did not see much profit taking on Friday, which I view as a show of relative strength. If the pull back does continue we can use dips near $82.00 as a new entry point. Keep in mind that we do want to take some money off the table at our first target of $84.85 especially since we only have three weeks left before December options expire. If you do launch new positions I would buy January calls.

Note - I'm raising the stop loss to $79.90.

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

Chart:

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: 74.11 change: -0.11

Stop Loss: 70.75
Target(s): 74.90, 79.00
Current Option Gain/Loss: +55.5%, and +39.1%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
11/27 update: We only have three weeks left on our December calls. Therefore need to plan an exit soon. More conservative traders may want to take some money off the table now. I am adjusting our first target from $74.75 to $74.90 but when CHRW hits $74.90 we'll exit all of our December calls. We also want to sell part of our January calls at $74.90 but keep a position open for our $79 target. I want to point out that technical support at the 50-dma has risen to $71.03 so we will raise our stop loss to $70.75.

If you're looking for a new entry point I would wait for a dip into the $73-72 area and buy January calls.

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
11/27: New stop @ 70.75, new first target at $74.90

Chart:

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: 69.01 change: -0.65

Stop Loss: 64.75
Target(s): 71.50, 74.75
Current Option Gain/Loss: - 2.8%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
11/27 update: A bounce in the U.S. dollar and a dip in commodities sapped any strength in CLF but shares of this stock really didn't see that much profit taking. The trend is still bullish but if you're looking for new positions I would wait for another dip into the $66-65 zone. Our first target is $71.50.

Keep in mind that December options expire in three weeks!

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

Chart:

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: 67.22 change: -0.32

Stop Loss: 63.90
Target(s): 69.50
Current Option Gain/Loss: + 90.0%
Time Frame: 3 to 4 weeks
New Positions: No

Comments:
11/27 update: Unlike COST's parking lot, trading in this stock proved to be very quiet on Friday. Shares of COST spent most of the session in a 25-cent range. I don't see any changes from my prior comments. I'm not suggesting new positions at this time but another rebound in the $65 zone might change my mind on new entries. Our target to exit is $69.50. Keep in mind that December options expire in three weeks.

I also want to remind readers that COST is due to report earnings on December 9th and cautious traders do not want to hold over this event.

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

Chart:

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


CSX Corp. - CSX - close: 61.67 change: +0.03

Stop Loss: 59.75
Target(s): 64.25
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
11/27 update: CSX displayed some relative strength on Friday. Bulls quickly bought the dip on Friday morning and shares closed in positive territory. I am adjusting our strategy here. CSX has support near $60.00 and short-term resistance near $62.50 and then $64.50. I am suggesting we buy calls on a dip at $60.75 with a new stop loss at $59.75. If triggered at $60.75 our target to take profits will be at $64.25 and $67.25 (sell half at each target).

Trigger to buy-the-dip @ $60.75

Suggested Position: Buy the 2011 January $60 calls (CSX1122A60)

Chart:

Entry on November xxth at $ xx.xx
Earnings Date 01/18/11 (unconfirmed)
Average Daily Volume = 5.9 million
Listed on November 23rd, 2010


Express Scripts - ESRX - close: 52.51 change: -0.43

Stop Loss: 49.65
Target(s): 53.95, 57.25
Current Option Gain/Loss: + 4.0%, and + 3.3%
Time Frame: 5 to 6 weeks
New Positions: Yes, wait for a dip

Comments:
11/27 update: ESRX is still consolidating sideways. The stock is nearing potential short-term support near $52.00. I would consider new bullish positions on a dip into the $52-51 zone but readers may want to wait to buy a bounce first. 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.

Don't forget - December options expire in three weeks.

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

Chart:

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


W.W. Grainger Inc. - GWW - close: 125.75 change: -0.95

Stop Loss: 122.95
Target(s): 129.90, 134.00
Current Option Gain/Loss: -18.0%
Time Frame: 4 to 6 weeks
New Positions: Yes

Comments:
11/27 update: GWW turned in a quiet session. Shares gapped open lower and drifted sideways the rest of the shortened session. I would still launch positions in the $126-125.00 zone.
FYI: The stock could see a little short squeeze since the most recent data listed short interest at more than 5% of the 58.5 million share float (which isn't very big as far as floats go). FYI: The Point & Figure chart is bullish with a $140 target.

Current Position: Long the 2011 January $130 calls (GWW1122A130) Entry @ $2.50

Chart:

Entry on November 24th at $126.75
Earnings Date 01/25/11 (unconfirmed)
Average Daily Volume = 567 thousand
Listed on November 22nd, 2010


Humana Inc. - HUM - close: 56.79 change: -0.18

Stop Loss: 53.75
Target(s): 59.75, 64.00
Current Option Gain/Loss: - 5.2%
Time Frame: 4 to 6 weeks
New Positions: Yes, look for another dip

Comments:
11/27 update: HUM hasn't seen a lot of movement in the past week. Shares have essentially churned sideways near the $57.00 level. Overall I don't see any changes from my prior comments. I would look for dips in the $56-55 zone as a new entry point. 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.

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

Chart:

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: 64.51 change: -0.29

Stop Loss: 63.75
Target(s): 67.95, 70.75
Current Option Gain/Loss: -32.2%
Time Frame: 6 to 8 weeks
New Positions: No

Comments:
11/27 update: I remain concerned about our MCK play. Shares tested and bounced from support near $64 again on Friday morning. The low was actually $63.83, which was almost enough to stop us out. While support is holding, MCK is developing a trend of lower highs. I'm not suggesting new positions at this time. FYI: The P&F chart is bullish with an $85 target.

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

Chart:

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: 85.96 change: -0.57

Stop Loss: 81.45
Target(s): 86.75, 89.50
Current Option Gain/Loss: + 75.6%
Time Frame: 4 to 6 weeks
New Positions: Wait for a dip, see below

Comments:
11/27 update: After a strong first part of the week NKE gave back less than 1% on Friday. Shares are arguably short-term overbought here. I would wait for a dip or bounce near $84.00 before considering new bullish positions. Use January calls if you launch new positions. Our final target remains $89.50.

December options only have three weeks left.

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

11/24/10 Target hit @ 86.75, option @ $2.60 (+126%)

Chart:

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: 90.10 change: -0.27

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:
11/27 update: I don't see any changes to my prior comments on UNP. The stock is still consolidating sideways. Aggressive traders could buy another dip or bounce near the rising 30-dma. I am suggesting readers wait for a breakout and use a trigger at $92.85 to launch positions.

Trigger @ 92.85

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

Chart:

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 15.40 change +0.01

Stop Loss: 14.90
Target(s): 16.75, 17.75
Current Option Gain/Loss: -42.8%
Time Frame: 6 to 8 weeks
New Positions: Yes, on dips

Comments:
11/27 update: VIP provided us another entry point with the Friday morning dip to $15.16. Unfortunately the ensuing rally failed at the new trend of lower highs. I am not expecting a lot of action in VIP this week until the earnings report on December 2nd. More conservative traders do not want to hold over this report. I am raising the risk on this play by holding over the announcement.

If you choose to launch positions be sure to keep your position size small to limit your risk (and consider January options). I am inching up our stop loss to $14.90.

I want to emphasize that holding over VIP's earnings is higher-risk. If the stock crashes on its earnings report our position could get wiped out since December options only have three weeks left!

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

11/27/10 new stop @ 14.90

Chart:

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