Editor's Note:

The market's widespread rally fueled a lot of breakouts and we're seeing some new all-time highs. I have adjusted our entry point triggers for CSX and FDX. Plus, CHRW and ESRX hit our targets. You'll also notice a few updated stop losses.

-James

Current Portfolio:


CALL Play Updates

Caterpillar - CAT - close: 87.45 change: +2.85

Stop Loss: 81.90
Target(s): 84.85, 89.50
Current Option Gain/Loss: +142.8% & +190.5%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/01 update: Widespread gains across the market helped fuel a +3.3% surge in shares of CAT. The stock actually broke through significant resistance near $85.00 and closed at new all-time highs! We are moving our stop loss to $81.90. Currently our remaining target to take profits is at $89.50. More aggressive traders may want to aim higher. I would still look for a dip into the $85-84 zone as a new entry point to buy calls (not Decembers).

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

12/01 New stop loss @ 81.90
11/30 Target hit @ 84.85. Option @ $1.85 (+32.1% and +58.1%)

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: 75.06 change: +1.35

Stop Loss: 71.90
Target(s): 74.90, 79.00
Current Option Gain/Loss: +111.1%, and +78.2%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/01 update: Strength in the transports pushed CHRW to a new all-time high over $75.00. CHRW quickly hit our first target at $74.90 this morning. The plan was to sell all of our December calls at this level and take partial profits on our January call position. We still have a final target at $79.00. Please note our new stop loss at $71.90. If you're looking for a new position I would wait for a dip near the $73.50 area.

Previous Comments:
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 secondary $79 target.

Closed Position:
Long the December $75.00 calls (CHRW1018L75) Entry @ $0.45, exit @ 0.95 (+111%)

- or -

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

12/01: New Stop loss @ 71.90
12/01: First target hit @ $74.90 Exit all December calls: $0.95 (+111.1%)
12/01: First target hit, take profits on January calls: $ $2.00 (+73.9%)
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: 70.46 change: +2.12

Stop Loss: 64.75
Target(s): 71.50, 74.75
Current Option Gain/Loss: +10.7%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/01 update: Material stocks performed well and CLF added +3.1%. Shares broke the short-term trend of lower highs. This looks like another bullish entry point to consider calls (instead of waiting for a dip near $66-65). Our first target is $71.50. Our secondary target is $74.75 but we may have to exit before then. December options expire in less than three weeks!

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: 68.31 change: +0.70

Stop Loss: 63.90
Target(s): 69.50
Current Option Gain/Loss: +140.0%
Time Frame: 3 to 4 weeks
New Positions: No

Comments:
12/01 update: Bullish sentiment for the retailers lifted COST above resistance near $68.00 and the stock closed at new two year highs. The gap open higher was a bonus since it allowed us to take profits above $68.00 (per last night's instructions). The December $65 call opened at $3.40. Please note that I'm moving the stop loss higher to $64.90. No new positions at this time. Our final target to exit is $69.50. Keep in mind that December options expire in less than 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
12/01/10: New stop loss @ 64.90
11/30/10: Take Profits Early, Sell half. Option @ $3.40 (+126%)

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: 62.94 change: +2.13

Stop Loss: 59.49
Target(s): 64.25, 67.25
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
12/01 update: The transportation space was very strong with the Dow Jones transportation index up +2.3% and closing at new two-year highs. The Dow Jones railroad index only gained +2.1% and has yet to breakout past its 2010 highs but it's close. Meanwhile CSX was very strong with a +3.5% gain and a breakout above the short-term trend of lower highs. We need to adjust our entry point. Aggressive traders could buy this rally today. I am still looking for a dip but we'll move our trigger to buy a dip to $62.25. We'll adjust our stop loss to $59.90. I'm moving our first target to $64.90 and our secondary target to $67.75.

Trigger to buy-the-dip @ $62.25 <-- new trigger

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

12/01: New trigger @ 62.25, New stop @ 59.90, New targets.

Chart:

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


CenturyLink, Inc. - CTL - close: 43.91 change: +0.92

Stop Loss: 41.45
Target(s): 44.90, 47.25
Current Option Gain/Loss: +50.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
12/01 update: The breakout in CTL continues. Shares rallied +2.1% to a new three-year high. Volume was very strong, which is bullish for us. I'm adjusting our secondary target from $47.25 to $49.00. If you were waiting for a close over resistance at $43.00 you got it. Otherwise I would look for a new entry point I would wait for a dip into the $43.25-43.00 zone.

FYI: Investors should know that CTL is currently involved with a $10.6 billion stock-swap merger with Qwest Communications (Q). The merger isn't supposed to be completed until the first half of 2011. The trend for both stocks is up and naturally looks very similar following the M&A announcement.

Current Position:
Long the 2011 January $45.00 calls (CTL1122A45) Entry @ 0.20

12/01: Adjusted secondary target to $49.00

Entry on November 29th at $42x55
Earnings Date 02/22/11
Average Daily Volume = 3.0 million
Listed on November 27th, 2010


Express Scripts - ESRX - close: 54.38 change: +2.29

Stop Loss: 49.65
Target(s): 53.95, 57.25
Current Option Gain/Loss: +92.6%, and +54.7%
Time Frame: 5 to 6 weeks
New Positions: Yes, see below

Comments:
12/01 update: Target achieved. ESRX displayed impressive relative strength with a +4.3% rally. Shares broke out past resistance near $54.00 to close at new all-time highs. Our first target to take profits was hit at $53.95. If you're looking for a new entry point I would wait for a dip toward $53 (buy January calls or later).

We currently only have half a position open.

Don't forget - December options expire in less than 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

12/01: First Target Hit @ $53.95. Dec's @ $2.20 (+80.3%). Jan's @ $3.10 (+47.6%)

Chart:

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


FedEx Corp. - FDX - close: 93.99 change: +2.87

Stop Loss: 88.45
Target(s): 94.75, 99.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/01 update: FDX performed well with a +3% gain but sadly we're still on the sidelines. Shares haven't pulled back yet. I remain bullish on FDX but don't want to chase it at current levels. Let's move our trigger from $90.25 to $91.00 and we'll move our stop loss to $88.45. Our first target is $94.75. We will set a secondary, longer-term target at $99.00.

FYI: FDX is due to report earnings on Dec. 16th. Holding over earnings is risky. More conservative traders will want to exit ahead of the announcement.

Suggested Position: TRIGGER @ $91.00 <-- new trigger

Buy the 2011 January $90.00 call (FDX1122A90) current ask $4.85

- or

Buy the 2011 April $95 call (FDX1116D95) current ask $5.00

Entry on December xxth at $ xx.xx
Earnings Date 12/16/10 (confirmed)
Average Daily Volume = 2.1 million
Listed on November 29th, 2010


W.W. Grainger Inc. - GWW - close: 127.27 change: +2.34

Stop Loss: 122.95
Target(s): 129.90, 134.00
Current Option Gain/Loss: + 2.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/01 update: GWW spiked higher this morning and shares tested their all-time highs from last month near $128. Today's strength looks like a new entry point to buy calls or you could wait for a dip toward $126.

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

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: 57.09 change: +1.05

Stop Loss: 53.75
Target(s): 59.75, 64.00
Current Option Gain/Loss: - 7.8%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/01 update: HUM spiked toward short-term resistance near $58.00 this morning. Unfortunately the stock has begun to roll over and the short-term trend of lower highs is still intact. I remain bullish on HUM but keep entry points to dips near the 50-dma. 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

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


Nike Inc. - NKE - close: 86.13 change: +0.97

Stop Loss: 82.45
Target(s): 86.75, 89.50
Current Option Gain/Loss: +156.5%, and +56.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/01 update: The market's widespread strength allowed NKE to soar to new highs again. Shares gapped open at $87.48 and hit $88.28 before paring its gains. Look for NKE to fill the gap with a dip toward $86.65. I would be very tempted to exit the remaining December calls on any move over $88.00 again. Please note our new stop loss at $82.45.

If you're looking for a new entry point wait for the next dip or bounce near $84.00. Our final target for the December position remains $89.50. December options have less than three weeks left. We will consider a higher target for the January calls.

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

- or -

(Second position)
Current Position:
Long the January $85.00 CALLS (symbol:NKE1122A85) Entry @ $2.78

12/01/10 New stop loss @ 82.45
11/30/10 Readers may want to exit December options early for a gain
11/30/10 Entry on January calls @ $2.78
11/29/10 Buy the bounce from $84.00
11/24/10 Target hit @ 86.75, Dec. option @ $2.60 (+126%)

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


Nucor Corp. - NUE - close: 39.22 change: +1.48

Stop Loss: 36.85
Target(s): 40.00
Current Option Gain/Loss: +65.1% and +88.5%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/01 update: Material names were big winners today. NUE soared +3.9% and closed above technical resistance at its 50 and 100-dma. Shares could easily hit our target to exit at $40.00 this week. If you're looking for a new entry point I would consider dips near $38.00 as a potential entry.

Our target is the $40.00 level. More aggressive traders could aim for the $41 region.

Current Position:
Buy the 2011 January $37.00 calls (NUE1122A37) Entry @ $1.72
- or -
Buy the 2011 January $40.00 calls (NUE1122A40) Entry @ $0.61

Entry on November 29th at $37.38
Earnings Date 01/26/11
Average Daily Volume = 3.5 million
Listed on November 27th, 2010


Transocean Ltd. - RIG - close: 67.74 change: +0.71

Stop Loss: 64.75
Target(s): 72.50, 74.90
Current Option Gain/Loss: -12.2%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/01 update: Wow! What happened to RIG today? The OSX oil services index broke out from its consolidation and the sector rallied to new multi-year highs. I would have expected RIG to really perform well today. Yet it appears the Obama administration's re-ban of drilling of Florida could have depressed shares of RIG. The stock did post a gain (+1%) but shares traded sideways. I would still consider new positions here but readers may want to see some strength first.

- Current Position -
Long the 2011 January $70.00 calls (RIG1122A70) Entry @ $2.95

Entry on November 30th at $68.18
Earnings Date 02/24/11 (unconfirmed)
Average Daily Volume = 6.3 million
Listed on November 29th, 2010


Union Pacific - UNP - close: 91.42 change: +1.31

Stop Loss: 87.90
Target(s): 96.25, 99.75
Current Option Gain/Loss: +24.3%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/01 update: UNP rallied +1.4% but that is somewhat disappointing given the market strength today. The stock saw its rally stall near resistance at $92.00. UNP does look poised to breakout past this resistance but if it can't do it on a day like today, when will it breakout? I would still consider new positions in the $91-90 zone but readers may want to limit their position size to keep their risk down.

- Current position -
Suggested Position:
Buy the 2011 January $95 calls (UNP1122A95) Entry @ $1.52

Entry on November 30th at $89.83
Earnings Date 01/20/11
Average Daily Volume = 2.9 million
Listed on November 20th, 2010


VimpelCom Ltd - VIP - close 15.47 change -0.20

Stop Loss: 14.90
Target(s): 16.75, 17.75
Current Option Gain/Loss: -33.3%
Time Frame: 6 to 8 weeks
New Positions: Yes, on dips

Comments:
12/01 update: VIP was a disappointment today. One would have expected that given the big gains in Europe and here in the States that VIP would have done well. Unfortunately, Goldman Sachs downgraded VIP from a "buy" to a "neutral" this morning. VIP lost -1.2% as a result. I'm not suggesting new positions at this time. VIP is due to report earnings tomorrow! Today was your last day to exit if you wanted to avoid earnings.
Don't forget that December options expire in less than three weeks. If VIP disappoints with its earnings results the value in our position could vanish.

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

11/27/10 new stop @ 14.90

Entry on November 8, 2010 @ 15.60
Earnings Date 12/02/2010 (unconfirmed)
Average Daily Volume: 3.5 million
Listed on November 3, 2010