Editor's Note:

The market strength continues to fuel new highs. CLF, GWW, and NUE all hit our target. NUE has been closed. I have adjusted our entry point for XEC.

-James

Current Portfolio:


CALL Play Updates

Caterpillar - CAT - close: 88.62 change: +1.17

Stop Loss: 83.75
Target(s): 84.85, 89.50
Current Option Gain/Loss: +203.5% & +263.2%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/02 update: The rally continues and CAT hit another all-time high. Shares tagged $88.89 intraday. Currently our final target is $89.50. Yet I would seriously consider exiting positions right now. I am raising the stop loss to $83.75. No new positions at this time but I would consider buying January or February calls on a dip or bounce near $84.

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

12/02 Consider exiting for a profit now, options are up +200%
12/02 New stop loss @ 83.75
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: 75.81 change: +0.75

Stop Loss: 71.90
Target(s): 74.90, 79.00
Current Option Gain/Loss: +104.3%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/02 update: CHRW continues to march higher and shares added +0.99%. The stock consolidated sideways most of the session only to see a late day surge. I don't see any changes from yesterday's comments. If you're looking for a new position I would wait for a dip near the $73.50 area.

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

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: 72.21 change: +1.75

Stop Loss: 65.75
Target(s): 71.50, 74.75
Current Option Gain/Loss: +46.6%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/02 update: Target achieved. CLF managed to rally another +2.48% and close at new seven-month highs. Our first target was hit at $71.50. The option was trading near $3.25 at the time. We still have a final target at $74.75 but December options only have about two weeks left and we may have to exit early. I would consider buying January calls on a dip near $70.00. Please note our new stop loss at $65.75.

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

12/02 Target hit @ 71.50, option @ $3.25 (+34.2%)
12/02 New Stop loss @ 65.75

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: 69.01 change: +0.70

Stop Loss: 63.90
Target(s): 69.50
Current Option Gain/Loss: +180.0%
Time Frame: 3 to 4 weeks
New Positions: No

Comments:
12/02 update: As expected retail same-store sales for November were strong. COST said their sales were up +9.0% versus analysts' estimates of +6.2%. The stock rallied another +1% on the news and shares hit $69.11 intraday. Our final target is $69.50 but I would seriously consider an early exit right here and if COST doesn't hit our target tomorrow I might close the play this weekend.

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: 64.03 change: +1.09

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:
12/02 update: The transports rallied again and this time the railroad index broke out to new highs. CSX surged toward its 52-week highs set last month near $64.00. There is no change from my prior comments. We don't want to chase this rally but I will adjust our trigger to buy the dip from $62.25 to $62.50.

Trigger to buy-the-dip @ $62.50 <-- new trigger

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

12/02: New trigger @ 62.50.
12/01: New trigger @ 62.25, New stop @ 59.90, New targets.

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: 43.98 change: +0.07

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:
12/02 update: The action in CTL today was a little disappointing. Shares swooned midday but managed to recover and close in positive territory. The trend is still up and I don't see any changes from my previous comments. 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: 54.08 change: -0.30

Stop Loss: 49.65
Target(s): 53.95, 57.25
Current Option Gain/Loss: +74.5%, and +45.2%
Time Frame: 5 to 6 weeks
New Positions: Yes, see below

Comments:
12/02 update: ESRX failed to participate in the market's widespread rally on Thursday. Instead ESRX churned sideways and began to fade lower into the closing bell. While today's relative weakness is disappointing the overall trend is still up. 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%)

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:
12/02 update: FDX is still running away from us. Shares spiked over $96.00 shortly after the opening bell. The stock is now up over $8 in the last four sessions. I would not want to chase it here. Wait for a dip. We have a buy-the-dip trigger at $91.00.

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

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: 131.16 change: +3.89

Stop Loss: 124.75
Target(s): 129.90, 134.00
Current Option Gain/Loss: +68.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/02 update: Target achieved. The short squeeze in GWW continues. The stock soared for a +3% gain to close at new all-time highs. The breakout past $128.00 is bullish and shares are gaining on above average volume. Our first target to take profits was hit at $129.90. I am raising our final target from $134.00 to $138.50. I am also raising our stop loss to $124.75. If you're looking for a new entry point I would consider buying calls on a dip near $128.00.

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

12/02: First target hit @ 129.90, option @ $4.10 (+64%)
12/02: New stop loss @ 124.75, New final target at $138.50

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: 57.47 change: +0.38

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:
12/02 update: HUM inched higher on Thursday but shares lagged the wider market. I don't see any changes from my previous comments. If you're looking for a new entry point I would wait for dips near the rising 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.

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

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

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: 87.83 change: +0.50

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:
12/02 update: NKE did not see a lot of movement on Thursday in spite of strong same-store sales numbers across the retail sector. Shares dropped early this morning but managed to recover and close positive. Shares hit $88.00 at their best levels today. I don't see any changes from my previous comments. I would be very tempted to exit the remaining December calls on any move over $88.00 again.

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


Transocean Ltd. - RIG - close: 70.93 change: +3.19

Stop Loss: 64.75
Target(s): 72.50, 74.90
Current Option Gain/Loss: +37.2%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/02 update: Oil stocks continued to rally on Thursday and RIG delivered the sort of move I was expecting yesterday. The stock soared +4.7% to a new six-month high and a close over round-number resistance at $70.00. Volume was very strong on this move. If you're looking for a new entry point I would wait for another dip towards $68.

- 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: 93.66 change: +2.24

Stop Loss: 87.90
Target(s): 96.25, 99.75
Current Option Gain/Loss: +80.9%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/02 update: UNP is finally starting to move. The stock broke through resistance in the $92 area to close at new all-time highs. If you were waiting for the breakout you got it! Personally, if you're still looking for an entry point I would wait for a dip near $92.50-92.00.

- 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 15.50 change +0.03

Stop Loss: 14.90
Target(s): 16.75
Current Option Gain/Loss: -47.6%
Time Frame: 6 to 8 weeks
New Positions: No

Comments:
12/02 update: I would say we're pretty lucky with this VIP play. The company reported earnings this morning that appear to have missed analysts estimates by 12 cents. VIP delivered a profit of 39 cents a share and wall street was looking for 51 cents. Revenues were also a miss. Yet shares managed to bounce from support near the $15.00-15.25 zone again. I am not suggesting new positions at this time. We have about two weeks left on our December calls. It's time to start looking for an exit.

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


Cimarex Energy Co. - XEC - close: 85.83 change: +2.09

Stop Loss: 78.90
Target(s): 87.40, 89.90
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/02 update: Wow! It's frustrating to watch this stock run higher without us. Shares opened at $84.06 and surged to new highs. I am raising our trigger to buy calls on a dip to $84.00 (instead of $83.25). We'll move the stop loss to $79.85.

Trigger @ 84.00

Suggested Position:
Buy the 2011 January $85 calls (XEC1122A85) current ask $4.50

Entry on December xxth at $ xx.xx
Earnings Date 02/17/11 (unconfirmed)
Average Daily Volume = 907 thousand
Listed on December 1st, 2010


CLOSED BULLISH PLAYS

Nucor Corp. - NUE - close: 40.26 change: +1.04

Stop Loss: 36.85
Target(s): 40.00
Current Option Gain/Loss: +97.6% and +129%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/02 update: Target achieved. Resources names continued to rally and NUE added +2.6% and hit an intraday high of $40.32. Our target to exit was hit at $40.00. Volume has been very strong on this rally. Readers may want to keep NUE on their watch list for another entry point. The 2011 January $37 calls closed with a bid of $3.65. The Jan $40s closed with a bid of $1.61.

Closed Position:
Buy the 2011 January $37.00 calls (NUE1122A37) Entry @ $1.72, exit @ $3.40 (+97.6%)
- or -
Buy the 2011 January $40.00 calls (NUE1122A40) Entry @ $0.61, exit @ $1.40 (+129%)

Chart:

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