Editor's Note:

Commodity-related stocks surged this morning. CLF gapped open above our exit target. The action in the market today looks like a short-term top. Hopefully that means we see a little pullback the rest of this week and we get use it as a new entry point!

-James

Current Portfolio:


CALL Play Updates

CH Robinson Worldwide Inc. - CHRW - close: 76.43 change: +0.49

Stop Loss: 71.90
Target(s): 74.90, 79.00
Current Option Gain/Loss: +130.4%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/07 update: The major indices managed to hit new two-year highs this morning. CHRW tagged another all-time high at $76.75 this afternoon. This stock displayed some relative strength and did not see the same precipitous drop that many sectors produced in the last hour of trading. I still expect a pullback in CHRW and would look for a dip toward the $75-74 zone. If you're looking for a new entry point I would prefer to buy calls on a dip near $74-73. Our final target is $79.00.

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


CSX Corp. - CSX - close: 64.11 change: +0.11

Stop Loss: 59.75
Target(s): 64.25, 67.25
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
12/07 update: CSX is still showing some relative strength and outperformed the Dow Jones railroad index. There is no change from my previous comment. Odds are growing quickly that this railroad stock will see a little pull back soon. I am suggesting we buy calls on a dip at $62.50.

Trigger to buy-the-dip @ $62.50

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

- or -

Suggested Position: Buy the 2011 February $65 calls (CSX1119B65)

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: 43.74 change: -0.07

Stop Loss: 41.45
Target(s): 44.90, 47.25
Current Option Gain/Loss: + 75.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
12/07 update: CTL spiked to a new two-year high this morning but gains faded and shares settled with a mild decline. There is no change from my previous comment. Currently I would consider new positions on dips near $43.00.

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: 54.23 change: +0.24

Stop Loss: 49.65
Target(s): 53.95, 57.25
Current Option Gain/Loss: +66.3%, and +42.3%
Time Frame: 5 to 6 weeks
New Positions: Yes, see below

Comments:
12/07 update: ESRX spent the day churning inside its current range of $54.75-53.00. Shares did manage to close higher. With less than two weeks left on our December position, I am suggesting we go ahead and exit our December calls early right here and now. The trend for ESRX is up but the major averages look vulnerable to a little pull back.

If you're looking for a new entry point I would consider buying January calls on a dip near $53-52.

We currently only have half a position open.

Closed Position:
Long the 2010 December $52.50 calls (ESRX1018L52.5) Entry @ $1.22, exit @ $2.03 (+66.3%)
- or -
Current Position:
Long the 2011 January $52.50 calls (ESRX1122A52.5) Entry @ $2.10

12/07: Exit the December calls. option @ $2.03 (+66.3%)
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: 92.66 change: -0.63

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:
12/07 update: FDX spiked higher at the open but quickly gave up its gains. There is no change from my previous comment. Our plan is to buy calls on a dip 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


Goldman Sachs - GS - close: 161.59 change: -1.06

Stop Loss: 152.75
Target(s): 169.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
12/07 update: When the stock market rolled over in the last hour of trading GS quickly followed suit and fell from $164 past the $162 level. We could see this stock hit our trigger tomorrow. The plan is to buy calls at $160.25. More conservative traders could wait for a dip closer to $158.00.

Trigger @ 160.25

Suggested Position: Buy the 2011 January $165 calls (GS1122A165) current ask $5.25

Entry on December xxth at $ xx.xx
Earnings Date 01/18/11 (unconfirmed)
Average Daily Volume = 7.2 million
Listed on December 2nd, 2010


W.W. Grainger Inc. - GWW - close: 132.63 change: +0.68

Stop Loss: 124.75
Target(s): 129.90, 138.50
Current Option Gain/Loss: +100.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/07 update: I blame the big spike higher in GWW this morning on another short squeeze. Shares hit $134.08 but eventually pared its gains. We should expect a correction toward the $128 area. If you're looking for new positions wait for the decline. FYI: Our options have doubled. More conservative traders may want to take profits now.

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

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: 56.11 change: -0.30

Stop Loss: 53.75
Target(s): 59.75, 64.00
Current Option Gain/Loss: -28.9%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/07 update: HUM is still slowly sinking. Shares came very close to their simple 50-dma. I am concerned that if the market drops sharply on profit taking this week that we could see HUM breakdown under support near $55.00. More conservative traders may want to consider a tighter stop loss. I would still consider new positions if we saw a strong bounce from $55.00.

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: 87.19 change: -0.54

Stop Loss: 82.45
Target(s): 86.75, 89.50
Current Option Gain/Loss: +120.0%, and +43.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/07 update: I am concerned the action today in the stock market's major indices looks like a short-term top. The same holds true for NKE. This isn't a surprise. We've been expecting a correction. Unfortunately the high this morning in NKE was $88.45. We had just lowered our exit for the December calls to $88.75. I don't want to wait any longer. We want to exit our December calls now! We'll update the data with tomorrow's open.

We still want to take profits (sell half) of our January calls at $89.50.

Closed Position:
Long the December $85.00 CALLS (symbol:NKE1018L85) Entry @ $1.15, exit @ $2.53 (+120%)

- or -

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

12/07/10 Exit the December calls now, option @ $2.53 (+120%)
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


Oceaneering International - OII - close: 72.87 change: +0.01

Stop Loss: 66.90
Target(s): 74.80, 79.75
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/07 update: In spite of the intraday volatility shares of OII are not moving. The stock lost one cent yesterday and gained one cent today. There is no change from my weekend comments. I am suggesting we use a trigger at $70.55. We'll start the play with a stop loss at $66.90. Our first target is $74.80. Our final target is $79.75. More aggressive traders could aim for the all-time highs near $85.

Trigger to buy @ $70.25

Suggested Position: Buy the 2011 January $75 calls (OII1122A75) current ask $2.90

- or -

Suggested Position: Buy the 2011 April $75 calls (OII1116D75) current ask $6.00

Entry on December xxth at $ xx.xx
Earnings Date 02/17/11 (unconfirmed)
Average Daily Volume = 584 thousand
Listed on December 4th, 2010


Transocean Ltd. - RIG - close: 69.68 change: -1.25

Stop Loss: 64.75
Target(s): 72.50, 74.90
Current Option Gain/Loss: + 6.7%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/07 update: RIG opened near $72 but profit taking took hold in spite of gains in crude oil today. This move looks like a short-term bearish reversal. I would expect RIG to dip back toward $68.00 or possibly the 50-dma near $66.00. Wait for the dip or a bounce near these levels before considering new bullish positions.

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

12/03/10 Target hit @ $72.50, option @ $4.95 (+67.7%)

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: 94.13 change: -0.29

Stop Loss: 87.90
Target(s): 96.25, 99.75
Current Option Gain/Loss: + 79.6%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/07 update: Warning! The action in UNP today looks like a short-term top. Shares spiked to $95.78 this morning but gave back all of its gains. I would expect a pull back toward $92.00 and possibly the $90 level. More conservative traders might want to consider a tighter stop loss. If you're looking for a new entry point wait for a dip or a bounce from these levels.

- 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


United Parcel Service - UPS - close: 71.69 change: +0.00

Stop Loss: 66.85
Target(s): 74.75, 78.50
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
12/07 update: The big headline for UPS today was news the company is now demanding customers show government-issued IDs for retail shipping. UPS moves 20 million parcels a day. After the recent mail bombs found on shipments from Yemen to Chicago, companies are trying to tighten security. The news really didn't have much impact on the stock. Shares did manage to hit new relative highs this morning but closed unchanged on the session. I'm suggesting a trigger to launch positions at $70.25. If triggered our first target is $74.75.

Trigger @ 70.25

Suggested Position:
Buy the 2011 January $70.00 call (UPS1122A70)

- or -

Buy the 2011 April $75.00 call (UPS1116D75)

Entry on December xxth at $ xx.xx
Earnings Date 02/01/10 (unconfirmed)
Average Daily Volume = 3.9 million
Listed on December 6th, 2010


United Technology Corp. - UTX - close: 78.54 change: +0.13

Stop Loss: 73.90
Target(s): 81.50, 84.75
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/07 update: UTX spiked to $79.41 this morning but quickly erased its gains to settle back in the $78-79 zone. There is no change from my prior comment. I am suggesting a trigger to buy calls at $77.10. Cautious traders could wait for a pullback closer to $76 or even $75. We will begin the play with a stop loss at $73.90, just under the rising 50-dma. Our first target is $81.50. UTX's all-time high is $82.50.
FYI: The Point & Figure chart is bullish with a $91 target for UTX.

Trigger to buy calls @ $77.10

Suggested Position: Buy the 2011 January $80 calls (UTX1122A80) current ask $1.63

- or -

Suggested Position: Buy the 2011 February $80 calls (UTX1119B80) current ask $2.45

Entry on December xxth at $ xx.xx
Earnings Date 01/26/11 (unconfirmed)
Average Daily Volume = 3.2 million
Listed on December 4th, 2010


Cimarex Energy Co. - XEC - close: 87.03 change: -0.25

Stop Loss: 79.85
Target(s): 87.40, 89.90
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/07 update: XEC hit new highs this morning at $88.69 but the gains didn't last. Today's action looks like a bearish reversal, which is good since we're waiting on a correction. Aggressive traders could try buying some very short-term puts since I'm expecting a drop back toward $84 but I would consider this a high-risk trade. Currently our plan is to buy calls on a dip at $84.00. Cautious traders could wait for a dip closer to $82 instead.

Trigger @ 84.00

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

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

Cliffs Natural Resources - CLF - close: 72.60 change: -1.03

Stop Loss: 67.75
Target(s): 71.50, 74.75
Current Option Gain/Loss: +77.6%
Time Frame: 4 to 6 weeks
New Positions: No

Comments:
12/07 update: Target achieved. Commodity-related names surged this morning. Shares of CLF gapped open higher at $74.96, hung there for a little while and then started to see some profit taking. On a short-term basis today's session has produced a bearish engulfing (reversal) candlestick pattern but these usually need to see confirmation.

Our final target to exit was $74.75 so the gap open higher immediately triggered our exit. The December $70 calls opened at $5.25, traded up to $5.50 before reversing.

Closed Position:
Long the 2010 December $70.00 CALL, Entry @ $2.42, exit @ $5.25 (+116.9%)

12/07 Target exceeded. Option @ $5.25 (+116.9%)
12/04 New stop loss $67.75
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