Editor's Note:

There was no follow through on yesterday's short-term bearish reversal in the market. That doesn't mean we won't see more profit taking but bulls remain in control.

-James

Current Portfolio:


CALL Play Updates

CH Robinson Worldwide Inc. - CHRW - close: 77.15 change: +0.72

Stop Loss: 71.90
Target(s): 74.90, 79.00
Current Option Gain/Loss: +160.8%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/08 update: The relative strength in CHRW is impressive. Shares quickly rallied off the morning low and hit another new record high. The stock remains short-term overbought and due for some profit taking. If you're looking for a new entry point I would prefer to buy calls on a dip near $74. 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: 63.11 change: -1.00

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:
12/08 update: We have been waiting for a pull back in shares of CSX and it looks like shares are finally starting to sink. We want to buy calls on a dip at $62.50. Cautious traders could wait for a dip closer to $62 or $61.

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: 43.46 change: -0.28

Stop Loss: 41.45
Target(s): 44.90, 47.25
Current Option Gain/Loss: + 25.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
12/08 update: As expected CTL dipped toward the $43.00 level and traders jumped in. Shares found lots of buying pressure near $43.10. I would use this pull back as a new entry point to buy calls. I will point out that SmartMoney ran an article that included CTL discussing the sharp increase in short interest. There is a growing camp of investors betting against this stock. This raises the chance that CTL could see a short squeeze if the stock continues to show strength.

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: 54.40 change: +0.17

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

Comments:
12/08 update: ESRX churned sideways in a narrow range. Volume is fading during this consolidation. Shares act like they want to break higher but I'm concerned the major indices still look vulnerable to a decline. FYI: I updated our exit on the December calls at $2.01 (instead of $2.03).

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.

Current Position:
Long the 2011 January $52.50 calls (ESRX1122A52.5) Entry @ $2.10

12/07: Exit the December calls. option @ $2.01 (+64.7%)
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: 92.81 change: +0.15

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:
12/08 update: FDX slipped toward $92.00 this morning and managed a minor bounce. Volume was very light. 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: 166.14 change: +4.55

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:
12/08 update: I'm starting to think I've been too cautious on our GS entry point. Yesterday's decline suggested GS was poised to pull back into the $160-158 zone. Today financials were the market's best performers. GS surged +2.8%. I would not chase it here. I'm leaving our trigger to buy calls at $160.25 for now but another bounce from $162 could be a tempting entry.

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: 132.13 change: -0.50

Stop Loss: 124.75
Target(s): 129.90, 138.50
Current Option Gain/Loss: + 84.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/08 update: I'm not surprised to see a little profit taking after yesterday's failed rally. If the market corrects we should look for GWW to pull back toward $128. 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: 56.46 change: +0.32

Stop Loss: 54.40
Target(s): 59.75, 64.00
Current Option Gain/Loss: -25.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/08 update: HUM managed another bounce from its rising 50-dma but I don't find the action very bullish. HUM continues to drift lower under this trend of lower highs. There is no change from my prior comments. 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 am taking a more defensive posture on new positions. Wait for a close over $57.00. We'll up our stop loss to $54.40.

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

12/08/10 New stop @ 54.40
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: 87.32 change: +0.13

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

Comments:
12/08 update: NKE saw a small gap open higher that immediately failed but traders bought the dip at $86.40. Volume was pretty light on the session. We have less than two weeks left before NKE is due to report earnings. Cautious traders do not want to hold over this announcement. If you're looking for new positions wait for a dip toward $84.00. FYI: The December $85 calls opened at $2.25, spiked to $2.87 and then rolled over. Our exit is at $2.25.

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

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

12/07/10 Exit the December calls, option @ $2.25 (+95.6%)
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: 73.15 change: +0.28

Stop Loss: 67.75
Target(s): 74.80, 79.75
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/08 update: OII posted another gain but the action today looks bearish. The stock spiked to new highs on an upgrade this morning. Yet OII rolled over in the second hour of trading and the move looks like a bearish reversal. We are still waiting to buy calls on a dip at $70.25. Please note that I am raising our stop loss to $67.75.

Trigger to buy @ $70.25

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

- or -

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

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: 71.03 change: +1.35

Stop Loss: 64.75
Target(s): 72.50, 74.90
Current Option Gain/Loss: +23.7%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/08 update: The OSX oil service index managed a +0.3% gain today. RIG outperformed its peers with a +1.9% gain. I would wait for a dip toward $68 or its 50-dma before considering new 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: 92.47 change: -1.66

Stop Loss: 87.90
Target(s): 96.25, 99.75
Current Option Gain/Loss: + 25.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/08 update: Ouch! Railroads were not happy today. The group underperformed the rest of the market. Shares of UNP slipped -1.7%. I have been warning readers to look for a dip back toward $92.00. This should be support but if the market's major indices see another decline this week UNP could test $90.00. More conservative traders might want to consider a tighter stop loss. Aggressive traders could buy calls on this dip to $92. The rest of us may want to wait for a dip closer to $90.00.

- 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


United Parcel Service - UPS - close: 72.01 change: +0.32

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:
12/08 update: UPS is still consolidating sideways. We are waiting for a dip back toward broken resistance and what should be new support at $70.00. 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: 77.69 change: -0.85

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:
12/08 update: UTX underperformed the Dow Industrials with a -1% decline. We've been waiting for a decline. I'm suggesting we buy calls on a dip at $77.10. Cautious traders could wait for a pull back closer to $76.00 or even $75.00.
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)

- or -

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

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: 85.38 change: -1.65

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:
12/08 update: Right on cue XEC is seeing some profit taking. Let's hope it continues tomorrow. We want 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


PUT Play Updates

Expedia Inc. - EXPE - close: 27.01 change: +0.08

Stop Loss: 27.75
Target(s): 25.10, 24.25
Current Option Gain/Loss: - 8.3%
Time Frame: 2 to 3 weeks
New Positions: Yes, see below

Comments:
12/08 update: EXPE recovered from its late morning dip but shares struggled with the $27.00 level on the bounce. Volume was low. I would still consider new positions now or you could wait for another failed rally under resistance at $27.60.

Current Position: Buy the 2011 January $25 Put (EXPE1122M25) Entry @ $0.60

Entry on December 8th at $26.88
Earnings Date 02/10/11 (unconfirmed)
Average Daily Volume = 2.5 million
Listed on December 7th, 2010