Editor's Note:

The banking sector indices outperformed the rest of the market on Thursday Everything else just sort of meandered sideways without much direction.

-James

Current Portfolio:


CALL Play Updates

CH Robinson Worldwide Inc. - CHRW - close: 77.76 change: +0.61

Stop Loss: 71.90
Target(s): 74.90, 79.00
Current Option Gain/Loss: +195.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/09 update: After the closing bell tonight CHRW announced it was raising its quarterly cash dividend from 25 cents to 29 cents a share. The next dividend is payable on January 3rd. During the session CHRW continued to climb higher and tested the $78.00 level. Another strong day could put CHRW at our final target. Speaking of targets, this stock is short-term overbought. Readers will want to seriously consider exiting tomorrow (Friday) ahead of the weekend even if CHRW does not hit our target tomorrow. I am not suggesting new positions at this time. 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: 63.91 change: +0.80

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:
12/09 update: Railroad stocks were showing relative strength on Thursday. CSX added +1.2%. We are still waiting for a dip to launch call positions 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: 44.15 change: +0.69

Stop Loss: 41.45
Target(s): 44.90, 47.25
Current Option Gain/Loss: +125.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
12/09 update: CTL displayed relative strength with a +1.5% gain and a new two-year closing high. This move could fuel some short covering, which would accelerate gains. Our first target to take profits is at $44.90. If you're looking for a new entry point I'd wait for a dip toward $43.25.

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: 54.17 change: -0.23

Stop Loss: 49.65
Target(s): 53.95, 57.25
Current Option Gain/Loss: +35.7%
Time Frame: 5 to 6 weeks
New Positions: Yes, see below

Comments:
12/09 update: ESRX bounced around the $55-54 zone on Thursday. The stock has been churning sideways for over a week now. The path of least resistance seems to be up but I wouldn't be surprised to see ESRX retest $52. 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


Fastenal Co. - FAST - close: 58.27 change: -0.25

Stop Loss: 53.75
Target(s): 59.75, 62.50
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/09 update: FAST is our new candidate from last night. Shares slipped closer to $58 today. We want to launch bullish positions on a dip at $56.00. Conservative traders could wait for a dip closer to $55 or $54 before launching positions. If triggered our first target is $59.75.

FYI: FAST announced a special, one-time cash dividend of 42-cents on November 18th and all of the option strikes have been adjusted for this 42-cent dividend.

Trigger @ 56.00

Suggested Positions:
Buy the 2011 January $54.58 calls (FAST1122A54.58)

- or -

Buy the 2011 February $59.58 calls (FAST1119B59.58)

Entry on December xxth at $ xx.xx
Earnings Date 01/19/11 (unconfirmed)
Average Daily Volume = 880 thousand
Listed on December 8th, 2010


FedEx Corp. - FDX - close: 94.09 change: +1.28

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:
12/09 update: The transports were showing strength today and FDX bounced for a +1.3% gain as traders bought the dip near its rising 10-dma. Aggressive traders might want to consider new positions here. I'm still suggesting we wait for a dip to $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: 166.45 change: +0.31

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:
12/09 update: Once again the financials were the best performing sector and yet GS underperformed its peers. I didn't see anything specific to account for today's relative weakness (compared to the financials). We still want to wait for a dip. Currently our trigger to buy calls is at $160.25 but I might reconsider if GS bounces from $162 again.

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: 132.35 change: +0.22

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:
12/09 update: GWW turned in a very quiet session with shares drifting sideways in a narrow range. There is no change from my prior comment. 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 toward $128. FYI:

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: 56.08 change: -0.35

Stop Loss: 54.40
Target(s): 59.75, 64.00
Current Option Gain/Loss: -31.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/09 update: HUM is still slowly drifting lower under a bearish trend of lower highs. I am growing more and more cautious on this play. Shares are flirting with a breakdown under technical support at its 50-dma. If HUM does break the 50-dma there should still be some support near $55.00 but I'm no longer suggesting we buy dips at $55.00. More conservative traders may want to consider a tighter stop loss.

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: 87.47 change: +0.15

Stop Loss: 82.45
Target(s): 89.50, 94.50
Current Option Gain/Loss: +45.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/09 update: NKE spiked above $88 this morning but pared its gains by the close. I don't see any changes from my prior comment. 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.

We want to sell half our of January position 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: 72.90 change: -0.25

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:
12/09 update: OII still acts like it wants to correct lower. The morning rally failed at $75.00 but traders bought the dip at the 10-dma. 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: 71.29 change: +0.26

Stop Loss: 64.75
Target(s): 72.50, 74.90
Current Option Gain/Loss: +27.1%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/09 update: It was a quiet day for RIG with traders buying the dip near $70.00 this morning. The last several days is shaping up to look like a sideways consolidation. If you're looking for a new entry point I would prefer to open positions on a dip near $68.00.

- 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: 92.80 change: +0.33

Stop Loss: 87.90
Target(s): 96.25, 99.75
Current Option Gain/Loss: + 28.9%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/09 update: UNP gapped open higher this morning but gains faded after the first hour. The $92.00 level is short-term support but don't be surprised if UNP dips toward $90.00. I would consider new positions in the $92-90 area depending on your risk tolerance. More conservative traders might want to consider a tighter stop loss.

- 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: 73.04 change: +1.03

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:
12/09 update: Early this morning there was an article in a German newspaper that talked about UPS' CFO Kurt Kuehn and the company's plans to raise their dividend and increase their stock buyback plans in addition to making acquisitions with UPS' available cash. This report is the most likely culprit behind the stock's +1.4% gain and breakout to new 52-week highs. Sadly we're not in the stock yet. Currently our plan is to buy calls on a dip at $70.25 but I might reconsider if UPS dips to $71.00 again.

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: 77.63 change: -0.06

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:
12/09 update: There was no follow through lower for UTX so we remain on the sidelines waiting for a dip to $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: 86.28 change: +0.90

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:
12/09 update: The early morning spike higher in XEC faded but shares still posted a gain for the day. There is no change from my prior comment. 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: 27.17 change: +0.16

Stop Loss: 27.75
Target(s): 25.10, 24.25
Current Option Gain/Loss: -16.6%
Time Frame: 2 to 3 weeks
New Positions: Yes, see below

Comments:
12/09 update: The early morning gap open higher in EXPE failed but traders bought the dip midday and shares posted a +0.59% gain. The stock is nearing technical resistance at its 50-dma. Readers might want to wait for shares to roll over again before launching new bearish put positions.

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