Editor's Note:

The stock market pared back its intraday gains but we still had two candidates hit our profit targets today. CTL and NKE were the two candidates that hit our exit targets to take some money off the table. Plus, we are seeing some favorable action in EXPE.

-James

Current Portfolio:


CALL Play Updates

CH Robinson Worldwide Inc. - CHRW - close: 78.07 change: -0.05

Stop Loss: 72.90
Target(s): 74.90, 79.00
Current Option Gain/Loss: +204.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/13 update: CHRW spent the session drifting sideways near the $78 level. The market looks like it could be setting up for a little pull back this week. CHRW is short-term overbought so it's due for some profit taking and could easily drop toward the $76-75 zone. If you don't want to endure any short-term pain then I strongly suggest you take profits now. 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

12/11: New stop loss @ 72.90
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


Cummins Inc. - CMI - close: 106.69 change: +1.66

Stop Loss: 94.45
Target(s): 107.00, 114.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/13 update: We were really hoping to see a little pull back in CMI this week. Thus far it's not cooperating. Shares displayed relative strength with a +1.5% gain on slightly above average volume. There is no change from my weekend comments on CMI.

I am suggesting we use a dip to $100.50 as our entry point to buy calls. We want to start with small positions! Consider only buying half your normal position size. Just in case the correction pulls CMI toward the 50-dma near $95.00 we want to have some cash on the sidelines to double down near the 50-dma. FYI: Currently the Point & Figure chart is forecasting a $115 target.

Trigger @ $100.50

- Suggested Position -
Buy the 2011 January $105 calls (CMI1122A105)

- or -

Buy the 2011 March $110 calls (CMI1119C110)

Entry on December xxth at $ xx.xx
Earnings Date 02/02/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on December 11th, 2010


CSX Corp. - CSX - close: 63.78 change: -0.32

Stop Loss: 59.75
Target(s): 67.00, 69.50
Current Option Gain/Loss: -13.7% and - 8.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
12/13 update: Railroad stocks continued to drift sideways on Monday. CSX spiked open this morning, setting our entry point at $64.39. Unfortunately, the gains didn't last. CSX spent the rest of the day in a narrow range. If the market sees a pullback we can look for CSX to find support in the $62-60 zone. I would use that sort of dip as another entry point to build up positions.

- Current Positions - (We only have a small position open)

Buy the 2011 January $65 calls (CSX1122A65) Entry @ $1.75

- or -

Buy the 2011 February $65 calls (CSX1119B65) Entry @ $2.49

12/13: CSX opened at $64.39
12/11: New Entry Point Strategy. Buy half now.
12/11: New targets: 67.00, 69.50
12/02: New trigger @ 62.50.
12/01: New trigger @ 62.25, New stop @ 59.90, New targets.

Entry on December 13th at $64.39
Earnings Date 01/18/11 (unconfirmed)
Average Daily Volume = 5.9 million
Listed on November 23rd, 2010


CenturyLink, Inc. - CTL - close: 45.22 change: +0.59

Stop Loss: 42.75
Target(s): 44.90, 47.25
Current Option Gain/Loss: +350.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/13 update: Target achieved. The relative strength in CTL continues. Shares broke out to new two-year highs (again). Our first target to take profits was hit at $44.90. Please note that I'm raising our stop loss to $42.75 since broken resistance near $43.00 should offer some support. I'm not suggesting new positions at this time. Our final target is $47.25.

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

12/13: First Target Hit @ $44.90, option @ $0.85 (+325%)
12/01: Adjusted secondary target to $49.00

Chart:

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: 54.32 change: -0.44

Stop Loss: 49.65
Target(s): 53.95, 57.25
Current Option Gain/Loss: +34.7%
Time Frame: 5 to 6 weeks
New Positions: Yes, see below

Comments:
12/13 update: Aside from a little volatility this morning it turned out to be a quiet day for ESRX. Shares remain stuck in the $54-55 range. I don't see any changes from my weekend comments. I'm still warning readers to be ready for a correction back towards $52.00. If you're looking for a new entry point I would prefer to initiate positions on a dip or a bounce 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: 58.88 change: -0.29

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:
12/13 update: FAST spent Monday consolidating sideways. We are still waiting for a little correction to buy the dip. 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: 94.31 change: +0.33

Stop Loss: 87.75
Target(s): 94.75, 99.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/13 update: The Dow Jones Transportation index lost -0.8% yet FDX gained +0.3%. I could not find any specific headline to account for the relative strength. However, there were lots of articles in the news about today being FDX's busiest day in history. The company will handle nearly 16 million parcels globally, which is a +13% increase over last year's "busiest day". Between Thanksgiving and Christmas FDX expects to handle over 223 million shipments.

We are still waiting for a dip to $91.00 to launch bullish positions. Remember, earnings are coming out on Thursday morning. Readers may want to avoid initiating new positions even if FDX does hit our trigger in the next two days just so you can wait and see how the market will react to FDX's earnings report. Naturally, if you think FDX will surprise and the market moves higher on the news then you'll want to buy positions ahead of the report.

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: 169.48 change: +1.01

Stop Loss: 157.45
Target(s): 169.75, 177.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/13 update: GS is still showing strength and rallied toward resistance near $170 this afternoon. Actually shares almost hit $171. Over the weekend I cautioned readers that the $170-171 zone could be resistance. We're still waiting for a correction with a trigger to buy calls at $163.00.

Trigger @ 163.00

Suggested Positions:
Buy the 2011 January $170 calls (GS1122A170)

- or -

Buy the 2011 April $175 calls (GS1116D175)

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: 133.77 change: +0.10

Stop Loss: 124.75
Target(s): 129.90, 138.50
Current Option Gain/Loss: +124.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/13 update: GWW managed to tag new relative highs on Monday following a press release this morning that November 2010 sales were +14% higher than a year ago. I don't see any changes from my weekend comments on GWW. If the market sees any sort of pull back then GWW should correct toward the $130-128 zone. I'd prefer to launch new positions on a dip near $128. Our final target remains $138.50.

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: 56.54 change: +0.03

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

Comments:
12/13 update: News that a Virginia judge declared part of President Obama's healthcare reform laws to be unconstitutional briefly sent healthcare stocks higher on Monday. There are already cries for the case to go to the Supreme Court. Unfortunately for stock market bulls the gains in healthcare quickly faded. I remain cautious on shares of HUM. A close over Friday's high (57.11) could change my mind on buying calls again. A close under $56.00 would be bearish even though $55.00 should also offer some support. 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


Juniper Networks - JNPR - close: 36.16 change: +0.28

Stop Loss: 33.75
Target(s): 37.40, 39.85
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/13 update: JNPR spiked to a new three-year high on Monday but shares gave back most of their gains. The move looks like a short-term top and failed rally pattern. JNPR should find some support near $35.00. I am suggesting a trigger to buy calls on JNPR when the stock dips to $35.20. We'll use a stop loss at $33.75. Our first target is $37.40. Our second, longer-term target is $39.85. FYI:

Trigger to buy the dip @ $35.20

- Suggested Position -
Buy the 2011 January $35.00 calls (JNPR1122A35)

- or -

Buy the 2011 April $37.00 calls (JNPR1116D37)

Entry on December xxth at $ xx.xx
Earnings Date 01/25/11 (unconfirmed)
Average Daily Volume = 5.5 million
Listed on December 11th, 2010


Nike Inc. - NKE - close: 89.23 change: +1.43

Stop Loss: 83.90
Target(s): 89.50, 94.50
Current Option Gain/Loss: +90.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/13 update: Target achieved. It was a strong day for NKE. Shares gapped open higher and hit $90.52 intraday thanks to an analyst upgrade from "neutral" to "buy". Shares gave back most of their gains but still closed up +1.6%. Broken resistance near $88 should now offer some short-term support. I am inching our stop loss up to $83.90. More conservative traders may want to consider an early exit now. Officially the newsletter's final exit is the $94.50 mark. I am not suggesting new bullish positions at this time.

We had plans to sell half of our January position sat $89.50. Since NKE opened at $89.64 we got a little boost in our option price. The option opened at $5.51 (+98.2%).

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

12/13/10 Target Hit @ $89.64 (gap higher), option @ $5.51 (+98.2%)
12/13/10 New stop loss $83.90
12/11/10 New stop loss $83.49
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%)

Chart:

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: 72.80 change: +1.09

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:
12/13 update: A weaker dollar was boosting commodities and that helped fuel strength in the oil and oil service sectors. OII gained +1.5%. There is no change from my weekend comments. Use a trigger at $70.25. If shares hit our trigger to buy calls at $70.25 readers may want to start with small positions and then slowly build up to a normal position size.

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: 72.47 change: +0.24

Stop Loss: 66.25
Target(s): 72.50, 78.25
Current Option Gain/Loss: +49.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/13 update: RIG displayed relative strength and hit $73.93 intraday. More conservative traders may want to consider raising their stop loss. I am not suggesting new positions at current levels. Our final target is $78.25.

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

12/11/10 New target 78.25, new stop loss $66.25
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


Sherwin-Williams Co. - SHW - close: 78.18 change: +0.42

Stop Loss: 73.75
Target(s): 79.90
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/13 update: SHW posted another gain but the rally reversed midday. This could be a short-term top - at least I hope so. We want to see a correction. I am suggesting we wait for a dip to $76.10 and buy calls on the pull back. If triggered we'll use a stop loss at $73.75. Our first target is $79.90.

Trigger @ $76.10

Suggested Positions:

Buy the 2011 January $75.00 calls (SHW1122A75)

- or -

Buy the 2011 March $80.00 calls (SHW1119C80)

Entry on December xxth at $ xx.xx
Earnings Date 01/26/11 (unconfirmed)
Average Daily Volume = 675 thousand
Listed on December 9th, 2010


Union Pacific - UNP - close: 92.18 change: -0.46

Stop Loss: 87.90
Target(s): 96.25, 99.75
Current Option Gain/Loss: + 5.9%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/13 update: The early morning rebound attempt in UNP failed. Shares look poised to breakdown under $92.00 and retest support near the $90.00 area. I am suggesting readers wait for the dip near $90.00 (or wait from a bounce from $90) before launching new call positions. If you do initiate positions I would buy the February calls. 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: 72.77 change: -0.12

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:
12/13 update: It was a quiet day for UPS with shares trading sideways in a very narrow range near $73.00. UPS should have support near broken resistance at $70.00. Currently our plan is to buy calls on a dip at $70.25 but I might reconsider if UPS bounces near $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: 78.15 change: -0.25

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:
12/13 update: UTX spent Monday trading in the $79-78 zone. There is no change from my previous comment. Currently our plan is to 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: 86.00 change: +0.26

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:
12/13 update: Dollar weakness and oil strength gave the oil sector a boost. Yet the rebound in XEC was fairly weak. We're still hoping for a little pull back. 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)

- or - Buy the 2011

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: 27.44 change: +0.27

Stop Loss: 27.75
Target(s): 25.10, 24.25
Current Option Gain/Loss: + 8.3%
Time Frame: 2 to 3 weeks
New Positions: No

Comments:
12/13 update: Wow! EXPE performed well for us today. The stock gapped open higher but shares immediately failed at very clearly defined resistance at $27.60. The stock sank to a -4.77% decline and shares closed near their lows for the day, which is normally a bad sign for tomorrow. The catalyst for today's selling pressure could have been news that Microsoft (MSFT) was joining a group of businesses that oppose Google's (GOOG) proposed acquisition of ITA Software. ITA provides travel information to Microsoft, American Airlines and other companies (source: MarketWatch).

Prior to Monday's performance I was growing cautious on EXPE. Readers may want to reconsider new bearish positions if EXPE produces another failed rally in the $26.75-27.50 zone. Our first target to take profits is at $25.10.

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