Editor's Note:

Shares of Range Resources Corp. (RRC) hit new all-time highs on new takeover speculation. The stock hit our final target at $72.50.

Meanwhile the widespread market weakness pushed PX and TIF through our stop loss. We removed WFM from the newsletter (but keep it on your watch list).

-James

Current Portfolio:


CALL Play Updates

Check Point Software - CHKP - close: 56.36 change: -0.35

Stop Loss: 55.70
Target(s): 61.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
09/21 update: CHKP held up pretty well considering the market's widespread sell-off. The NASDAQ gave up -2.0% and the S&P 500 fell -2.9%. Shares of CHKP only lost -0.6%. Traders might want to consider buying a dip near $55.00 with a tight stop. Tonight we're going to stick to our plan and wait for a breakout past $58.00. Our trigger to buy calls is at $58.25.

Trigger @ 58.25

- Suggested Positions -

buy the OCT $60 call (CHKP1122J60)

Entry on September xx at $ xx.xx
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on September 20, 2011


Dollar Tree, Inc. - DLTR - close: 76.00 change: +0.31

Stop Loss: 73.75
Target(s): 76.00, 79.00
Current Option Gain/Loss: Oct$75: +44.6%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
09/21 update: Wow! I am impressed. DLTR managed to post a gain today. Shares are up +0.4% versus the -2.9% drop in the S&P 500. The high today was $77.76. I am still suggesting that cautious investors take money off the table now. Our final target is currently $79.00. Please note our new stop loss at $73.75. I am not suggesting new positions at current levels.

- Suggested Positions -

Long OCT $75 call (DLTR1122J75) Entry $2.35

09/21 new stop loss @ 73.75
09/19 new stop loss @ 72.25
09/17 new stop loss @ 71.75
09/15 new stop loss @ 71.45
09/15 1st Target hit at $76.00. Oct $75 call bid @ 3.20 (+36.1%)
09/15 planned exit for Sep. $75 call. bid $0.65 (+30%)
09/14 exit the September $75 calls ASAP (tomorrow morning)
09/07 trade is open. DLTR gapped open at $72.97
09/06 trade not open. Adjusted entry point strategy, stop loss, and targets.

Entry on September 7 at $72.97
Earnings Date 11/17/11 (unconfirmed)
Average Daily Volume = 2.2 million
Listed on September 3, 2011


Mead Johnson Nutrition - MJN - close: 74.23 change: -1.20

Stop Loss: 71.75
Target(s): 77.00, 79.50
Current Option Gain/Loss: Oct$70: + 7.6% & Oct$75: -21.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/21 update: MJN held up reasonably well until the last half hour of trading. Shares closed down -1.59% versus -2.9% for the S&P 500. Cautious traders may want to raise their stop loss toward the $73.50-74.00 zone. I would anticipate potential short-term support near $74.00 or the 10-dma (currently 73.80). However, I am focusing on the $72.50 zone. Prior resistance near $72.50 should be stronger support.

We are not suggesting new positions tonight. Look for a bounce near $72.50.

Earlier Comments:
NOTE: The spreads on the Oct. $75 calls are a lot wider than the spreads on the $70s. Buying the $75s would be a riskier bet.

- Suggested Positions -

Long OCT $70 call (MJN1122J70) Entry $5.20*

- or -

Long OCT $75 call (MJN1122J75) Entry $3.15

09/19 new stop loss @ 71.75
09/17 new stop loss @ 71.45
09/14 new stop loss @ 69.90
*09/14 entry price is an estimate

Entry on September 14 at $73.22
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on September 13, 2011


PUT Play Updates

Stanley Black & Decker - SWK - close: 50.91 change: -3.04

Stop Loss: 56.25
Target(s): 50.25, 46.00
Current Option Gain/Loss: Oct$50: +18.4%, & Oct$55: +30.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/21 update: The widespread market weakness has pushed SWK to a new 2011 low. Shares lost -5.6% today. Our first target to take profits is at $50.25. Please note our new stop loss at $56.25.

- Suggested Positions -

Long OCT $50 put (SWK1122V50) Entry $1.90

- or -

Long OCT $55 put (SWK1122V55) Entry $3.90

09/21 new stop loss @ 56.25

Entry on September 12 at $54.78
Earnings Date 10/18/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on September 10, 2011


CLOSED BULLISH PLAYS

Praxair Inc. - PX - close: 97.06 change: -4.45

Stop Loss: 97.75
Target(s): 104.80, 109.00
Current Option Gain/Loss: -33.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/21 update: Ouch! PX was hit with profit taking today. The stock sold off this morning with drop toward the $99 level. Then the sell-off continued this afternoon as stocks sold off on the FOMC announcement. PX hit our stop loss at $97.75 when it broke down under short-term support at $98.00 in the last 30 minutes of trading. Our option when from +38% to -33%.

- Suggested Positions -

OCT $105 call (PX1122J105) Entry $1.05, exit $0.70 (-33.3%)

09/21 stopped out @ 97.75
09/20 trade opened.
09/19 new stop loss @ 97.75

chart:

Entry on September 20 at $100.32
Earnings Date 10/26/11 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on September 17, 2011


Range Resources Corp. - RRC - close: 64.89 change: -0.94

Stop Loss: 59.90
Target(s): 69.75, 72.50
Current Option Gain/Loss: Oct$65: +142.8% & Oct$70: +262.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/21 update: Wow! Shares of RRC completely ignored the market's focus on the FOMC. Instead shares of RRC were soaring to new all-time highs on takeover rumors. Shares were up +19% intraday when they hit $77.24. The takeover fever cooled after word spread that RRC was not in talks with Shell.

Our second and final target was hit at $72.50 around the 11:00 o'clock hour. The bid on the October $65 call was near $8.50 (+142.8%), the option hit a high (ask) of $12.70. The bid on the October $70 call was near $5.25 (+262.0%), the high today was $10.20.

- Suggested Positions -

OCT $65 call (RRC1122J65) Entry $3.50, exit $8.50 (+142.8%)

- or -

OCT $70 call (RRC1122J70) Entry $1.45, exit $5.25 (+262.0%)

09/21 2nd target hit at $72.50
09/19 1st target hit @ 69.75
bid on Oct. $65 call @ $6.30 (+80%)
bid on Oct. $70 call @ $4.45 (+206%)
09/13 trade opened. RRC @ 63.12

chart:

Entry on September 13 at $63.12
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on September 8, 2011


Tiffany & Co - TIF - close: 72.19 change: -2.85

Stop Loss: 72.75
Target(s): 79.90, 83.50
Current Option Gain/Loss: - 47.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/21 update: The last half hour killed our TIF play too. The stock was hovering in the $73.50-74.50 zone for most of the day and then fell under $73.00 as the market accelerated lower late in the day. TIF closed the session down -3.7%. Our play was stopped out at $72.75. I would keep TIF on your watch list for a dip or a bounce near $70.00 or potential support at the 200-dma near $67.50.

The plan was to use small positions to limit our risk.

(Small Positions) - Suggested Positions -

OCT $80 call (TIF1122J80) Entry $2.22, exit $1.17 (-47.2%)
09/21 stopped out at $72.75 (on market wide drop)

chart:

Entry on September 20 at $76.54
Earnings Date 11/29/11 (unconfirmed)
Average Daily Volume = 2.7 million
Listed on September 19, 2011


Whole Foods Market - WFM - close: 70.05 change: -1.95

Stop Loss: 65.25
Target(s): 74.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/21 update: The stock market's reaction to the FOMC announcement was pretty ugly. While I would be tempted to buy calls on WFM on this dip to $70.00 I'd rather wait and see if there is any follow through lower in the broad market indices.

Our bullish trade on WFM was never opened. I a removing it from the play list but I would definitely keep this stock on your watch list for a bounce from what should be support near $68.00.

Our Trade never opened.

chart:

Entry on September xx at $ xx.xx
Earnings Date 11/02/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on September 17, 2011