Editor's Note:

It was a great day for the bulls. The S&P 500 delivered its best one-day gain in almost two months. If you look at the major indices today's rally is a bullish breakout above the multi-week trendline of lower highs.

We saw ALXN and CHKP both hit our profit targets.

I am suggesting we take some profits on HPQ.

Put plays on BCR and PXD were quickly stopped out with the market in rally mode.

-James

Current Portfolio:


CALL Play Updates

Green Mountain Coffee Roasters - GMCR - cls: 93.04 chg: +0.98

Stop Loss: 89.90
Target(s): 99.75
Current Option Gain/Loss: -18.2%
Time Frame: less than 2 weeks
New Positions: see below

Comments:
10/10 update: Warning! The action in GMCR today is troubling. The U.S. stock market just produced its best one-day gain in almost two months. The S&P 500 closed up +3.4% and the NASDAQ rallied +3.5%. Yet GMCR only gained +1.0%. That is very concerning. GMCR is a momentum stock. Shares should have outperformed today. Our trade was opened this morning but I am not suggesting new positions at this time. More conservative traders may want to raise their stop or scale back positions.

Currently we have a stop loss at $89.90 and an exit target at $99.75.

(Small positions) - Suggested Positions -

Long OCT $95 call (GMCR1122J95) Entry $4.65

10/10 trade opened. GMCR gapped higher at $93.71.

Entry on October 10 at $93.71
Earnings Date 12/07/11 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on October 08, 2011


Hewlett Packard - HPQ - close: 25.74 change: +0.86

Stop Loss: 21.45
Target(s): 29.50
Current Option Gain/Loss: +72.8%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
10/10 update: It was another strong session for HPQ. Shares hit $25.99 before paring its gains and closing up +3.4%. I am somewhat concerned that the late August, early September highs near $26.00-26.50 and its simple 50-dma near $26.20 could be overhead resistance. Therefore I am suggesting we take some money off the table immediately. Sell half of our position now (we'll adjust for the open tomorrow morning). The bid on the 2012 January $24 call is currently at $3.70 (+72.8%). Our final target remains $29.50.

Earlier Comments:
I am not suggesting new positions at this time. The next level of resistance for HPQ is the $26.25-26.50 zone.

- Suggested Positions -

Long 2012 Jan. $24 call (HPQ1221A24) Entry $2.14

10/10 Take some $$ off the table. Sell 1/2 at the open tomorrow
09/27 new stop loss @ 21.45

Entry on September 23 at $22.52
Earnings Date 11/21/11 (unconfirmed)
Average Daily Volume = 26.6 million
Listed on September 22, 2011


Sears Holding - SHLD - close: 64.90 change: +2.78

Stop Loss: 59.45
Target(s): 69.75
Current Option Gain/Loss: Oct$65 - 2.4% & Nov $67.50: - 4.4%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
10/10 update: SHLD outperformed the market today with a +4.4% gain. The stock managed to briefly trade above resistance at its 100-dma with an early morning rally to $65.80. I am not suggesting new positions tonight.

Earlier Comments:
It's worth noting that the Point & Figure chart on SHLD has reversed higher and is now pointing to an $83 target. FYI: The most recent data listed short interest at 47% of the float.

- Suggested Positions -

Long OCT $65 call (SHLD1122J65) Entry $2.41

- or -

Long NOV $67.50 call (SHLD1119K67.5) Entry $3.35

10/08 new stop loss @ 59.45, new target 69.75

Entry on October 7 at $64.13
Earnings Date 11/17/11 (unconfirmed)
Average Daily Volume = 644 thousand
Listed on October 06, 2011


United Technologies - UTX - close: 73.75 change: +2.29

Stop Loss: 69.75
Target(s): 74.50
Current Option Gain/Loss: +94.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/10 update: UTX is seeing a bullish breakout above technical resistance at its 50-dma today. The stock gapped open higher and surged to a +3.2% gain. Our final target is $74.50. More aggressive traders could aim a little higher. Please note we are raising our stop loss to $69.75.

More conservative traders may want to take profits now with the Oct. $70 call up +94%.

NOTE: We do not want to hold over UTX's earnings report on Oct. 19th.

- Suggested Positions -

Long OCT $70 call (UTX1122J70) Entry $2.24

10/10 new stop loss at $69.75

Entry on October 05 at $69.61
Earnings Date 10/19/11 (confirmed)
Average Daily Volume = 6.3 million
Listed on October 04, 2011


PUT Play Updates

None. Currently there are no active put plays.


CLOSED BULLISH PLAYS

Alexion Pharmaceuticals - ALXN - close: 67.88 change: +2.70

Stop Loss: 61.75
Target(s): 67.90
Current Option Gain/Loss: +100.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/10 update: Target achieved. The stock market's huge rally on Monday helped fuel a +4.1% gain in ALXN. Shares hit an intraday high of $68.16. Our target to exit was hit at $67.90.

- Suggested Positions -

OCT $65 call (ALXN1122J65) Entry $2.00, exit $4.00 (+100%)

10/10 target hit at $67.90
10/08 new stop loss @ 61.75

chart:

Entry on October 05 at $63.16
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on October 04, 2011


Check Point Software - CHKP - close: 57.81 change: +1.80

Stop Loss: 53.45
Target(s): 55.75 , 57.75
Current Option Gain/Loss: +86.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/10 update: Target achieved. Shares of CHKP continued to surge and the stock rallied to resistance near $58.00. CHKP actually hit $58.31 intraday. Our final target was hit at $57.75. The stock is now at the top of its trading range and closed just under resistance.

- Suggested Positions -

OCT $55 call (CHKP1122J55) Entry $1.80, exit $3.35 (+86.1%)

10/10 final target hit at $57.75
10/06 new stop loss @ 53.45
10/06 1st target hit at $55.75
bid on Oct. $55 call @ 2.30 (+27.7%)
10/03 testing support near $51.00, consider an early exit
10/01 readers may want to consider an early exit now.
09/26 trade opened.

chart:

Entry on September 26 at $53.00
Earnings Date 10/18/11 (confirmed)
Average Daily Volume = 1.6 million
Listed on September 20, 2011


CLOSED BEARISH PLAYS

CR Bard Inc. - BCR - close: 86.43 change: +2.50

Stop Loss: 86.15
Target(s): 80.15
Current Option Gain/Loss: -22.0%
Time Frame: less than 2 weeks
New Positions: see below

Comments:
10/10 update: Monday was the best one-day rally in the stock market in about two months. I'm not surprised that our new BCR put play has been stopped out. Shares gapped open higher at $85.13 (our entry point) and quickly hit our stop loss at $86.15.

The larger trend for BCR is still down. I'd keep it on your watch list.

- Suggested Positions -

OCT $85 PUT (BCR1122V85) Entry $2.50, exit $1.95 (-22%)

10/10 stopped out at $86.15
10/10 trade opened on gap higher at $85.13

chart:

Entry on October 10 at $85.13
Earnings Date 10/17/11 (unconfirmed)
Average Daily Volume = 976 thousand
Listed on October 08, 2011


Pioneer Natural Resources - PXD - cls: 71.42 chg: +2.97

Stop Loss: 71.35
Target(s): 63.50
Current Option Gain/Loss: -48.3%
Time Frame: less than 2 weeks
New Positions: see below

Comments:
10/10 update: Our new put play on PXD didn't last very long. Energy-related stocks were big outperformers today with the stock market's technical breakout on Monday. Shares of PXD opened at $69.28 and hit our stop loss at $71.35 before the closing bell.

- Suggested Positions -

OCT $65 PUT (PXD1122V65) Entry $1.55, exit $0.80 (-48.3%)

10/10 stopped out at $71.35
10/10 PXD gapped open higher at $69.28

chart:

Entry on October 10 at $69.28
Earnings Date 11/01/11 (confirmed)
Average Daily Volume = 2.0 million
Listed on October 08, 2011