Editor's Note:

Stocks extended their gains but the major indices tagged resistance and retreated. Traders should be cautious here.

We saw SHLD and UTX hit our exit targets. GMCR underperformed and hit our stop loss. The SINA trade has not been opened yet.

-James

Current Portfolio:


CALL Play Updates

Hewlett Packard - HPQ - close: 25.87 change: -0.05

Stop Loss: 22.90
Target(s): 29.50
Current Option Gain/Loss: +70.5%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
10/12 update: HPQ rallied to a new six-week high this morning at $26.29 but shares eventually faded. There was news that HPQ actually gained market share in the PC market even after the company announced it might spin off its PC business.

Short-term I am still concerned that HPQ is a bit overbought and due for a dip. No new positions at this time.

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

10/11 new stop loss @ 22.90
10/11 planned to sell half at the open
bid 2012 Jan. $24 call @ $3.60 (+68.2%)
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


Sina Corp. - SINA - close: 78.48 change: -3.30

Stop Loss: 70.85
Target(s): 94.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/12 update: Ouch! What happened to SINA today? The stock really underperformed with a -4.0% loss. Thankfully, SINA gapped open lower at $81.26 so our call trade was not opened. There was an intraday rally to SINA's 10-dma and then the stock fell off a cliff this afternoon. It looks like the reason for this bearishness was a Citigroup analyst had downgraded their price target on SINA from $165 to $93 in a note out today.

I am removing our entry point on SINA. We will keep the stock on the newsletter for one more day to see if there is any follow through on today's bearish reversal. No new positions in SINA at this time. Aggressive traders could turn bearish and buy puts instead.

No new positions at this time.

10/12 We are postponing bullish positions. Re-evaluate tomorrow.
10/12 Trade not opened. SINA opened lower.

Entry on October xx at $ xx.xx
Earnings Date 11/15/11 (unconfirmed)
Average Daily Volume = 8.0 million
Listed on October 11, 2011


PUT Play Updates

None. Currently there are no active put plays.


CLOSED BULLISH PLAYS

Green Mountain Coffee Roasters - GMCR - cls: 89.90 chg: -3.72

Stop Loss: 89.90
Target(s): 99.75
Current Option Gain/Loss: -57.8%
Time Frame: less than 2 weeks
New Positions: see below

Comments:
10/12 update: GMCR was a big underperformer in the NASDAQ. News that the company made a deal with Jarden to distribute more GMCR products with their Mr. Coffee line did not have a positive affect on the stock. Shares were selling off the first half of the day and hit our stop loss at $89.90.

The plan was to keep our position size small because GMCR is a volatile stock.

(Small positions) - Suggested Positions -

OCT $95 call (GMCR1122J95) Entry $4.65, Exit $1.96 (-57.8%)

10/12 stopped out at $89.90
10/10 trade opened. GMCR gapped higher at $93.71.

chart:

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


Sears Holding - SHLD - close: 70.11 change: +3.15

Stop Loss: 59.45
Target(s): 69.75
Current Option Gain/Loss: Oct$65 +124.0% & Nov $67.50: +70.1%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
10/12 update: Target achieved. SHLD had a big day. The stock rallied to an intraday high of $74.30, above its 200-dma, before paring its gains. The stock was up almost +11% just today before the afternoon pull back. Our target to exit was hit at $69.75.

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 -

OCT $65 call (SHLD1122J65) Entry $2.41, exit $5.40 (+124.0%)

- or -

NOV $67.50 call (SHLD1119K67.5) Entry $3.35, exit $5.70 (+70.1%)

10/12 target hit at $69.75
10/08 new stop loss @ 59.45, new target 69.75

chart:

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: 74.24 change: +0.50

Stop Loss: 69.75
Target(s): 74.50
Current Option Gain/Loss: + 109%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/12 update: Target achieved. UTX gapped open higher at $74.29 and rallied to $75.00 before paring its gains. Our exit target was hit at $74.50.

- Suggested Positions -

OCT $70 call (UTX1122J70) Entry $2.24, exit $4.70 (+109%)

10/12 target hit at $74.50
10/10 new stop loss at $69.75

chart:

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