Editor's Note:

Shares of DB are down -17% from our entry point. It might be time to take some money off the table. I am suggesting we sell at least half of our put position at the open on Monday.

The market's weakness the last few days has been ugly. I find it interesting that the S&P 500 closed at 1158 on Friday. In the Wednesday night new plays section of this newsletter I suggested readers watch the 50% retracement at 1158 or the 1150 level as potential support.

-James

Current Portfolio:


CALL Play Updates

Edwards Lifesciences - EW - close: 62.50 change: -0.45

Stop Loss: 59.90
Target(s): 69.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
11/26 update: Our trade on EW is still not open. The stock opened lower at $62.61 on Friday morning. There was a quick bounce that faded and eventually turned into a decline.

I am suggesting we try again. The market and EW will see an oversold bounce eventually. The plan is to buy calls on EW on Monday morning but only if both EW and the S&P 500 index open positive. More conservative traders can leave their stop in the $61.00-61.50 zone. I am moving our stop loss, should we get triggered, down to $59.90.

*See Entry Details Above*

- Suggested Positions -

buy the DEC $65 call (EW1117L65)

- or -

buy the 2012Jan $70 call (EW1221A70)

11/26 trade still not open. Adjusting stop loss to $59.90
11/23 still not open
11/22 not open yet

chart:

Entry on November xx at $ xx.xx
Earnings Date 02/02/12 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on November 21, 2011


Family Dollar Stores - FDO - close: 55.80 change: -0.10

Stop Loss: 53.75
Target(s): 59.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
11/26 update: FDO fell to $54.85 on Friday morning but managed to limit its losses to just 10 cents by the closing bell. Aggressive traders might want to buy this rebound. I am suggesting readers wait. We will adjust our entry point strategy to buy a dip at $54.50 with a tight stop loss at $53.75. Our new target is $59.50.

NOTE: I have adjusted our option strike price. We want to keep our position size small because the spreads on the options below are getting wide, making this trade more risky.

buy the dip Trigger @ 54.50 (small positions)

- Suggested Positions -

buy the DEC $57.50 call (FDO1117L57.5)

- or -

buy the JAN $60 call (FDO1221A60)

11/26 new strategy. buy a dip at $54.50, stop loss @ 53.75. Keep positions small because option spreads are wide.
11/22 not open yet

chart:

Entry on November xx at $ xx.xx
Earnings Date 01/04/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on November 21, 2011


JB Hunt Transport Services - JBHT - close: 42.75 change: -0.20

Stop Loss: 41.99
Target(s): 48.25
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
11/26 update: JBHT is holding up pretty well considering the weakness in the transportation average. The stock is churning inside the $42.50-44.00 zone. I don't see any changes from my prior comments.

JBHT has resistance near $44.00. I am suggesting a trigger to open bullish positions at $44.35. If triggered our multi-week target is $48.25. JBHT doesn't move super fast so give yourself time for the trade to work. FYI: The Point & Figure chart for JBHT is bullish with a $63 target.

Trigger @ 44.35

- Suggested Positions -

buy the 2012JAN $45 call (JBHT1221A45)

chart:

Entry on November xx at $ xx.xx
Earnings Date 01/30/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on November 22, 2011


Phillip Morris Intl. - PM - close: 71.31 change: +0.29

Stop Loss: 69.49
Target(s): 78.50
Current Option Gain/Loss: -19.0%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
11/26 update: The trading in PM on Friday mirrored the move in the major averages. Only shares of PM managed to close with a gain. Readers can choose to wait for a dip or a bounce near $70.00 or wait for a move past $72.50 as their new entry point to buy calls. Keep in mind that PM doesn't move very fast. You might want to consider buying March calls.

Earlier Comments:
Our multi-week target is $78.50. FYI: The Point & Figure chart for PM is bullish with a $95 target.

- Suggested Positions -

Long 2012 Jan $75 call (PM1221A75) Entry $1.12

11/23 adjusted stop loss to $69.49
11/22 trade opened. PM opened at $72.11

chart:

Entry on November 22 at $72.11
Earnings Date 02/09/12 (unconfirmed)
Average Daily Volume = 7.3 million
Listed on November 19, 2011


PUT Play Updates

Deutsche Bank - DB - close: 32.34 change: -0.12

Stop Loss: 37.55
Target(s): 30.50
Current Option Gain/Loss: Dec$35p: +61.5% & Jan$30p: +57.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/26 update: After several days of declines it looks like DB may have found some short-term support. Shares did post another decline but it did not hit a new relative low. I suspect DB could see an oversold bounce soon.

I am suggesting more conservative traders exit early now. We will sell half of our position at the open on Monday morning to lock in gain. We'll move our stop loss down to $36.55. Our final target for the remaining position is still $30.50.

Earlier Comments:
Keep position size small to limit risk. This is going to be a volatile trade. FYI: The Point & Figure chart for DB is bearish with a $30 target.

- Suggested Positions - (small positions)

Long DEC $35 PUT (DB1117x35) Entry $2.60

- or -

Long JAN $30 PUT (DB1221m30) Entry $2.09

11/26 new stop loss @ 36.55
11/26 Sell half at the open on Monday morning to lock in a gain.
11/23 new stop loss @ 37.55
11/23 more conservative traders may want to take profits now. The Dec $35 put (+61.5%) and the Jan $30 put (+62.6%)
11/21 new stop loss @ 38.75
11/12 new stop loss @ 41.55
11/11 DB gapped open higher at $39.00

chart:

Entry on November 11 at $39.00
Earnings Date 02/02/12 (unconfirmed)
Average Daily Volume = 4.3 million
Listed on November 10, 2011


Lululemon Athletica - LULU - close: 46.26 change: -0.44

Stop Loss: 50.25
Target(s): 42.50
Current Option Gain/Loss: Dec$47.50p: +10.1% & Jan$45p: +10.1%
Time Frame: Seven Trading Days or 6 weeks
New Positions: see below

Comments:
11/26 update: I am still concerned that LULU's decline is not fast enough. Shares spent the entire week within the $46-48 zone while the market was plunging lower. I am suggesting we exit this position on Monday morning at the open.

NOTE: More aggressive traders might want to consider holding over LULU's earnings report on December 1st. If LULU misses the stock could drop sharply.

- Suggested Positions -

Long DEC $47.50 PUT (LULU1117X47.5) Entry $3.54

- or -

Long 2012 JAN $45 PUT (LULU1221M45) Entry $3.63

11/26 plan to exit on Monday morning at the open
11/23 new stop loss @ 50.25
11/23 LULU is not falling very fast. Readers may want to consider an early exit now.
11/21 trade opened on LULU's gap down at $47.63.

chart:

Entry on November 21 at $47.63
Earnings Date 12/01/11 (confirmed)
Average Daily Volume = 2.8 million
Listed on November 19, 2011


PACCAR Inc. - PCAR - close: 37.28 change: +0.23

Stop Loss: 40.25
Target(s): 35.50
Current Option Gain/Loss: +40.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/26 update: The stock market's widespread bounce on Friday morning lifted PCAR to $38.13 before the rebound ran out of gas. PCAR still looks short-term oversold and due for a bounce. Watch the 50-dma overhead or the $40.00 level to act as resistance. I am not suggesting new positions at this time.

NOTE: More conservative traders may want to exit early now to lock in a gain (put is currently up +40%).

- Suggested (Small) Positions -

Long DEC $39 PUT (PCAR1117X39) Entry $1.75

11/23 new stop loss @ 40.25
11/21 new stop loss @ 41.50

chart:

Entry on November 18 at $39.42
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 3.7 million
Listed on November 17, 2011


Western Digital Corp. - WDC - close: 25.00 change: -0.59

Stop Loss: 27.05
Target(s): 21.00
Current Option Gain/Loss: Dec$25p: + 3.3% & Jan22.50p: +20.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/26 update: WDC underperformed the markets on Friday with a -2.3% drop but shares failed to close under support at $25.00. The low on Friday was $24.96. I would look for a drop under $24.90 as a new entry point to buy puts. We will lower our stop loss to $27.05.

Earlier Comments:
It is possible that the 2010 lows near $23.00 could be support but we're aiming for a drop to the $21.00-20.00 zone. We do want to keep our position size small because WDC has been very volatile the last few weeks.

- Suggested (Small) Positions -

Long DEC $25 PUT (WDC1117X25) Entry $1.49

- or -

Long JAN $22.50 PUT (WDC1221M22.5) Entry $1.13

11/26 new stop loss @ 27.05

chart:

Entry on November 18 at $26.04
Earnings Date 01/18/12 (unconfirmed)
Average Daily Volume = 6.4 million
Listed on November 17, 2011