Current Portfolio:


CALL Play Updates

Donaldson Company - DCI - close: 67.64 change: -0.56

Stop Loss: 63.80
Target(s): 69.50
Current Option Gain/Loss: - 4.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/01 update: Hmm... it looks like I need to issue a warning here. The action in DCI today is bearish. The stock rallied toward the mid November high and reversed. This has the potential to turn into a bearish double top pattern. I would expect a dip toward $66.00 or even $65.00. Wait for the dip (or a bounce) from these levels before considering new positions.

More conservative traders may just want to exit now. Our exit target has been $69.50 and the stock hit $69.43 this morning.

(small positions) - Suggested Positions -

Long JAN $65 call (DCI1221A65) Entry $4.50*

12/01/11 DCI hit $69.43. Our target is 69.50. The reversal looks bearish. Readers may want to go ahead and exit early now
11/30/11 new stop loss @ 63.80
11/30/11 DCI gapped higher at $66.15. Our trigger was $65.55.
*entry price is an estimate. Option did not trade on Wednesday morning.

Entry on November 30 at $66.15
Earnings Date 02/16/12 (unconfirmed)
Average Daily Volume = 306 thousand
Listed on November 29, 2011


Edwards Lifesciences - EW - close: 66.83 change: +0.80

Stop Loss: 61.95
Target(s): 69.50
Current Option Gain/Loss: Dec$65c: +35.8% & Jan$70c: +14.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/01 update: The rally in EW continues with the stock outperforming the market today thanks to EW's +1.2% gain. I am not suggesting new positions at this time. More conservative traders might want to consider raising their stop toward the $64 area.

- Suggested Positions -

Long DEC $65 call (EW1117L65) Entry $1.95

- or -

Long 2012Jan $70 call (EW1221A70) Entry $1.70

11/30 new stop loss @ 61.95
11/28 trade opened. EW gapped higher at $63.97
11/26 trade still not open. Adjusting stop loss to $59.90
11/23 still not open
11/22 not open yet

Entry on November 28 at $63.97
Earnings Date 02/02/12 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on November 21, 2011


Family Dollar Stores - FDO - close: 59.06 change: -0.36

Stop Loss: 56.45
Target(s): 64.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
12/01 update: FDO saw a small rally toward round-number resistance at $60.00 before paring gains and closing with a fractional loss. There is no change from my prior comments. We have a buy-the-dip trigger at $58.50.

Earlier Comments:
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 @ 58.50 (small positions)

- Suggested Positions -

buy the DEC $60 call (FDO1117L60)

- or -

buy the JAN $60 call (FDO1221A60)

11/30 New strategy to account for FDO's bullish breakout higher. We want to use a trigger at $58.50 to open bullish positions with a stop at $56.45. New target is $64.00. I've updated our option strikes.
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

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: 45.47 change: -0.25

Stop Loss: 42.45
Target(s): 48.25
Current Option Gain/Loss: +12.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
12/01 update: JBHT experienced a very minor pull back today. I would not be surprised to see shares correct lower toward their simple 10-dma or the $44.00 level. Look for a new entry point there.

Earlier Comments:
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.

- Suggested Positions -

Long 2012JAN $45 call (JBHT1221A45) Entry $2.05

11/30/11 new stop loss @ 42.45
11/29/11 triggered at $44.35

Entry on November 29 at $44.35
Earnings Date 01/30/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on November 22, 2011


NetApp, Inc. - NTAP - close: 36.92 change: +0.09

Stop Loss: 33.95
Target(s): 39.50
Current Option Gain/Loss: +23.5%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
12/01 update: NTAP managed to eke out another gain (+0.2%) thanks to an early afternoon rally that lifted it to new two-week highs. I don't see any changes from yesterday's comments. The stock is testing resistance near the bottom of its Nov. 17th gap down around the $36.90 area. Readers may want to wait for a dip into the $36.00-35.00 zone before considering new positions.

Earlier Comments:
I do consider a more aggressive trade. We want to keep our position size small to limit risk. FYI: Readers should note that there is a risk that NTAP might make an acquisition soon. There are rumors floating around that NTAP could buy Quantum (QTM) or CommVault (CVLT) in an effort to better compete with rival EMC. If NTAP does make a bid for either company typically shares of the buyer go down while shares of the target go up.

- Suggested Positions - (small positions)

Long JAN $35 call (NTAP1221A35) Entry $2.51

Entry on November 29 at $35.82
Earnings Date 02/16/12 (unconfirmed)
Average Daily Volume = 9.2 million
Listed on November 28, 2011


O'Reilly Automotive - ORLY - close: 77.70 change: +0.46

Stop Loss: 73.85
Target(s): 82.50
Current Option Gain/Loss: Dec$75c: -33.9% & Jan$80c: -10.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/01 update: Wow! I don't know what happened but the spreads just exploded on ORLY's Dec. $75 calls. I almost wonder if it's an error. The stock did manage to hit new two-week highs. The next hurdle for the bulls is ORLY's all-time highs set three weeks ago near $79.00. I am not suggesting new positions at this time.

Earlier Comments:
Our target is $82.50 but more conservative traders may want to exit in the $79.50-80.00 zone instead. FYI: The Point & Figure chart for ORLY is bullish with a $103 target.

- Suggested Positions -

Long DEC $75 call (ORLY1117L75) Entry $2.80

- or -

Long JAN $80 call (ORLY1221A80) Entry $1.50*

11/28/11 ORLY gapped open higher at $76.96, which was above our trigger to buy calls at $76.15.
*Jan $80 call did not trade today. Entry price is an estimate.

Entry on November 28 at $76.96
Earnings Date 02/16/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on November 26, 2011


Phillip Morris Intl. - PM - close: 75.69 change: -0.55

Stop Loss: 71.40
Target(s): 78.50
Current Option Gain/Loss: +108.9%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
12/01 update: PM hit a record high at $77.00 this morning but eventually gains faded. The stock hit some profit taking and closed down -0.7%. Don't be surprised if we see PM retest the $74.00 area soon. I am not suggesting new positions at this time.

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

11/30 new stop loss @ 71.40
11/23 adjusted stop loss to $69.49
11/22 trade opened. PM opened at $72.11

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

Alliance Resource Partners - ARLP - close: 72.69 chg: +1.24

Stop Loss: 72.55
Target(s): 60.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
12/01 update: ARLP outperformed the market with another push higher and shares closed up +1.7%. If we do not see ARLP roll over with a decline tomorrow then I'll drop it as a bearish candidate.

Earlier Comments:
I am suggesting we use a trigger at $68.45 to buy puts and we'll use a stop loss at $72.55. It's a bit wide for a stop but ARLP can be a volatile stock. Our target is $60.50. FYI: The Point & Figure chart for ARLP is bearish with a $62 target.

NOTE: Previously I did not list the January puts because they spreads were too wide. They have come in a bit. They're still uncomfortably wide but we'll list them as a potential trade.

Trigger @ 68.45 (small positions)

- Suggested Positions -

buy the DEC $65 PUT (ARLP1117X65)

- or -

buy the JAN $65 PUT (ARLP1221M65) bid $0.95/ask $1.75

Entry on November xx at $ xx.xx
Earnings Date 01/30/12 (unconfirmed)
Average Daily Volume = 45 thousand
Listed on November 26, 2011


SPDR S&P 500 ETF - SPY - close: 124.97 change: -0.02

Stop Loss: 127.55
Target(s): 120.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/01 update: The market essentially churned sideways on Thursday and the SPY closed almost unchanged on the session. The high today was $125.64. There is no change from my Wednesday night comments.

I am suggesting a trigger to open small bearish put positions at $126.00 on the SPY with a stop loss at $127.55. Our target is $120.50. We want to keep our position size small to limit our risk.

Trigger @ 126.00

- Suggested Positions -

buy the 2012Jan $120 PUT (SPY1221M120) current ask $3.16

Entry on December xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 224 million
Listed on November 30, 2011