Editor's Note:

The S&P 500 index continues to post gains and closed near new relative highs.

I am suggesting an early exit for our DLTR and AKAM trades.

Current Portfolio:


CALL Play Updates

BRCM - Broadcom - close: 35.35 change: +1.02

Stop Loss: 33.25
Target(s): 38.50
Current Option Gain/Loss: +13.3%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/11/12 update: BRCM shot higher on Friday thanks to an analyst upgrade to "outperform". The rally pushed shares past resistance at its 100-dma and the $35.00 level with a +2.9% gain on the session. The next challenge for the bulls could be the mid June peak at $35.54 and then the $36.00 level, which was support back in late April. I am not suggesting new positions at this time.

- Suggested Positions -

Position: Nov $36.00 Call (BRCM1217K36) entry $1.80

08/08/12 new stop loss @ 33.25
no follow through, turning cautious
08/07/12 triggered @ $34.75
08/06/12 adjust stop loss to $32.45

chart:

Entry on August 07 at $34.75
Average Daily Volume = 10 million
Earnings Oct-23rd
Listed on Aug 4, 2012


Caterpillar - CAT - close: 88.94 change: +0.54

Stop Loss: 84.90
Target(s): 91.50
Current Option Gain/Loss: +19.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/11/12 update: CAT continues to rally and is fast approaching what could be round-number resistance at the $90.00 level. More conservative traders may want to take profits early as CAT gets close to $90.00. I would expect a short-term pullback at $90 before CAT moves higher. Our target remains $91.50. I am not suggesting new positions at current levels.

Earlier Comments:
I do consider this somewhat aggressive. CAT's recent earnings were strong and the company raised guidance but its stock price is probably still vulnerable to negative economic headlines. Furthermore the $90.00 level might be round-number resistance.

- Suggested (SMALL) Positions -

Long Sep $90 call (CAT1222I90) Entry $1.90

08/07/12 triggered @ $87.25

chart:

Entry on August 07 at $87.25
Average Daily Volume = 8.6 million
Listed on August 6, 2012


Celgene Corp. - CELG - close: 71.94 change: +0.69

Stop Loss: 69.90
Target(s): 75.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/11/12 update: CELG has spent the last four days churning sideways in the $70.75-72.00 zone. Friday's rally to the top of this range leaves CELG poised for a bullish breakout higher. I am suggesting a trigger to buy calls at $72.25. Our target is $75.75.

FYI: The Point & Figure chart for CELG is bullish with an $81 target.

Trigger @ 72.25

- Suggested Positions -

buy the Sep $75 call (CELG1222I75)

chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 3.4 million
Listed on August 7, 2012


Dollar Tree - DLTR - close: 50.72 change: -0.94

Stop Loss: 49.45
Target(s): 54.50
Current Option Gain/Loss: -23.6%
Time Frame: exit prior to earnings on Aug. 16th
New Positions: see below

Comments:
08/11/12 update: We are growing increasingly worried about DLTR. What looked like a bullish breakout higher past its trend of lower highs has reversed. Friday's close left DLTR under its 100-dma and the $51.00 level. There is a chance that DLTR might bounce near its recent lows near $50.00 but we do not want to risk it.

I am suggesting an early exit immediately (Monday morning) to cut our losses.

- Suggested Positions -

Position: Long Sept $52.50 Call (DLTR1222I52.5) @ $1.90

08/11/12 exit on Monday morning
08/06/12 new stop loss @ 49.45, adjust time frame to exit prior to Aug. 16th earnings report

chart:

Entry on Aug 3rd at $ 51.42 (gap open)
Average Daily Volume = 1.5 million
Listed on Aug 2, 2012


PPG Industries - PPG - close: 110.82 change: -0.55

Stop Loss: 109.75
Target(s): 117.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
08/11/12 update: We are not giving up on PPG just yet. Shares underperformed on Friday but traders bought the dip near $110 and its 10-dma. We are still waiting for a bullish breakout past resistance.

I am suggesting a trigger to buy calls at $112.25. We'll use a stop loss at $109.75. The $115 level could be resistance but we are aiming for $117.50. FYI: The Point & Figure chart for PPG is bullish with a $137 target.

Trigger @ 112.25

- Suggested Positions -

buy the Sep $115 call (PPG1222I115)

chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 1.3 million
Listed on August 8, 2012


Qualcomm - QCOM - close: 61.98 change: -0.02

Stop Loss: 57.75
Target(s): 64.50
Current Option Gain/Loss: +22.9%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/11/12 update: After a strong week QCOM managed to hold on to its gains with a sideways move on Friday. The stock is up four weeks in a row so I would not be surprised to see a little pullback in QCOM soon. A dip in the $61.00-60.50 zone could be a bullish entry point. More conservative traders may want to start adjusting their stop loss higher.

- Suggested Positions -

Position: Oct $62.50 Call (QCOM1222J62.5) entry $1.70

08/07/12 triggered @ 60.51

chart:

Entry on August 07 at $60.51
Average Daily Volume = 1.5 million
Listed on Aug 4, 2012


WellPoint Inc. - WLP - close: 57.91 change: +1.12

Stop Loss: 54.40
Target(s): 59.75
Current Option Gain/Loss: +36.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/11/12 update: WLP continues to show relative strength. The stock outperformed on Friday with a +1.9% gain. I would not chase it here. More conservative traders might want to start adjusting their stop loss higher. Broken resistance near $56.00 should be new support.

- Suggested Positions -

Long Sep $57.50 call (WLP1222I57.5) Entry $1.60

08/08/12 triggered @ 56.50

chart:

Entry on August 08 at $56.50
Average Daily Volume = 4.4 million
Listed on August 7, 2012


PUT Play Updates

Akamai Technologies - AKAM - close: 35.97 change: -0.24

Stop Loss: 36.75
Target(s): 32.00
Current Option Gain/Loss: -54.2%
Time Frame: 2-4 weeks
New Positions: see below

Comments:
08/11/12 update: AKAM underperformed the market's major indices on Friday. Unfortunately this stock has not been cooperating with us the last several days. We want to exit early and cut our losses. I am suggesting an exit on Monday morning. The current bid is 70 cents.

- Suggested Positions -

Position: Long Sept $34 PUT (AKAM1222U34) @ $1.53

08/11/12 prepare to exit
08/02/12 triggered @ $34.85

chart:

Entry on Aug 2nd at $ 34.85
Average Daily Volume = 3.0 million
Listed on July 30, 2012


Edwards Lifesciences - EW - close: 98.17 change: -0.13

Stop Loss: 100.25
Target(s): 91.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/11/12 update: EW spent Friday's session hovering just underneath its 50-dma. I do not see any changes from my Thursday night comments.

I am suggesting a trigger to open bearish positions at $97.75. Our target is $91.50. FYI: The Point & Figure chart for EW is bearish with an $86 target.

Trigger @ 97.75

- Suggested Positions -

buy the Sep $95 PUT (EW1222u95) current ask $2.40

chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 950 thousand
Listed on August 9, 2012


FB - Facebook - close: 21.81 change: +0.80

Stop Loss: 23.25
Target(s): 17.00
Time Frame: 2-4 weeks
Current Option Gain/Loss: -37.9%
New Positions: see below

Comments:
08/11/12 update: According to the press, FB's CFO Mr. Ebersman was in New York this past week trying to convince large investors to hold on to their FB stock before the next lock up period expires. That's going to be a hard sell. This coming week is the next big lock up expiration. The exact date is a little unclear. I've seen it listed as August 15, 17, or the 18th. The 18th is a Saturday and I suspect it's probably this Wednesday (Aug. 15th).

This coming lock up is for about 270 million shares. That would increase the float by about 40%. There is another (huge) lock up expiration of 1.2 billion shares in November. One of the problems FB faces is the expectation for rising taxes on capital gains. Investors are going to WANT to sell their FB stock now before we hit the year 2013 to avoid paying higher taxes on their stock.

At this point any rally in FB is probably a shorting opportunity but it remains a volatile stock. If somehow we do get stopped out prior to the lock-up expiration date, then nimble traders may want to reload their bearish positions. We currently have a stop loss at $23.25.

Earlier Comments:
Facebook has turned into the stock everyone loves to hate. Facebook has 674 million shares outstanding as of Friday. On August 15th another 268 million shares will see their lockup expire and become available for trading. That is 40% additional shares. If you were an investor or employee and you watched your shares decline from $35 to $20 ahead of your lockup expiration you are probably just waiting for an opportunity to sell. Another factor is that taxes are due on the awarded shares regardless of whether they are sold. That means employees have a big tax bill and they have not been able to sell those shares to pay the taxes. That is an additional incentive to pull the trigger on at least part of their position on August 15th.

Facebook has hundreds of detractors and they seem to be racing each other trying to put a lower price target on the stock. Mark Hulbert was on CNBC on Friday with a $13.80 price target based on a bunch of different metrics.

Facebook also has the various lawsuits over the IPO including the valuation and the various claims made about users and revenue in the days leading up to the IPO. There are plenty of clouds and no real catalysts to pump up the stock.

Facebook said expenses grew by 60% in Q2 and they would grow faster in Q3/Q4. That means earnings will decline.

I am recommending a September option with plans to exit (some time) after the August 15th share lock up expiration.

Suggested Positions

current position: Sept $20 PUT (FB1220U20) entry $1.45

08/07/12 triggered @ 20.95
08/06/12 adjust entry trigger to $20.95

chart:

Entry on August 07 at $20.95
Average Daily Volume = 80.0 million
Listed on August 5, 2012


iShares Russell 2000 ETF - IWM - close: 79.92 change: -0.28

Stop Loss: 80.75
Target(s): 76.50
Time Frame: 3-5 weeks
New Positions: Yes, see below

Comments:
08/11/12 update: The small caps underperformed the large caps on Friday. The IWM dipped to $79.50 and its 150-dma before bouncing on Friday. I don't see any changes from my prior comments. I remain very cautious on this trade and suggest readers limit their position size to reduce risk.

Currently the plan is open small bearish put positions if the IWM trades at $79.40 or lower.

Entry Trigger: buy puts at $79.40

- Suggested (SMALL) Positions -

Buy Oct $78 PUT (IWM1220V78)

08/08/12 Adjust entry/stop/exit
Use a trigger @ 79.40, stop @ 80.75, target 76.50. Small Positions Only!
08/07/12 adjust trigger to buy puts up to $78.90

chart:

Entry on Unopened XX at $ XX.XX
Average Daily Volume = 60.0 million
Listed on August 5, 2012


Vornado Realty Trust - VNO - close: 79.89 change: -0.12

Stop Loss: 80.55
Target(s): 72.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: Yes, see below

Comments:
08/11/12 update: VNO continues to look weak but it has not hit our entry point yet. I don't see any changes from my prior comments.

You can tell on the weekly chart below that it almost looks like a bearish head-and-shoulders pattern. I am suggesting a trigger to open bearish positions at $78.45. Our target is $72.50 but keep in mind that the $75.00 level might be round-number support. FYI: The Point & Figure chart for VNO is bearish with a $74 target.

Trigger @ 78.45

- Suggested Positions -

buy the Sep $75 PUT (VNO1222u75)

chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 943 thousand
Listed on August 9, 2012