Editor's Note:

The S&P 500 and the NASDAQ composite are hitting new three-month highs. We have decided it's a good time to update a few stop losses below.

Plus, we've removed COH and ORLY, neither trade was open. IWM has been stopped out. PCYC was triggered.

Current Portfolio:


CALL Play Updates

Amgen Inc. - AMGN - close: 83.10 change: -0.55

Stop Loss: 81.45
Target(s): 88.50
Current Option Gain/Loss: Sep85c: -20.0% & Oct85c: -12.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/16/12 update: Hmm... what happened to AMGN today. Shares failed to participate in the almost market-wide rally. The larger trend remains bullish.

Earlier Comments:
If you're still looking for an entry point consider that more conservative traders could wait for a new high over $84.40 while nimble traders could try and buy a dip near $82.50 instead.

- Suggested Positions -

Long Sep $85 call (AMGN1222i85) Entry $1.35

- or -

Long Oct $85 call (AMGN1220j85) Entry $2.15

08/15/12 triggered at $83.75

Entry on August 15 at $83.75
Average Daily Volume = 4.8 million
Listed on August 14, 2012


BRCM - Broadcom - close: 36.02 change: +1.31

Stop Loss: 33.25
Target(s): 38.50
Current Option Gain/Loss: +31.1%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/16/12 update: BRCM displayed relative strength with a +3.7% gain and a new three-month high. Midday the company announced they were paying a quarterly cash dividend of 10 cents. This new dividend is payable on September 17th to shareholders of record on August 31st.

Readers may want to cinch up their stop loss closer to the $34 level. 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

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


Caterpillar - CAT - close: 88.59 change: +0.98

Stop Loss: 85.90
Target(s): 91.50
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/16/12 update: CAT continues to rebound after yesterday's DE-inspired drop. The next challenge for the bulls is resistance near the $90.00 level. 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

08/13/12 new stop loss @ 85.90
08/07/12 triggered @ $87.25

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


Concur Technologies - CNQR - close: 71.38 change: +1.05

Stop Loss: 68.75
Target(s): 74.75
Current Option Gain/Loss: Sep75c: +16.0% & Nov75c: +2.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/16/12 update: The rally continues for CNQR. This is a new record high. We are raising our stop loss up to $68.75.

- Suggested Positions -

Long Sep $75 call (CNQR1222i75) Entry $1.25

- or -

Long Nov $75 call (CNQR1217j75) Entry $3.60

08/16/12 new stop loss @ 68.75
08/15/12 triggered at $70.25

Entry on August 15 at $70.25
Average Daily Volume = 577 thousand
Listed on August 13, 2012


Netflix, Inc. - NFLX - close: 64.31 change: +1.05

Stop Loss: 59.45
Target(s): 69.50
Current Option Gain/Loss: + 1.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/16/12 update: NFLX spent the morning consolidating sideways before finally starting to climb again around lunchtime. The stock opened a $63.46. I don't see any changes from my prior comments.

Earlier Comments:
I do consider this an aggressive trade. NFLX can be volatile. Nimble traders may want to wait and buy calls on a dip in the $62-61 area.

- Suggested (SMALL) Positions -

Long Sep $67.50 call (NFLX1222i67.5) Entry $2.23

Entry on August xx at $ xx.xx
Average Daily Volume = 5.8 million
Listed on August 15, 2012


Pharmacyclics - PCYC - close: 61.61 change: +0.95

Stop Loss: 57.75
Target(s): 67.00
Current Option Gain/Loss: +1.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/16/12 update: We had a trigger to buy calls at $60.85 but PCYC actually opened at $60.94, immediately triggering this trade. If you waited a little bit PCYC provided another dip near $60.50 before moving higher.

The next level of overhead resistance looks like $70 (from years ago). We will aim for $67.00 but more aggressive traders could aim higher.

- Suggested Positions -

Long Sep $65 call (PCYC1222i65) Entry $2.70

08/16/12 triggered on gap open higher @ 60.94

Entry on August 16 at $60.94
Average Daily Volume = 879 thousand
Listed on August 15, 2012


PVH Corp. - PVH - close: 87.56 change: +0.78

Stop Loss: 84.75
Target(s): 91.50
Current Option Gain/Loss: +16.2%
Time Frame: exit prior to the Aug 27th earnings report
New Positions: see below

Comments:
08/16/12 update: Traders bought the dip near $86.00 this morning. PVH managed to briefly trade over $88 before trimming its gains. We are adjusting our stop loss higher to $84.75.

Earlier Comments:
The $90.00 level could be resistance but we will aim for the 2012 highs near $92.00. FYI: The Point & Figure chart for PVH is bullish with a $97 target.

- Suggested Positions -

Long Sep $87.50 call (PVH1222i87.5) Entry $3.27

08/16/12 new stop loss @ 84.75
08/14/12 triggered on gap open at $85.62 (trigger was 85.25)

Entry on August 14 at $85.62
Average Daily Volume = 845 thousand
Listed on August 13, 2012


Qualcomm - QCOM - close: 62.57 change: +0.05

Stop Loss: 60.95
Target(s): 64.50
Current Option Gain/Loss: +33.5%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/16/12 update: Hmm... QCOM really did not participate in the market's widespread rally today. Is the good news already priced in? Are shares just tired and need a break? The trend is still up but QCOM might need to correct a little bit. We are raising our stop loss to $60.95. More aggressive traders will want to keep their stop loss underneath the $60.00 level instead.

I am not suggesting new positions at this time.

- Suggested Positions -

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

08/16/12 new stop loss @ 60.95
08/07/12 triggered @ 60.51

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


SBA Communications - SBAC - close: 60.53 change: -0.91

Stop Loss: 58.95
Target(s): 64.90
Current Option Gain/Loss: Sep60c: -15.7% & Dec65c: -11.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
08/16/12 update: SBAC was downgraded from a "buy" to a "neutral" this morning. The stock reacted by spiking down to $59.39 but managed to recover pretty quickly. Unfortunately the September calls did not recover that much and are still down sharply on the session. The stock closed with a -1.48% decline. We are raising our stop loss up to $58.95. I am not suggesting new positions at this time.

Our multi-week target is $64.90. We might need some patience on this one. SBAC doesn't move super fast. FYI: The Point & Figure chart for SBAC is bullish with a long-term $100 target.

- Suggested Positions -

Long Sep $60 call (SBAC1222i60) Entry $1.90

- or -

Long Dec $65 call (SBAC1222L65) Entry $1.30

08/16/12 new stop loss @ 58.95
08/14/12 triggered @ 60.75

Entry on August 14 at $60.75
Average Daily Volume = 1.5 million
Listed on August 11, 2012


WellPoint Inc. - WLP - close: 57.84 change: +0.04

Stop Loss: 55.85
Target(s): 59.75
Current Option Gain/Loss: +21.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/16/12 update: The stock market's broad-based rally today was not enough to push WLP past resistance at the $58.00 level. We are raising our stop loss to $55.85.

I am not suggesting new positions at this time.

- Suggested Positions -

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

08/16/12 new stop loss @ 55.85
08/08/12 triggered @ 56.50

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


PUT Play Updates

Edwards Lifesciences - EW - close: 97.80 change: -0.38

Stop Loss: 100.25
Target(s): 91.50
Current Option Gain/Loss: -24.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/16/12 update: EW is still underperforming the market. Shares lost -0.38% today and remain under resistance near $100. Given the market's recent strength I am not suggesting new positions at this time.

- Suggested Positions -

Long Sep $95 PUT (EW1222u95) Entry $2.70

08/13/12 trade opened on gap down at $97.66 (trigger was 97.75)

Entry on August 13 at $97.66
Average Daily Volume = 950 thousand
Listed on August 9, 2012


FB - Facebook - close: 19.87 change: -1.33

Stop Loss: 23.25
Target(s): 17.00
Time Frame: 2-4 weeks
Current Option Gain/Loss: + 3.4%
New Positions: see below

Comments:
08/16/12 update: As expected shares of FB dropped following the expiration of its latest stock lock up period. The close under round-number support at $20.00 is bearish.

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

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


CLOSED BEARISH PLAYS

Coach, Inc. - COH - close: 56.83 change: +1.18

Stop Loss: 56.05
Target(s): 50.15
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/16/12 update: With the market in rally mode suddenly COH is showing more strength. The stock outperformed today with a +2.1% gain. We are dropping COH as a candidate. Our trade did not open.

Our trade did not open

08/16/12 removed COH from the newsletter. trade did not open.

chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 6.8 million
Listed on August 14, 2012


iShares Russell 2000 ETF - IWM - close: 81.14 change: +0.84

Stop Loss: 80.75
Target(s): 76.50
Time Frame: 3-5 weeks
Current Option Gain/Loss: -23.0%
New Positions: see below

Comments:
08/16/12 update: As I feared yesterday, the IWM has continued to rebound. Now this small cap ETF looks like it's breaking out. Our stop was hit at $80.75.

Our plan was to keep our position size small to limit our risk.

- Suggested (SMALL) Positions -

Oct $78 PUT (IWM1220V78) Entry $2.60 exit $2.00 (-23.0%)

08/16/12 stopped out at $80.75
08/13/12 triggered @ 79.40
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 August 13 at $79.40
Average Daily Volume = 60.0 million
Listed on August 5, 2012


O'Reilly Automotive - ORLY - close: 87.21 change: +2.26

Stop Loss: 84.75
Target(s): 80.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/16/12 update: The market's strength has shorts on the run and ORLY surged +2.6%. Shares have broken one of its bearish trends of lower highs. We are dropping ORLY as a candidate. Our trade never opened.

Our trade did not open.

08/16/12 removed from the newsletter. trade did not open.

chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 1.5 million
Listed on August 11, 2012