Editor's Note:

The IPO disaster of the year is FB's plunge from $38 to $19 in just three months. Of course that's good news for our recent FB put trade.

Our EW trade was stopped out.

Current Portfolio:


CALL Play Updates

Amgen Inc. - AMGN - close: 83.38 change: +0.28

Stop Loss: 81.45
Target(s): 88.50
Current Option Gain/Loss: Sep85c: -19.2% & Oct85c: - 9.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/18/12 update: Traders bought the dip in AMGN again on Friday. Shares slipped under their 10-dma briefly before rebounding. More conservative traders may want to wait for a close over $84.00 before initiating positions.

- 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

chart:

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


BRCM - Broadcom - close: 35.83 change: -0.19

Stop Loss: 33.25
Target(s): 38.50
Current Option Gain/Loss: +22.2%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/18/12 update: After big gains on Thursday BRCM consolidate a little bit on Friday. Shares lost -0.5%. The $36.00 level does look like potential short-term resistance.

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

chart:

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


Caterpillar - CAT - close: 90.01 change: +1.42

Stop Loss: 85.90
Target(s): 91.50
Current Option Gain/Loss: +24.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/18/12 update: Shares of CAT displayed relative strength with a pop higher and a close right at round-number resistance at the $90.00 mark. Shares got a boost from news that 800 workers at one of its Illinois plants had ratified a six-year labor deal and ended a four-month strike.

CAT has yet to break this resistance level at $90.00. 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

chart:

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


Concur Technologies - CNQR - close: 72.04 change: +0.66

Stop Loss: 68.75
Target(s): 74.75
Current Option Gain/Loss: Sep75c: +24.0% & Nov75c: +8.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/18/12 update: CNQR continues to rally and hit new all-time highs. The stock is up three days in a row and up significantly from its early August lows near $62. That's a $10 move (+16%) in just over two weeks. Odds are growing that CNQR will see a pullback. We can look for broken resistance at $70.00 to offer some new support.

I am not suggesting new positions at this time.

- 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

chart:

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


Intl. Business Machines - IBM - close: 201.22 change: +0.38

Stop Loss: 197.40
Target(s): 209.00
Current Option Gain/Loss: - 7.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/18/12 update: Friday was a relatively quiet day for IBM. Shares did hit new three-month highs before paring their gains. Now that shares are above resistance at $200 there is a good chance the stock will rally to catch up with some of its peers in the technology space.

I would still consider new positions now or you can wait for a dip near the $200 level, which should offer some short-term support. FYI: The Point & Figure chart for IBM is bullish with a $226 target.

- Suggested Positions -

Long Sep $205 call (IBM1222i205) Entry $1.71

chart:

Entry on August 17 at $201.08
Average Daily Volume = 3.4 million
Listed on August 16, 2012


Joy Global, Inc. - JOY - close: 55.90 change: -0.08

Stop Loss: 52.75
Target(s): 59.75 & 62.40
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the Aug. 29th earnings report
New Positions: Yes, see below

Comments:
08/18/12 update: Shares of JOY failed to see much follow through on Friday but then Friday was a pretty lazy day for the stock market. I would still consider new bullish positions now or nimble traders could try and buy calls on a dip near $55.00 instead.

Our first target is $59.75. I am setting a secondary, more aggressive target at $62.40 but JOY will have to get past potential resistance at $60.00. FYI: The Point & Figure chart for JOY is bullish with a longer-term $74 target.

- Suggested Positions -

Long Sep $57.50 call (JOY1222i57.5) Entry $2.70

- or -

Long Oct $60.00 call (JOY1220j60) Entry $2.50

chart:

Entry on August 17 at $59.27
Average Daily Volume = 2.1 million
Listed on August 16, 2012


Netflix, Inc. - NFLX - close: 63.69 change: -0.62

Stop Loss: 59.45
Target(s): 69.50
Current Option Gain/Loss: - 9.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/18/12 update: Hmm... I would be a little careful here. The two-week trend in NFLX is up but Friday's performance actually looks like a short-term top. I would expect a dip back into the $62.50 region. We can look for a pullback or wait to buy the bounce before initiating new positions.

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.

- Suggested (SMALL) Positions -

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

chart:

Entry on August 16 at $63.46
Average Daily Volume = 5.8 million
Listed on August 15, 2012


Pharmacyclics - PCYC - close: 61.61 change: +0.95

Stop Loss: 59.45
Target(s): 67.00
Current Option Gain/Loss: +14.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/18/12 update: PCYC continues to show strength and rallied to another multi-year high on Friday. Broken resistance near $60.00 should offer some support so we are raising our stop loss up to $59.45.

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

08/18/12 new stop loss @ 59.45
08/16/12 triggered on gap open higher @ 60.94

chart:

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


PVH Corp. - PVH - close: 89.01 change: +1.45

Stop Loss: 84.75
Target(s): 91.50
Current Option Gain/Loss: +34.5%
Time Frame: exit prior to the Aug 27th earnings report
New Positions: see below

Comments:
08/18/12 update: PVH continues to outperform the major indices. The stock added another +1.6% on Friday. More conservative traders may want to consider taking profits now or before PVH reaches what might be resistance at $90.00. I see resistance in the $92.50-93.00 area as the level to watch so we're aiming for $91.50 as our exit target. I am not suggesting new positions at this time.

Earlier Comments:
The $90.00 level could be resistance but we will aim for the 2012 highs near $93.00. 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

08/18/12 more conservative traders may want to take profits early
08/16/12 new stop loss @ 84.75
08/14/12 triggered on gap open at $85.62 (trigger was 85.25)

chart:

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


Qualcomm - QCOM - close: 63.29 change: +0.72

Stop Loss: 60.95
Target(s): 64.25
Current Option Gain/Loss: +50.0%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/18/12 update: The QCOM rally continues with the stock up five weeks in a row. The widely expected yet unannounced launch of Apple's iPhone 5 is driving component makers like QCOM higher. Please note that I am adjusting our exit target down to $64.25. More conservative traders may want to exit now to lock in gains since QCOM is technically overbought and due for some profit taking.

I am not suggesting new positions at this time.

- Suggested Positions -

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

08/18/12 adjust exit target to $64.25
08/16/12 new stop loss @ 60.95
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


SBA Communications - SBAC - close: 60.51 change: -0.02

Stop Loss: 58.95
Target(s): 64.90
Current Option Gain/Loss: Sep60c: -18.4% & Dec65c: -19.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
08/18/12 update: It was a very quiet Friday for the stock market and SBAC churned sideways to close virtually unchanged on the session. While the larger trend is up 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

chart:

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


WellPoint Inc. - WLP - close: 57.26 change: -0.58

Stop Loss: 55.85
Target(s): 59.75
Current Option Gain/Loss: - 3.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/18/12 update: It was a disappointing Friday for WLP. The stock retreated from new short-term resistance near $58.00 thanks to an analyst downgrade on Friday morning. Fortunately, traders bought the dip at the rising 10-dma.

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

chart:

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


PUT Play Updates

FB - Facebook - close: 19.05 change: -0.82

Stop Loss: 20.35
Target(s): 17.00
Time Frame: 2-4 weeks
Current Option Gain/Loss: +31.0%
New Positions: see below

Comments:
08/18/12 update: To quote Hannibal from the A-Team, "I love it when a plan comes together."

As expected shares of FB have continued to sink under a new wave of selling pressure thanks to the lock up expiration of 270 million new shares available for sale. The breakdown under round-number support at $20.00 is bearish. The stock is now down -50% from its IPO price of $38.00 a share.

Readers may want to go ahead and lock in profits now but we are aiming for the $17.00 level. We will try and reduce our risk by lowering the stop loss down to $20.35.

I am not suggesting new positions at this time.

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

08/18/12 new stop loss @ 20.35, readers may want to take profits now
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


CLOSED BEARISH PLAYS

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

Stop Loss: 100.25
Target(s): 91.50
Current Option Gain/Loss: -53.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/18/12 update: After underperforming the market all week long EW suddenly erupted higher on Friday. I couldn't find any specific news to account for the relative strength (+2.6% on Friday). Shares broke through potential resistance at $100 and its 50-dma and hit our stop loss at $100.25.

- Suggested Positions -

Sep $95 PUT (EW1222u95) Entry $2.70 exit $1.25 (-53.7%)

08/17/12 stopped out at $100.25.
08/13/12 trade opened on gap down at $97.66 (trigger was 97.75)

chart:

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