Editor's Note:

Monday proved to be another quiet summer day on Wall Street. Traders bought the dip this morning and equities drifted higher but not quite into positive territory.

PCYC was stopped out. PM was triggered.

Current Portfolio:


CALL Play Updates

Amgen Inc. - AMGN - close: 83.24 change: -0.14

Stop Loss: 81.45
Target(s): 88.50
Current Option Gain/Loss: Sep85c: -21.4% & Oct85c: -11.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/20/12 update: It was another quiet day for AMGN with shares churning sideways. Traders bought the dip again near the 10-dma. I don't see any changes from my prior comments. 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

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


BRCM - Broadcom - close: 35.72 change: -0.11

Stop Loss: 34.40
Target(s): 38.50
Current Option Gain/Loss: +21.1%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/20/12 update: It is a similar story here with BRCM. The stock is consolidating sideways. I don't see any changes from my prior comments. The $36.00 level does look like potential short-term resistance.

We will adjust our stop loss up to $34.40. I am not suggesting new positions at this time.

- Suggested Positions -

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

08/18/12 new stop loss @ 34.40
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: 90.44 change: +0.43

Stop Loss: 85.90
Target(s): 91.50
Current Option Gain/Loss: +31.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/20/12 update: CAT displayed some relative strength today with a +0.4% gain. The close over round-number resistance at $90.00 is bullish but I would not launch new positions here. The 100-dma could be another level of resistance and it is at $91.50.

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: 72.00 change: -0.04

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:
08/20/12 update: Hmm... CNQR closed virtually unchanged today. Yet the intraday action would suggest this might be a short-term top. I would expect a pullback toward $70.00, which should be new support.

- 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


Intl. Business Machines - IBM - close: 200.50 change: -0.72

Stop Loss: 197.40
Target(s): 209.00
Current Option Gain/Loss: -31.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/20/12 update: IBM drifted back toward the $200 level. Traders bought the dip and readers could use this pullback to $200 as a new entry point. FYI: The Point & Figure chart for IBM is bullish with a $226 target.

- Suggested Positions -

Long Sep $205 call (IBM1222i205) Entry $1.71

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


Joy Global, Inc. - JOY - close: 57.09 change: +1.19

Stop Loss: 52.75
Target(s): 59.75
Current Option Gain/Loss: Sep $57.5c: -17.4% Oct60c: - 4.4%
Time Frame: exit prior to the Aug. 29th earnings report
New Positions: see below

Comments:
08/20/12 update: JOY was showing some strength today with a +2.1% gain. The stock is quickly approaching short-term resistance at the $57.40 level. Considering our time frame I am consolidating our targets down to just one at $59.75. We do not want to hold over the Aug. 29th earnings. 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

Entry on August 17 at $56.27
Average Daily Volume = 2.1 million
Listed on August 16, 2012


Netflix, Inc. - NFLX - close: 64.24 change: +0.55

Stop Loss: 59.45
Target(s): 69.50
Current Option Gain/Loss: - 0.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/20/12 update: Traders bought the dip in NFLX near $62 this morning and the stock rallied back to tag the $65 level again. I warned readers to look for a dip toward the $62.50 area. Readers might want to consider a tighter stop loss closer to $62 now.

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

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


Philip Morris Intl. - PM - close: 93.17 change: -0.21

Stop Loss: 91.40
Target(s): 99.00
Current Option Gain/Loss: -10.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/20/12 update: PM rallied just enough to hit our trigger to buy calls at $93.60. At this point I would wait for a new high above $93.60 to launch positions. More nimble traders could try and buy calls on a dip or a bounce near the $92 area instead. FYI: The Point & Figure chart for PM is bullish with a $106 target.

- Suggested Positions -

Long 2013 Jan $95 call (PM1319A95) Entry $2.78

Entry on August 20 at $93.60
Average Daily Volume = 4.2 million
Listed on August 18, 2012


PVH Corp. - PVH - close: 87.19 change: -1.82

Stop Loss: 84.75
Target(s): 91.50
Current Option Gain/Loss: +00.0%
Time Frame: exit prior to the Aug 27th earnings report
New Positions: see below

Comments:
08/20/12 update: Ouch! PVH completely erased Friday's gains with a -2.0% drop today. Our option is back to where we started. It looks like PVH is headed for $86 and the 10-dma. 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)

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


Qualcomm - QCOM - close: 62.80 change: -0.49

Stop Loss: 60.95
Target(s): 64.25
Current Option Gain/Loss: +27.6%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/20/12 update: QCOM hit a little bit of profit taking today (-0.7%). I would look for short-term support near $62.00. If not, then QCOM will hit our stop loss near $61.00.

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

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


SBA Communications - SBAC - close: 60.56 change: +0.05

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:
08/20/12 update: SBAC is showing a little bit of volatility. The stock traded down to a new two-week low at $59.10. Yet it bounced all the way back to close in positive territory. The rebound is encouraging but I am not suggesting new positions.

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


Under Armour, Inc. - UA - close: 56.75 change: -0.98

Stop Loss: 55.70
Target(s): 64.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
08/20/12 update: There was no follow through on Friday's rally. UA gave back -1.7% today. The stock remains inside its $56-58 trading range.

I suspect UA could see another short squeeze. The most recent data listed short interest at 24% of the 78 million share float. The August high was $58.48. I am suggesting a trigger to buy calls at $58.55. We'll use a stop loss at $55.70. Our target is $64.00. FYI: The Point & Figure chart for UA is bullish with a long-term $85 target.

Trigger @ 58.55

- Suggested Positions -

Buy the Oct $60 call (UA1220J60)

Entry on August xx at $ xx.xx
Average Daily Volume = 2.1 million
Listed on August 18, 2012


WellPoint Inc. - WLP - close: 57.38 change: +0.12

Stop Loss: 55.85
Target(s): 59.75
Current Option Gain/Loss: - 8.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/20/12 update: News that Aetna (AET) was buying Coventry Health Care for $5.7 billion caused a stir in the healthcare sector this morning. Yet shares of WLP remain inside its $56-58 trading range.

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

FB - Facebook - close: 20.01 change: +0.96

Stop Loss: 20.35
Target(s): 17.00
Time Frame: 2-4 weeks
Current Option Gain/Loss: -13.7%
New Positions: see below

Comments:
08/20/12 update: It looks like we were celebrating a little early on FB. The stock was actually upgraded this morning to a "buy". This probably sparked some short covering. FB surged back to prior support and what should be resistance at $20.00. We just lower our stop loss to $20.35 this past weekend. I am not suggesting new positions.

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

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


CLOSED BULLISH PLAYS

Pharmacyclics - PCYC - close: 61.06 change: -1.83

Stop Loss: 59.45
Target(s): 67.00
Current Option Gain/Loss: -33.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/20/12 update: PCYC had a lot of potential with its bullish breakout past resistance at $60.00. Unfortunately with the market up several weeks in a row and the major indices near resistance, traders are nervous right now. PCYC was downgraded this morning and the stock spiked down to hit $59.45 intraday. That just happens to be our stop loss.

- Suggested Positions -

Long Sep $65 call (PCYC1222i65) Entry $2.70 exit $1.80 (-33.3%)

08/20/12 stopped out at $59.45
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