Editor's Note:

The big cap U.S. indices saw an afternoon rebound higher after the markets suffered some profit taking this morning.

IBM and PM were stopped out. SBAC was closed at the open as planned.

Current Portfolio:


CALL Play Updates

Amgen Inc. - AMGN - close: 83.87 change: +0.87

Stop Loss: 81.45
Target(s): 88.50
Current Option Gain/Loss: Sep85c: -18.5% & Oct85c: - 3.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/22/12 update: AMGN displayed a little relative strength today with a +0.9% gain. The stock looks ready to breakout past short-term resistance at the $84.00 level. Today's high was $84.19. Readers may want to look for a rally past $84.25 as a new entry point.

- 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: 35.17 change: -0.22

Stop Loss: 34.40
Target(s): 38.50
Current Option Gain/Loss: + 1.1%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/22/12 update: BRCM is still consolidating lower and nearing potential short-term support at $35.00 and its 150-dma. 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


Concur Technologies - CNQR - close: 72.51 change: +0.21

Stop Loss: 69.75
Target(s): 74.75
Current Option Gain/Loss: Sep75c: +12.0% & Nov75c: +5.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/22/12 update: CNQR is holding up pretty well. The stock has spent three and a half days consolidating sideways along the $72.00 level. The lack of profit taking is impressive but I am still expecting a dip toward $70.00 unless the market breaks out higher.

- Suggested Positions -

Long Sep $75 call (CNQR1222i75) Entry $1.25

- or -

Long Nov $75 call (CNQR1217j75) Entry $3.60

08/21/12 new stop loss @ 69.75
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


Dresser-Rand Group - DRC - close: 51.89 change: +0.35

Stop Loss: 49.45
Target(s): 54.75
Current Option Gain/Loss: + 4.0%
Time Frame: exit prior to Sept. option expiration
New Positions: see below

Comments:
08/22/12 update: DRC drifted higher today and managed to outperform the major indices with a +0.6% gain. I don't see any changes from my prior comments. If you're worried about the broader market then consider waiting for DRC to dip in the $50.50 area as your entry point. FYI: The Point & Figure chart for DRC is bullish with a $58 target.

- Suggested Positions -

Long Sep $50 call (DRC1222i50) Entry $2.50

Entry on August 21 at $51.14
Average Daily Volume = 489 thousand
Listed on August 20, 2012


Joy Global, Inc. - JOY - close: 57.87 change: -0.04

Stop Loss: 55.25
Target(s): 59.75
Current Option Gain/Loss: Sep $57.5c: +12.9% Oct60c: +10.4%
Time Frame: exit prior to the Aug. 29th earnings report
New Positions: see below

Comments:
08/22/12 update: Traders bought the dip in JOY this morning near its rising 10-dma. The stock managed to pare its losses to just four cents.

We do not want to hold over the Aug. 29th earnings.

- Suggested Positions -

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

- or -

Long Oct $60.00 call (JOY1220j60) Entry $2.50

08/21/12 new stop loss @ 55.25

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


Netflix, Inc. - NFLX - close: 65.40 change: -0.20

Stop Loss: 61.25
Target(s): 69.50
Current Option Gain/Loss: + 8.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/22/12 update: NFLX is hovering sideways in the $65-66 area. If you look closely the simple 30-dma seems to be acting as short-term overhead resistance. I wouldn't be surprised to see NFLX pullback a little bit here.

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

08/21/12 new stop loss @ 61.25

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


PVH Corp. - PVH - close: 87.48 change: -0.27

Stop Loss: 85.75
Target(s): 91.50
Current Option Gain/Loss: + 7.0%
Time Frame: exit prior to the Aug 27th earnings report
New Positions: see below

Comments:
08/22/12 update: Traders bought the dip in PVH near $86 and its 10-dma. The intraday rebound lifted PVH almost back to breakeven. It would be tempting to buy this bounce but we're almost out of time. PVH is due to report earnings on Monday and we do not want to hold over the announcement. Therefore I am suggesting we exit this position on Friday at the closing bell. We will raise our stop loss to $85.75.

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

08/22/12 new stop loss @ 85.75, prepare to exit on Friday (08/24) at the closing bell
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: 62.17 change: +0.09

Stop Loss: 60.95
Target(s): 64.25
Current Option Gain/Loss: +12.3%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/22/12 update: There was no follow through on yesterday's short-term bearish reversal on QCOM but the stock continues to look vulnerable here.

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


Snap On Inc. - SNA - close: 70.38 change: +0.36

Stop Loss: 69.65
Target(s): 74.90
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/22/12 update: SNA made another rally attempt this afternoon and closed up +0.5% on the day. We are waiting for shares to hit our trigger at $71.00. Our target is $74.90. More aggressive traders could aim higher.

Trigger @ $71.00

- Suggested Positions -

buy the Sep $70 call (SNA1222i70)

Entry on August xx at $ xx.xx
Average Daily Volume = 390 thousand
Listed on August 21, 2012


Under Armour, Inc. - UA - close: 56.83 change: +0.24

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:
08/22/12 update: The sideways chop in UA continues with shares inside the $56-58 zone.

Earlier Comments:
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: 58.57 change: +1.30

Stop Loss: 55.85
Target(s): 59.75
Current Option Gain/Loss: +26.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/22/12 update: Good news! After mover a week of consolidating sideways WLP is finally breaking out to the upside. Shares outperformed the market with a +2.2% gain and broke through resistance near $58.00. Our exit target is $59.75.

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: 19.43 change: +0.28

Stop Loss: 20.35
Target(s): 17.00
Time Frame: 2-4 weeks
Current Option Gain/Loss: + 0.0%
New Positions: see below

Comments:
08/22/12 update: FB didn't make much progress either way today. The trend is down but this is a volatile stock. The $20.00 area should be overhead resistance. 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

Intl. Business Machines - IBM - close: 197.25 change: -1.40

Stop Loss: 197.40
Target(s): 209.00
Current Option Gain/Loss: -64.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/22/12 update: It doesn't look good for IBM. The bullish breakout past $200 is starting to look like a bull-trap pattern. Shares retreated lower again today and hit our stop loss at $197.40. The next level of likely support is the $195 area with its simple 200-dma.

- Suggested Positions -

Sep $205 call (IBM1222i205) Entry $1.71 exit $0.60 (-64.9%)

08/22/12 stopped out at $197.40

chart:

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


Philip Morris Intl. - PM - close: 90.87 change: -0.84

Stop Loss: 91.40
Target(s): 99.00
Current Option Gain/Loss: -33.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/22/12 update: PM underperformed the market today with a -0.9% decline. After yesterday's reversal lower we were worried this would happen. Shares actually gapped open lower just underneath our stop loss at $91.39 this morning, which immediately closed this trade.

- Suggested Positions -

2013 Jan $95 call (PM1319A95) Entry $2.78 exit $1.84 (-33.8%)

08/22/12 stopped out at $91.39 (gap down)

chart:

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


SBA Communications - SBAC - close: 59.63 change: -0.11

Stop Loss: 58.95
Target(s): 64.90
Current Option Gain/Loss: Sep60c: -44.7% & Dec65c: -38.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
08/22/12 update: In last night's newsletter we decided to exit our SBAC trade early at the open this morning. Shares gapped open lower at $59.50. The long-term trend for SBAC is still higher but the stock may need to correct first.

- Suggested Positions -

Sep $60 call (SBAC1222i60) Entry $1.90 exit 0.80 (-57.8%)

- or -

Dec $65 call (SBAC1222L65) Entry $1.30 exit 0.80 (-38.4%)

08/22/12 as planned, closed at the open this morning
08/21/12 prepare to exit at the open tomorrow.
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