Editor's Note:

The theme of the week is going to be "wait and see" as market participants wait for Fed Chairman Bernanke's speech on Friday. This is producing a sideways low-volume market. Jim has warned readers in his wrap that Bernanke could easily disappoint the market and spark a sell-off. On the other hand there is the unlikely chance he says something significant about further stimulus that sparks another round of short covering and launches stocks higher.

Cautious traders will want to consider exiting their bullish positions prior to his speech since odds favor that Bernanke will not offer anything concrete. He needs to save his last "bullet" in case the economy does get worse. Instead of exiting positions we are taking the approach of trying to reduce our risk by raising our stop losses.

I've adjusted multiple stop losses today.

Current Portfolio:


CALL Play Updates

Amgen Inc. - AMGN - close: 84.01 change: -0.42

Stop Loss: 81.95
Target(s): 88.50
Current Option Gain/Loss: Sep85c: -29.6% & Oct85c: - 8.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/28/12 update: With the market going sideways AMGN drifted sideways near the $84 level of support/resistance. More conservative traders might want to tighten their stops toward the 20-dma near $82.90. I am not suggesting new positions at this time.

- Suggested Positions -

Long Sep $85 call (AMGN1222i85) Entry $1.35

- or -

Long Oct $85 call (AMGN1220j85) Entry $2.15

08/27/12 new stop loss @ 81.95
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: 35.39 change: -0.03

Stop Loss: 34.40
Target(s): 38.50
Current Option Gain/Loss: + 6.1%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/28/12 update: BRCM is still churning sideways with short-term support at $35.00. We have a stop at $34.40. Cautious traders may want to tighten their stop even more.

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


Celgene Corp. - CELG - close: 72.02 change: +0.33

Stop Loss: 70.45
Target(s): 77.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
08/28/12 update: There is nothing new to report here. CELG is moving sideways near the $72.00 level.

Friday's high was $72.53. I am suggesting a trigger to buy calls at $72.75 with a stop loss at $70.45. Our target is $77.50. FYI: The Point & Figure chart for CELG is bullish with a $81 target.

Trigger @ 72.75

- Suggested Positions -

buy the Sep $75 call (CELG1221i75)

- or -

buy the Oct $75 call (CELG1220j75)

Entry on August xx at $ xx.xx
Average Daily Volume = 2.9 million
Listed on August 25, 2012


Concur Technologies - CNQR - close: 72.38 change: -0.29

Stop Loss: 69.75
Target(s): 74.75
Current Option Gain/Loss: Sep75c: + 4.0% & Nov75c: +11.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/28/12 update: CNQR is still bouncing along the $72.00 level. We have a stop loss at $69.75 because shares could dip toward prior resistance and what should be support at $70.00. Cautious traders may want to consider a stop loss closer to $71.40 instead.

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

08/21/12 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: 51.24 change: -0.15

Stop Loss: 49.75
Target(s): 54.75
Current Option Gain/Loss: -18.0%
Time Frame: exit prior to Sept. option expiration
New Positions: see below

Comments:
08/28/12 update: DRC briefly traded below short-term technical support at its 10-dma before bouncing back today. I am inching our stop loss higher to $49.75. If DRC breaks down under support at $50.00 we want to get out.

FYI: The Point & Figure chart for DRC is bullish with a $58 target.

- Suggested Positions -

Long Sep $50 call (DRC1222i50) Entry $2.50

08/28/12 new stop loss @ 49.75

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


Express Scripts - ESRX - close: 61.92 change: +0.02

Stop Loss: 59.75
Target(s): 67.50
Current Option Gain/Loss: Sep62.5c: + 8.4% & Oct$62.5c: + 8.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/28/12 update: Traders bought the dip this morning and ESRX closed virtually unchanged on the session. We are expecting the $60 level to act as support so we're keeping our stop loss at $59.75 for now.

FYI: The Point & Figure chart for ESRX is bullish with a $76 target.

- Suggested Positions -

Long Sep $62.50 call (ESRX1222i62.5) Entry $0.95

- or -

Long Oct $62.50 call (ESRX1220j62.5) Entry $1.67

Entry on August xx at $ xx.xx
Average Daily Volume = 5.1 million
Listed on August 23, 2012


Netflix, Inc. - NFLX - close: 62.95 change: +0.56

Stop Loss: 61.80
Target(s): 69.50
Current Option Gain/Loss: -43.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/28/12 update: NFLX bounced off short-term support near $62.00 again and posted a +0.8% gain. Yet the daily chart is still showing short-term technical resistance at the 10-dma and 30-dma directly overhead. I am not suggesting new positions. Technically NFLX looks troubled here with last Thursday's bearish reversal. Readers may want to exit early now. I am raising our stop loss to $61.80 so it's just under last Friday's low.

I am not suggesting new positions.

Earlier Comments:
I do consider this an aggressive trade. NFLX can be volatile.

- Suggested (SMALL) Positions -

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

08/28/12 new stop loss @ 61.80
08/25/12 NFLX not working for us. Readers may want to exit early
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


Qualcomm - QCOM - close: 62.01 change: -0.36

Stop Loss: 61.40
Target(s): 64.25
Current Option Gain/Loss: + 0.0%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/28/12 update: QCOM has spent five days now churning sideways in a narrow range. We've been cautious on it since the pullback on Aug. 21st. Bigger picture I think there is a chance QCOM dips toward prior resistance at $60.00 again but that's not guaranteed. We will try and reduce our risk by raising the stop loss to $61.40.

I am not suggesting new positions at this time.

- Suggested Positions -

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

08/28/12 new stop loss @ 61.40
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: 69.46 change: -0.11

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:
08/28/12 update: SNA is still churning sideways in the $69-71 range. If shares close under $69.00 we'll likely drop it as a bullish candidate.

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


United Technologies - UTX - close: 80.64 change: +0.08

Stop Loss: 78.85
Target(s): 84.00
Current Option Gain/Loss: Sep80c: +19.0% & Oct82.50c: +12.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/28/12 update: Traders bought the dip near $80.00 this morning but UTX has yet to push past short-term resistance near $81.00.

- Suggested Positions -

Long Sep $80 call (UTX1222i80) Entry $1.52

- or -

Long Oct $82.50 call (UTX1220j82.5) Entry $1.33

08/27/12 triggered @ 80.30

Entry on August 27 at $80.30
Average Daily Volume = 3.7 million
Listed on August 25, 2012


Whole Foods Market, Inc. - WFM - close: 96.79 change: -0.03

Stop Loss: 94.75
Target(s): 104.50
Current Option Gain/Loss: Sep$100c: -44.8% & Oct$100c: -22.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/28/12 update: This sideways market has led to a sideways move in WFM. The stock has short-term support at $95.00 and at $96.00. Currently our stop is at $94.75. More conservative traders may want to tighten their stop further.

At this point I would wait for a rally past $98.25 before launching new positions.

Earlier Comments:
Keep position size small to limit risk.

- Suggested *SMALL* Positions -

Long Sep $100 call (WFM1222i100) Entry $1.45

- or -

Long Oct $100 call (WFM1220j100) Entry $2.50

Entry on August 23 at $98.00
Average Daily Volume = 1.7 million
Listed on August 22, 2012


Westlake Chemical - WLK - close: 68.81 change: +0.05

Stop Loss: 68.40
Target(s): 74.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/28/12 update: It was a quiet day for WLK. The stock remains under resistance at the $70.00 level.

I am suggesting we use a trigger to buy calls at $70.25. Our initial target is $74.75.

Trigger @ 70.25

- Suggested Positions -

buy the Sep $70 call (WLK1222i70)

Entry on August xx at $ xx.xx
Average Daily Volume = 507 thousand
Listed on August 22, 2012


WellPoint Inc. - WLP - close: 57.39 change: -0.77

Stop Loss: 55.85
Target(s): 59.75
Current Option Gain/Loss: -28.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/28/12 update: WLP's recent performance is not very inspiring. We can probably blame it on the market's sideways move right now. However, WLP did produce a new short-term lower high. More conservative traders may want to consider an early exit right now or maybe raise their stop loss toward $56.40.

I am not suggesting new positions at this time.

- Suggested Positions -

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

08/28/12 WLP's performance is troubling. Readers may want to exit early or raise their stop loss.
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

Cummins Inc. - CMI - close: 96.94 change: -1.64

Stop Loss: 100.55
Target(s): 92.50
Current Option Gain/Loss: +23.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/28/12 update: Our new trade on CMI is off to a good start. Shares did gap down at $98.28 and fell to a -1.6% decline. I am lowering our stop loss to $100.55.

Earlier Comments:
There is potential support at $95.00 and the 50-dma but we are aiming for $92.50.

- Suggested Positions -

Long Sep $95 PUT (CMI1222u95) Entry $1.70

08/28/12 new stop loss @ 100.55
08/28/12 trade opens with CMI gapping down at $98.28

Entry on August 28 at $98.28
Average Daily Volume = 2.3 million
Listed on August 27, 2012


FB - Facebook - close: 19.15 change: -0.26

Stop Loss: 20.35
Target(s): 17.00
Time Frame: 2-4 weeks
Current Option Gain/Loss: -10.3%
New Positions: see below

Comments:
08/28/12 update: Hmm... today marks the third bounce in the last seven trading days near the $19.00 level. Has FB found support? The stock is still trading with a bearish pattern of lower highs. This bearish wedge-shaped pattern should be forecasting another breakdown but nothing is guaranteed.

I am not suggesting new positions at this time and current traders may want to lower their stop loss. If FB continues to churn sideways the time decay on our option is going to hurt us.

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


Weight Watchers Intl. - WTW - close: 47.58 change: -0.26

Stop Loss: 50.10
Target(s): 42.50
Current Option Gain/Loss: Sep47.5p: - 5.4% & Oct45p: - 5.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/28/12 update: WTW continues to look weak but the stock did find some short-term support near $47.50 today. We are adjusting our stpo loss down to $50.10.

- Suggested Positions -

Long Sep $47.50 PUT (WTW1222u47.5) Entry $1.85

- or -

Long Oct $45.00 PUT (WTW1220V45) Entry $1.85

08/28/12 new stop loss @ 50.10

Entry on August 24 at $48.21
Average Daily Volume = 929 thousand
Listed on August 23, 2012