Editor's Note:

Renewed concerns over Europe helped spark some selling across the market this morning. We saw several of our bullish candidates get stopped out (DRC, FFIV, MDVN, NFLX, QCOM, and UTX).

We have been warning readers that tomorrow (Friday) could be volatile depending on what Ben Bernanke does or does not say in his speech in Jackson Hole. Stocks could be up big or down big tomorrow. Cautious traders may want to pull their short-term money out of the market.

Current Portfolio:


CALL Play Updates

Amgen Inc. - AMGN - close: 83.15 change: -0.57

Stop Loss: 81.95
Target(s): 88.50
Current Option Gain/Loss: Sep85c: -51.1% & Oct85c: -25.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/30/12 update: The stock market's plunge this morning produced a gap down in AMGN. Shares opened under $83.40 and dipped toward $82.50 before bouncing. Technically today's drop violates short-term support at the 10-dma. We are leaving our stop loss at $81.95 for now but readers may want to raise their stops instead. 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: 34.99 change: -0.67

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

Comments:
08/30/12 update: The market's spike down pushed BRCM toward short-term support near $35.00 again. Shares are hovering near their 150-dma as well. If there is any follow through tomorrow then BRCM will likely hit our stop loss at $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


Celgene Corp. - CELG - close: 70.83 change: -0.80

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:
08/30/12 update: Today's decline in CELG has knocked it out of the short-term $71-72 trading range. Normally I would look for $70.00 and the 200-dma (near $70) to offer some support but if the market continues to drop on Friday I suspect CELG will break this level.

Currently we are still on the sidelines waiting for a breakout higher. I am suggesting a trigger to buy calls at $72.75 with a stop loss at $70.45.

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: 72.20 change: -0.13

Stop Loss: 69.75
Target(s): 74.75
Current Option Gain/Loss: Sep75c: - 8.0% & Nov75c: +11.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/30/12 update: CNQR is holding up pretty well. The stock only posted a minor decline and is holding short-term support near $72.00. You already know I'm expecting a dip toward likely support at $70.00, especially if the market declines on Friday.

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


Express Scripts - ESRX - close: 61.73 change: -0.10

Stop Loss: 59.75
Target(s): 67.50
Current Option Gain/Loss: Sep62.5c: - 1.0% & Oct$62.5c: + 4.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/30/12 update: ESRX held up reasonably well today. Traders bought the dip this morning and the stock trimmed its losses to just 10 cents. If the market does continue lower tomorrow I am expecting ESRX to decline toward what should be support near $60.00.

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


Medivation, Inc. - MDVN - close: 97.42 change: -0.60

Stop Loss: 94.75
Target(s): 104.50
Current Option Gain/Loss: -22.5%
Time Frame: exit prior to Sept. 24th and the 2-for-1 split
New Positions: see below

Comments:
08/30/12 update: MDVN rallied just enough to hit our trigger at $98.50 and then reversed. Nimble traders could try and buy dips at the rising 50-dma (currently 95.16) but I would wait and look for a new rise past today's high instead at $98.62.

Earlier Comments:
I am listing the October puts because they have smaller spreads than the Septembers but we will exit prior to the stock split on Sept. 24th.

- Suggested Positions -

Long Oct $105 call (MDVN1220j105) Entry $4.00*

08/30/12 triggered @ 98.50
*entry price is an estimate. The option did not trade at the time our play opened.

Entry on August 30 at $98.50
Average Daily Volume = 360 thousand
Listed on August 29, 2012


Snap On Inc. - SNA - close: 69.39 change: -0.15

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:
08/30/12 update: SNA tagged a new two-week low before paring its losses. There is no change from my prior comments.

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


Whole Foods Market, Inc. - WFM - close: 97.04 change: +0.04

Stop Loss: 94.75
Target(s): 104.50
Current Option Gain/Loss: Sep$100c: -29.5% & Oct$100c: -13.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/30/12 update: WFM managed to ignore most of the market's weakness today. Shares produced a minor bounce off their rising 10-dma.

Currently our stop is at $94.75. More conservative traders may want to tighten their stop further.

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: 68.36 change: -0.90

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:
08/30/12 update: WLK is still churning inside the $68-70 zone.

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


PUT Play Updates

CH Robinson Worldwide - CHRW - close: 56.24 change: -0.76

Stop Loss: 58.05
Target(s): 51.25
Current Option Gain/Loss: - 2.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/30/12 update: There was no follow through on yesterday's bounce. CHRW gapped down at the open and faded lower the rest of the day.

- Suggested *Small* Positions -

Long Oct $55 PUT (CHRW1220v55) entry $1.38

Entry on August 29 at $56.29
Average Daily Volume = 1.1 million
Listed on August 28, 2012


Cummins Inc. - CMI - close: 95.74 change: -1.96

Stop Loss: 100.55
Target(s): 92.50
Current Option Gain/Loss: +50.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/30/12 update: CMI is sinking to a new four-week low with today's -2% decline.

I want to caution you that the $95 .00 level and the simple 50-dma (also near $95) could offer some short-term support. Don't be surprised to see a bounce off this level.

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


Dril-Quip - DRQ - close: 67.95 change: -1.01

Stop Loss: 70.75
Target(s): 64.00
Current Option Gain/Loss: - 6.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/30/12 update: DRQ gapped open lower at $68.40 and then fell to $67.13, essentially hitting its simple 200-dma, before bouncing. Readers may want to wait for DRQ to fill the gap with a bounce back toward $69.00 as your entry point.

The plan was to limit our risk by keeping our position size small.

- Suggested *Small* Positions -

Long Sep $70 PUT (DRQ1222u70) entry $3.30

Entry on August 30 at $68.40
Average Daily Volume = 425 thousand
Listed on August 29, 2012


FB - Facebook - close: 19.09 change: -0.01

Stop Loss: 20.35
Target(s): 17.00
Time Frame: 2-4 weeks
Current Option Gain/Loss: - 6.8%
New Positions: see below

Comments:
08/30/12 update: FB is hovering between short-term support at $19.00 and its bearish trend of lower highs. This pattern "should" produce a bearish breakdown but nothing is guaranteed.

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 (FB1222U20) 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: 47.55 change: -0.32

Stop Loss: 50.10
Target(s): 42.50
Current Option Gain/Loss: Sep47.5p: - 8.1% & Oct45p: - 8.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/30/12 update: WTW continues to drift lower. I don't see any changes from my prior comments and would still consider new bearish positions at current levels.

- 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


CLOSED BULLISH PLAYS

Dresser-Rand Group - DRC - close: 49.26 change: -1.34

Stop Loss: 49.75
Target(s): 54.75
Current Option Gain/Loss: -46.0%
Time Frame: exit prior to Sept. option expiration
New Positions: see below

Comments:
08/30/12 update: The market's sudden plunge this morning pushed DRC through potential support at $50.00. The stock hit our stop loss at $49.75.

- Suggested Positions -

Sep $50 call (DRC1222i50) Entry $2.50 exit $1.35 (-46.0%)

08/30/12 stopped out @ 49.75
08/28/12 new stop loss @ 49.75

chart:

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


F5 Networks - FFIV - close: 97.39 change: -4.70

Stop Loss: 97.90
Target(s): 109.00
Current Option Gain/Loss: Sep105c: -46.1% & Oct$105c: -30.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/30/12 update: Ouch! FFIV really underperformed the market today with a -4.6% drop. I could not find any specific news behind FFIV's relative weakness today. Just looks like a big drop as investors overreact to the market's decline. Our stop loss was hit at $97.90 after FFIV broke short-term support at $98.00.

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

- Suggested *Small* Positions -

Sep $105 call (FFIV1222i105) Entry $2.88 exit $1.55 (-46.1%)

- or -

Oct $105 call (FFIV1220j105) Entry $5.20 exit $3.60 (-30.7%)

08/30/12 stopped out at $97.90

chart:

Entry on August 29 at $101.00
Average Daily Volume = 1.4 million
Listed on August 28, 2012


Netflix, Inc. - NFLX - close: 60.48 change: -2.96

Stop Loss: 61.80
Target(s): 69.50
Current Option Gain/Loss: -61.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/30/12 update: NFLX underperformed the market with a -4.6% plunge toward round-number support at $60.00. Our stop loss was hit at $61.80.

Looking at the big picture, this recent reversal lower is a new lower high. A close under $60.00 could be used as a new bearish entry point. I'd target the $54-50 area.

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

- Suggested (SMALL) Positions -

Sep $67.50 call (NFLX1222i67.5) Entry $2.23 exit $0.86 (-61.4%)

08/30/12 stopped out at $61.80
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

chart:

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


Qualcomm - QCOM - close: 61.20 change: -0.91

Stop Loss: 61.40
Target(s): 64.25
Current Option Gain/Loss: -14.7%
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/30/12 update: The widespread market weakness was the catalyst for QCOM to see some profit taking. Shares have not broken down from a multi-day sideways consolidation. Our stop loss was hit at $61.40. Odds are good we'll see QCOM dip toward round-number support near $60.00.

- Suggested Positions -

Oct $62.50 Call (QCOM1222J62.5) entry $1.70 exit $1.45 (-14.7%)

08/30/12 stopped out at $61.40
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

chart:

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


United Technologies - UTX - close: 79.06 change: -1.11

Stop Loss: 78.85
Target(s): 84.00
Current Option Gain/Loss: Sep80c: -37.5% & Oct82.50c: -28.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/30/12 update: UTX followed the market lower with a spike down at the open. Shares hit new two-week lows and tagged our stop loss at $78.85 along the way.

- Suggested Positions -

Sep $80 call (UTX1222i80) Entry $1.52 exit $0.95 (-37.5%)

- or -

Oct $82.50 call (UTX1220j82.5) Entry $1.33 exit $0.95 (-28.5%)

08/30/12 stopped out at $78.85
08/27/12 triggered @ 80.30

chart:

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