Editor's Note:

The market produced a minor pullback on Monday after last week's gains.

We closed ATHN and CRI at the open this morning. ULTI was triggered.

Current Portfolio:


CALL Play Updates

Alexion Pharma. - ALXN - close: 111.73 change: +0.01

Stop Loss: 107.75
Target(s): 118.50
Current Option Gain/Loss: + 2.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/17/12: ALXN displayed relative strength with a +1.1% gain on Monday. The stock hit another high early this morning.

Our multi-week target is $118.50. FYI: The Point & Figure chart for ALXN is bullish with a $124 target.

- Suggested Positions -

Long Oct $115 call (ALXN1220j115) Entry $2.83

09/15/12 new stop loss @ 107.75

Entry on September 10 at $110.72
Average Daily Volume = 905 thousand
Listed on September 08, 2012


Concur Technologies - CNQR - close: 74.96 change: -0.67

Stop Loss: 73.40
Target(s): 74.75 (Sept calls), $77.50 (Nov calls)
Current Option Gain/Loss:(Sep75c: +40.0%) & Nov75c: +22.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/17/12: CNQR saw a little bit of profit taking with a dip toward short-term technical support at the rising 10-dma on Monday.

I am not suggesting new positions at this time.

Earlier Comments:
Our plan was to exit the September $75 calls when CNQR hits $74.75. That target was hit on Thursday, Sept. 6th. Our target to exit the November calls is at $77.50.

- Suggested Positions -

(target hit for Sept calls @ 74.75 on CNQR)
Sep $75 call (CNQR1222i75) Entry $1.25 exit $1.75 (+40.0%)

- or -

Long Nov $75 call (CNQR1217j75) Entry $3.60

09/15/12 new stop loss @ 73.40
09/12/12 new stop loss @ 72.45
09/06/12 target hit for the Sept. calls @ 74.75
09/06/12 new stop loss @ 71.70
09/04/12 adjust exit target for Sept. calls to $74.75
adjust exit target for Nov. calls to $77.50
+ new stop loss @ 71.25
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


Flowserve Corp. - FLS - close: 133.31 change: -1.50

Stop Loss: 129.75
Target(s): 139.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
09/17/12: We were expecting FLS to see a pullback today. Shares fell to $132.66 intraday. Our buy-the-dip entry point is at $132.25 so the trade is not open yet.

There is potential resistance in the $135 area but we are aiming for $139.50. The Point & Figure chart for FLS is bullish with a $151 target.

buy-the-dip trigger @ 132.25

- Suggested Positions -

buy the Oct $135 call (FLS1220j135) current ask $2.70

Entry on September xx at $ xx.xx
Average Daily Volume = 521 thousand
Listed on September 15, 2012


Sherwin-Williams - SHW - close: 146.01 change: -0.21

Stop Loss: 141.35
Target(s): 149.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
09/17/12: We were also expecting a dip in SHW today. The stock did pullback but not by much. Traders bought the dip twice near $145.00. More aggressive traders may want to buy this intraday bounce today. We will stick with our plan and trigger at $144.75 for now. Our initial target is $149.75. FYI: The Point & Figure chart for SHW is bullish with a long-term $192 target.

Trigger @ 144.75

- Suggested Positions -

buy the Oct $150 call (SHW1220j150) current ask $1.65

Entry on September xx at $ xx.xx
Average Daily Volume = 814 thousand
Listed on September 15, 2012


The Ultimate Software Group - ULTI - close: 100.88 change: +0.47

Stop Loss: 97.45
Target(s): 106.00 or 109.50
Current Option Gain/Loss: -28.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/17/12: As expected ULTI saw some follow through on Friday's bounce. Shares actually opened at $100.17 and then spiked to $102.80 before trimming its gains. Our trade was opened at $100.75. I would still consider new positions now at current levels.

I am setting two different targets. Our conservative target is $106.00. Our aggressive target is $109.50.

- Suggested Positions -

Long Oct $105 call (ULTI1220j105) Entry $2.45

Entry on September 17 at $100.75
Average Daily Volume = 169 thousand
Listed on September 15, 2012


Vertex Pharma. - VRTX - close: 57.54 change: -0.54

Stop Loss: 54.75
Target(s): 59.90
Current Option Gain/Loss: - 7.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/17/12: It looks like the rally in VRTX has stalled at resistance near $58.00. Shares gave up -0.9% today. Look for short-term support at the rising 10-dma.

Earlier Comments:
I am suggesting small bullish positions if VRTX can trade at $55.75. This is a higher-risk trade. You can see from the chart that VRTX has been very volatile over the last few months. We want to limit our position size to reduce our risk.

- Suggested Positions -

Long Oct $57.50 call (VRTX1220j57.5) Entry $3.80

09/15/12 adjust exit target to $59.90
09/13/12 new stop loss @ 54.75
09/06/12 new stop loss @ 54.25
09/06/12 triggered @ 55.75

Entry on September 06 at $55.75
Average Daily Volume = 1.4 million
Listed on September 05, 2012


PUT Play Updates

Lorillard Inc. - LO - close: 117.09 change: +1.87

Stop Loss: 120.25
Target(s): 110.50
Current Option Gain/Loss: -15.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/17/12: Positive analyst comments may have helped LO bounce today but multiple cigarette-related stocks outperformed the market on Monday. LO rebounded from round-number support at $115 to add +1.6%. More conservative traders may want to tighten their stops. I am not suggesting new positions at this time.

Earlier Comments:
We want to keep our position size small to start.

(small positions) - Suggested Positions -

Long Oct $115 PUT (LO1220v115) Entry $2.65

09/12/12 new stop loss @ 120.25
09/12/12 triggered @ 118.50

Entry on September 12 at $118.50
Average Daily Volume = 963 thousand
Listed on September 11, 2012


Transocean Ltd. - RIG - close: 45.79 change: -0.79

Stop Loss: 46.80
Target(s): 42.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
09/17/12: RIG continues to look vulnerable and shares underperformed with a -1.69% decline today. I am suggesting a trigger to buy puts at $45.40. Our multi-week target is $42.00.

Trigger @ 45.40

- Suggested Positions -

buy the Nov $45 PUT (RIG1217w45) current ask $2.32

Entry on September xx at $ xx.xx
Average Daily Volume = 3.1 million
Listed on September 13, 2012


CLOSED BULLISH PLAYS

AthenaHealth, Inc. - ATHN - close: 89.86 change: -0.61

Stop Loss: 89.75
Target(s): 97.00
Current Option Gain/Loss: -31.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/17/12: ATHN was acting weak on Friday so we decided to close positions early this morning. Shares opened lower at $90.16 and then dipped under support at $90 and the 50-dma before bouncing.

- Suggested *Small* Positions -

Oct $95 call (ATHN1220j95) Entry $3.20 exit $2.00* (-37.5%)

*option exit price is an estimate since the option did not trade at the time our play was closed.
09/17/12 closed this morning
09/15/12 prepare to exit on Monday morning
09/13/12 new stop loss @ 89.75

chart:

Entry on September 07 at $91.50
Average Daily Volume = 345 thousand
Listed on September 06, 2012


Carter's Inc. - CRI - close: 56.61 change: +0.02

Stop Loss: 55.75
Target(s): 59.85
Current Option Gain/Loss: -30.4%
Time Frame: 3 weeks
New Positions: see below

Comments:
09/17/12: CRI has been stuck in a sideways trading range the last few days. We decided this weekend to exit positions on Monday. CRI opened at $56.59.

- Suggested Positions -

Sep $55 call (CRI1222i55) Entry $2.30 exit $1.60 (-30.4%)

09/17/12 closed this morning
09/15/12 prepare to exit on Monday morning
09/13/12 new stop loss @ 55.75
09/11/12 new stop loss @ 54.90
09/04/12 triggered @ 56.25

chart:

Entry on September 04 at $56.25
Average Daily Volume = 441 thousand
Listed on September 01, 2012