Editor's Note:

The market is still digesting last week's gains and the implications of the Fed's new QE program.

FLS and RIG were triggered. LO was stopped out.

Current Portfolio:


CALL Play Updates

Alexion Pharma. - ALXN - close: 113.08 change: +1.35

Stop Loss: 107.75
Target(s): 118.50
Current Option Gain/Loss: +20.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/18/12: ALXN is showing more relative strength with another gain and another new high. I wouldn't chase it here. If you're looking for an entry point, wait for a dip.

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: 74.99 change: +0.03

Stop Loss: 73.40
Target(s): 74.75 (Sept calls), $77.50 (Nov calls)
Current Option Gain/Loss:(Sep75c: +40.0%) & Nov75c: +19.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/18/12: CNQR is not seeing any progress. The stock has been drifting sideways this week in a very narrow range.

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: 131.88 change: -1.43

Stop Loss: 129.75
Target(s): 139.50
Current Option Gain/Loss: -13.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/18/12: FLS has hit our buy-the-dip trigger at $132.25. The stock gave up -1% and settled on its 10-dma. I would still consider new positions now or you can wait for a bounce.

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.

- Suggested Positions -

Long Oct $135 call (FLS1220j135) Entry $2.15

09/18/12 triggered at $132.25

Entry on September 18 at $132.25
Average Daily Volume = 521 thousand
Listed on September 15, 2012


Sherwin-Williams - SHW - close: 145.49 change: -0.52

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:
09/18/12: I don't see any changes from my prior comments. More aggressive traders may want to launch positions now. Once again SHW almost hit our buy-the-dip trigger. We want to buy calls at $144.75. 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 $1.40

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


The Ultimate Software Group - ULTI - close: 100.43 change: -0.45

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:
09/18/12: ULTI is not making much progress this week. Shares were up 47 cents yesterday and down 45 cents today. Traders were buying the dip near $100 today. I would consider new positions now at current levels or you could wait for a new rebound over $101.

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: 57.45 change: -0.09

Stop Loss: 54.75
Target(s): 59.90
Current Option Gain/Loss: -10.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/18/12: Hmm... you don't see it on the daily chart but it looks like VRTX had a bad tick with a spike down under the $56.00 level this morning. It's visible on an intraday chart. Otherwise VRTX didn't see a lot of movement today. VRTX continues to struggle with short-term resistance near $58.00.

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

Cerner Corp. - CERN - close: 71.44 change: +0.44

Stop Loss: 71.25
Target(s): 65.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
09/18/12: CERN dipped to round-number support at $70.00 and bounced. We'll have to wait and see if there is any follow through tomorrow. Our plan is unchanged.

I am suggesting a trigger to buy puts at $69.65. We will aim for $65.00.

Trigger @ 69.65

- Suggested Positions -

buy the Oct $70 PUT (CERN1220v70)

Entry on September xx at $ xx.xx
Average Daily Volume = 1.0 million
Listed on September 17, 2012


O'Reilly Automotive - ORLY - close: 81.17 change: +0.69

Stop Loss: 81.55
Target(s): 75.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
09/18/12: ORLY spent the day bouncing between support at $80 and resistance at $82.

I am suggesting a trigger to buy puts at $79.75. If triggered our target is $75.10.

Trigger @ 79.75

- Suggested Positions -

buy the Oct $75 PUT (ORLY1220v75)

Entry on September xx at $ xx.xx
Average Daily Volume = 1.5 million
Listed on September 17, 2012


Transocean Ltd. - RIG - close: 45.15 change: -0.64

Stop Loss: 46.80
Target(s): 42.00
Current Option Gain/Loss: + 2.0%
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
09/18/12: RIG finally broke down to new relative lows and hit our trigger to buy puts at $45.40. We can look for short-term overhead resistance near the 10-dma at $46.40.

- Suggested Positions -

Long Nov $45 PUT (RIG1217w45) Entry $2.45

09/18/12 triggered at $45.40

Entry on September 18 at $45.40
Average Daily Volume = 3.1 million
Listed on September 13, 2012


CLOSED BEARISH PLAYS

Lorillard Inc. - LO - close: 119.14 change: +2.05

Stop Loss: 120.25
Target(s): 110.50
Current Option Gain/Loss: -43.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/18/12: For the second day in a row the tobacco stocks were outperforming the market. LO surged toward resistance near $120 and for the most part struggled with resistance there. Yet LO did see an intraday spike to $120.40, which was enough to stop out our play.

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

(small positions) - Suggested Positions -

Oct $115 PUT (LO1220v115) Entry $2.65 exit $1.50 (-43.3%)

1.69/1.86 09/18/12 stopped out at $120.25
09/12/12 new stop loss @ 120.25
09/12/12 triggered @ 118.50

chart:

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