Editor's Note:

The S&P 500 snapped a five-day losing streak with a widespread bounce on Thursday.

Current Portfolio:


CALL Play Updates

Alexion Pharma. - ALXN - close: 113.25 change: +1.29

Stop Loss: 109.40
Target(s): 118.50
Current Option Gain/Loss: +44.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/27/12: ALXN managed a +1.1% bounce but is still within yesterday's trading range so the bearish reversal has not been canceled out yet. I am not suggesting new positions at current levels.

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

09/20/12 new stop loss @ 109.40
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


Commvault Sys. - CVLT - close: 59.31 change: +4.22

Stop Loss: 53.90
Target(s): 59.85
Current Option Gain/Loss: +12.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/27/12: CVLT produced a dramatic surge higher with a +7.6% gain. I couldn't find any specific news to account for this show of relative strength. Our exit target remains $59.85 but more aggressive traders could aim higher.

- Suggested Positions -

Long Oct $60 Call (CVLT1220j60) Entry $1.24

Entry on September 20 at $56.07
Average Daily Volume = 427 thousand
Listed on September 19, 2012


DSW Inc. - DSW - close: 66.60 change: +1.24

Stop Loss: 64.40
Target(s): 72.50
Current Option Gain/Loss: Oct70c: -50.0% & 2013jan$70c: -10.9%
Time Frame: exit prior to Oct 16th.
New Positions: see below

Comments:
09/27/12: DSW rallied +1.8% on Thursday. Shares remain inside the narrow, advancing channel of higher lows and higher highs. The stock is nearing what has been short-term resistance near $67.00. I am not suggesting new positions at this time.

We will tentatively aim for $72.50 but I suspect the $70.00 level might offer some resistance. More conservative traders may want to exit in the $69.50-70.00 zone. We will plan on closing positions prior to Oct. 16th.

- Suggested Positions -

Long Oct $70 call (DSW1220j70) Entry $0.50

- or -

Long 2013 Jan $70 call (DSW1319a70) Entry $2.75

Entry on September 24 at $66.45
Average Daily Volume = 353 thousand
Listed on September 22, 2012


EQT Corp. - EQT - close: 58.84 change: +1.89

Stop Loss: 56.45
Target(s): 63.00
Current Option Gain/Loss: +22.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/27/12: EQT outperformed the market with a strong +3.3% gain on Thursday. This looks like a breakout from its recent sideways consolidation but it needs to get past the mid September high. We will raise the stop loss to $56.45. I am not suggesting new positions at this time.

- Suggested Positions -

Long Oct $60 call (EQT1220j60) Entry $0.61

09/27/12 new stop loss @ 56.45

Entry on September 24 at $ xx.xx
Average Daily Volume = 1.0 million
Listed on September 22, 2012


McDonald's Corp. - MCD - close: 93.27 change: +0.07

Stop Loss: 89.90
Target(s): 98.00
Current Option Gain/Loss: -16.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/27/12: It was a quiet day for MCD with shares churning above the $93.00 level. I don't see any changes from my prior comments. There is still resistance above at $94.00. Odds favor a pullback first before pushing higher.

Earlier Comments:
This is an aggressive, higher-risk trade. There is still additional resistance at the simple 200-dma, the $94.00 level, and another trend line of lower highs. We want to use small positions to limit our risk.

- Suggested (SMALL) Positions -

Long Oct $92.50 call (MCD1220j92.5) entry $2.00

09/22/12 I suspect MCD will see a pullback here.

Entry on September 19 at $93.24
Average Daily Volume = 4.7 million
Listed on September 18, 2012


PUT Play Updates

Rockwell Automation - ROK - close: 69.08 change: +0.31

Stop Loss: 70.10
Target(s): 63.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
09/27/12: ROK produced a minor bounce today. Currently our plan is to buy puts if ROK hits $67.90 or lower. More nimble traders might want to consider buying puts on a failed rally near $70.00 instead.

Trigger @ 67.90

- Suggested Positions -

buy the Oct $65 PUT (ROK1220v65)

Entry on September xx at $ xx.xx
Average Daily Volume = 1.1 million
Listed on September 26, 2012


Ross Stores - ROST - close: 64.91 change: +0.14

Stop Loss: 66.55
Target(s): 60.50
Current Option Gain/Loss: -16.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/27/12: ROST delivered a meager rebound and failed to breakout back above the $65.00 level. I don't see any changes from my previous comments. I would still consider new bearish positions now. More nimble traders could try and launch positions on a failed rally near its 10-dma, which is overhead resistance.

Our target is $60.50. Odds are good the $60.00 level and the simple 200-dma could be support, at least temporary support.

- Suggested Positions -

Long Oct $65 PUT (ROST1220v65) Entry $1.85

Entry on September 26 at $64.62
Average Daily Volume = 1.77 million
Listed on September 25, 2012