Editor's Note:

A better than expected ISM data point this morning fueled a market rebound but gains were fading into the closing bell.

N and TECD were both triggered today.

Current Portfolio:


CALL Play Updates

Alexion Pharma. - ALXN - close: 116.00 change: +1.60

Stop Loss: 111.75
Target(s): 118.50
Current Option Gain/Loss: +62.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/01/12: ALXN continues to show strength. The stock hit another new high, this time at $117.65. Readers may want to start taking profits early. I am not suggesting new positions at current levels.

We are raising the stop loss to $111.75.

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

10/01/12 new stop loss @ 111.75
09/29/12 new stop loss @ 110.75
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: 57.56 change: -1.10

Stop Loss: 54.90
Target(s): 59.85
Current Option Gain/Loss: -39.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/01/12: Shares of CVLT underperformed today thanks to a downgrade this morning. Shares did find support near its 10-dma. We will raise the stop loss up to $54.90.

I am not suggesting new positions at this time. More aggressive traders may want to aim higher.

- Suggested Positions -

Long Oct $60 Call (CVLT1220j60) Entry $1.24

10/01/12 new stop loss @ 54.90
09/29/19 new stop loss @ 54.40

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


DSW Inc. - DSW - close: 65.75 change: -0.97

Stop Loss: 64.40
Target(s): 72.50
Current Option Gain/Loss: Oct70c: -70.0% & 2013jan$70c: -34.5%
Time Frame: exit prior to Oct 16th.
New Positions: see below

Comments:
10/01/12: DSW tagged a new high this morning above $67.00. Unfortunately the rally didn't last very long and DSW has reversed into a bearish engulfing candlestick reversal pattern. I am expecting a dip to $65.00. More conservative traders may want to tighten their stop loss. 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


DaVita Inc. - DVA - close: 103.44 change: -0.17

Stop Loss: 99.45
Target(s): 108.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
10/01/12: DVA spiked to a new high above $105 before reversing into negative territory. This could be a short-term top. I am adjusting our buy-the-dip trigger down from $102.50 to $102.00 and we'll move the stop loss to $99.45.

FYI: The Point & Figure chart for DVA is bullish with a $141 target.

Trigger @ 102.00 (stop 99.45)

- Suggested Positions -

buy the Oct $105 call (DVA1220j105)

10/01/12 adjust entry strategy. move trigger to $102.00 and stop to $99.45

Entry on September xx at $ xx.xx
Average Daily Volume = 881 thousand
Listed on September 29, 2012


EQT Corp. - EQT - close: 60.04 change: +1.04

Stop Loss: 56.45
Target(s): 63.00
Current Option Gain/Loss: +96.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/01/12: The rally continues in EQT. The stock is challenging resistance at the $60.00 mark. I would not be surprised to see a dip back toward the $59.00 area before EQT continues higher.

More conservative traders may want to start taking profits now. 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: 91.99 change: +0.24

Stop Loss: 89.90
Target(s): 98.00
Current Option Gain/Loss: -86.5%
Time Frame: exit prior to earnings on Oct. 19th
New Positions: see below

Comments:
10/01/12: I am worried about MCD. The bounce didn't make it very far before starting to fade. I am not suggesting new positions at this time.

NOTE: I have corrected the gain/loss based on the option's current value. Looks like I had the values wrong in the last newsletter.

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

09/28/12 MCD is downgraded before the bell.
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


NetSuite Inc. - N - close: 62.68 change: -1.12

Stop Loss: 59.75
Target(s): 67.50
Current Option Gain/Loss: Oct65: -14.2% & Nov65c: -5.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/01/12: Our new play on N has been triggered. The plan was to buy a dip at $62.50 and shares hit our entry point this afternoon. I would still consider new positions now at current levels. Our multi-week target is $67.50. FYI: The Point & Figure chart for N is bullish with an $82 target.

- Suggested Positions -

Long Oct $65 call (N1220j65) Entry $1.05

- or -

Long Nov $65 call (N1217k65) Entry $2.90

10/01/12 triggered @ 62.50

Entry on October 01 at $62.50
Average Daily Volume = 565 thousand
Listed on September 29, 2012


Sears Holding Corp. - SHLD - close: 55.30 change: -0.19

Stop Loss: 53.95
Target(s): 62.50
Current Option Gain/Loss: - 6.8%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
10/01/12: SHLD is not cooperating with a failed rally off its intraday highs. More conservative traders will want to consider an early exit now. I am not suggesting new positions at this time.

Earlier Comments:
SHLD could see some short covering. The most recent data listed short interest at 37% of the 31.3 million share float.

NOTE: There are two October $57.50 option strikes. Make sure you pick the normal one. Pay attention to the symbol.

- Suggested Positions -

Long Oct $57.50 call (SHLD1220j57.5) Entry $1.75

Entry on September 28 at $56.11
Average Daily Volume = 1.7 million
Listed on September 27, 2012


PUT Play Updates

Rockwell Automation - ROK - close: 69.38 change: -0.17

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:
10/01/12: ROK rallied past resistance near $70 and its 50-dma only to see its strength reverse. Aggressive traders could launch positions now with a stop above today's high. I am suggesting we stick to our original plan and wait for a breakdown. I am suggesting a trigger to buy puts at $67.90.

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: 66.15 change: +1.56

Stop Loss: 66.55
Target(s): 60.50
Current Option Gain/Loss: -51.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/01/12: I cautioned readers over the weekend that we could see ROST bounce back toward the $66.00 level. Sure enough the stock's oversold bounce surged toward $66. The stock is above its 10-dm and testing its 100-dma. If there is any follow through tomorrow ROST will likely hit our stop loss at $66.55.

I am not suggesting new positions at this time.

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


Tech Data Corp. - TECD - close: 45.00 change: -0.25

Stop Loss: 46.30
Target(s): 42.00
Current Option Gain/Loss: - 10.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/01/12: Our new play on TECD is now open. Shares hit our entry point at $44.90. Today's low was $44.70. If you want to see confirmation of the down trend then wait for a drop under today's low. The drop under $45.00 did produce a new P&F chart sell signal that now has a $37 target.

Earlier Comments:
I would keep our position size small to limit our risk.

*Small Positions* - Suggested Positions -

Long Nov $45 PUT (TECD1211w45) Entry $1.95

10/01/12 triggered @ 44.90

Entry on October 01 at $44.90
Average Daily Volume = 333 thousand
Listed on September 29, 2012