Editor's Note:

Wednesday proved to be a quiet session for Wall Street with stocks ending the day in the middle of their range.

We closed DSW and MCD this morning. I have removed DVA.

Current Portfolio:


CALL Play Updates

Alexion Pharma. - ALXN - close: 117.82 change: +1.19

Stop Loss: 112.45
Target(s): 118.50
Current Option Gain/Loss: +83.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/03/12: The rally in ALXN continues with another +1.0% gain. Shares are testing the $118 level now. Readers may want to start taking profits now instead of waiting for ALXN to hit our exit target at $118.50. I am raising our stop loss to $112.40. I am not suggesting new positions at current levels.

- Suggested Positions -

Long Oct $115 call (ALXN1220j115) Entry $2.83

10/03/12 new stop loss @ 112.45
Readers may want to start taking profits now!
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: 58.31 change: +1.69

Stop Loss: 54.90
Target(s): 62.00
Current Option Gain/Loss: -23.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/03/12: CVLT is showing relative strength with a +2.9% gain. I suspect we will see CVLT breakout past the $60 level soon. I am raising the risk on this trade by raising our exit target from $59.85 to $62.00.

- Suggested Positions -

Long Oct $60 Call (CVLT1220j60) Entry $1.24

10/03/12 adjust exit target to $62.00
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


EQT Corp. - EQT - close: 58.32 change: -1.33

Stop Loss: 56.45
Target(s): 63.00
Current Option Gain/Loss: -31.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/03/12: Hmm... I didn't see any specific news behind EQT's relative weakness today. Shares are testing short-term support near $58.00. More conservative traders may want to exit early now or raise their stops. 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


Infosys Ltd. - INFY - close: 49.49 change: +0.02

Stop Loss: 48.90
Target(s): 54.85
Current Option Gain/Loss: Unopened
Time Frame: about 2-to-3 weeks
New Positions: Yes, see below

Comments:
10/03/12: INFY continues to churn sideways under resistance at $50.00 and its 300-dma.

I am suggesting a trigger to buy calls at $50.25. We'll start with a stop loss at $48.90. Our target is $54.85. FYI: The Point & Figure chart for INFY is bullish with a $72 target.

Trigger @ 50.25

- Suggested Positions -

buy the Oct $50 call (INFY1220j50)

Entry on October xx at $ xx.xx
Average Daily Volume = 1.9 million
Listed on October 1, 2012


NetSuite Inc. - N - close: 62.60 change: +0.11

Stop Loss: 59.75
Target(s): 67.50
Current Option Gain/Loss: Oct65: -28.5% & Nov65c: -6.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/03/12: It was a quiet day for N with shares bouncing off their simple 10-dma again. I am not suggesting new positions at this time.

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


Noble Energy, Inc. - NBL - close: 92.79 change: -1.09

Stop Loss: 91.75
Target(s): 99.75
Current Option Gain/Loss: Unopened
Time Frame: exit prior to earnings on Oct. 25th
New Positions: Yes, see below

Comments:
10/03/12: NBL briefly traded above $94.00 but did not hit our trigger to buy calls yet. The stock spent the rest of Wednesday bouncing around the $92-94 zone.

I am suggesting a trigger to buy calls at $94.25 with a stop loss at $91.75. Our target is $99.75. More aggressive traders could aim higher.

Trigger @ 94.25

- Suggested Positions -

buy the Oct $95 call (NBL1220j95)

- or -

buy the Nov $95 call (NBL1217k95)

Entry on October xx at $ xx.xx
Average Daily Volume = 1.0 million
Listed on October 2, 2012


Onyx Pharma. - ONXX - close: 86.47 change: -0.04

Stop Loss: 82.90
Target(s): 89.50
Current Option Gain/Loss: - 6.6%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
10/03/12: ONXX tagged a new high intraday but failed to hold it. I suspect shares might see a dip toward the $85.50-85.00 zone if the market is weak tomorrow.

Earlier Comments:
We started with an aggressive entry point and the plan was to keep our position size small to limit our risk.

- Suggested Positions - *Small Positions*

Long Oct $90 call (ONXX1220j90) Entry $1.50

Entry on October 02 at $85.08
Average Daily Volume = 1.4 million
Listed on October 1, 2012


Sears Holding Corp. - SHLD - close: 56.46 change: +1.06

Stop Loss: 53.95
Target(s): 62.50
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
10/03/12: SHLD is finally starting to show some strength with a +1.9% gain today. I remain cautious here. We are not suggesting new positions.

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: 69.22 change: +0.08

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:
10/03/12: ROK is still hovering between resistance near $70 and support near $68.00. We want to 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


Tech Data Corp. - TECD - close: 44.24 change: -0.88

Stop Loss: 45.75
Target(s): 42.00
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/03/12: TECD underperformed the market with a -1.9% decline. Shares closed at new 2012 lows. I am lowering our stop loss to $45.75.

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

10/03/12 new stop loss @ 45.75
10/01/12 triggered @ 44.90

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


CLOSED BULLISH PLAYS

DSW Inc. - DSW - close: 66.54 change: +0.89

Stop Loss: 64.40
Target(s): 72.50
Current Option Gain/Loss: Oct70c: -80.0% & 2013jan$70c: -25.4%
Time Frame: exit prior to Oct 16th.
New Positions: see below

Comments:
10/03/12: DSW is not moving very fast. Last night we decided to exit positions at the open this morning. DSW opened higher at $65.89.

- Suggested Positions -

Long Oct $70 call (DSW1220j70) Entry $0.50 exit $0.10 (-80%)

- or -

Long 2013 Jan $70 call (DSW1319a70) Entry $2.75 exit $2.05 (-25.4%)

10/03/12 planned exit at the open
10/02/12 prepare to exit at the open tomorrow

chart:

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


DaVita Inc. - DVA - close: 107.70 change: +3.59

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

Comments:
10/03/12: We expected DVA to rally but we were hoping for a pullback first. Unfortunately DVA never hit our buy-the-dip trigger at $102.00 (or $102.50). Now shares have run away from us. I'm not willing to chase it.

Trade did not open.

10/03/12 removed from the newsletter
10/01/12 adjust entry strategy. move trigger to $102.00 and stop to $99.45

chart:

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


McDonald's Corp. - MCD - close: 90.35 change: -0.58

Stop Loss: 89.90
Target(s): 98.00
Current Option Gain/Loss: -71.0%
Time Frame: exit prior to earnings on Oct. 19th
New Positions: see below

Comments:
10/03/12: Last night we decided it was best to abandon ship and exit our MCD positions at the open this morning. The stock underperformed the market with a -0.6% decline and a new drop to what should be support near $90.00.

Earlier Comments:
This is an aggressive, higher-risk trade. We want to use small positions to limit our risk.

- Suggested (SMALL) Positions -

Long Oct $92.50 call (MCD1220j92.5) entry $2.00 exit $0.58 (-71.0%)

10/03/12 planned exit at the open
10/02/12 prepare to exit at the open tomorrow
09/28/12 MCD is downgraded before the bell.
09/22/12 I suspect MCD will see a pullback here.

chart:

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