Editor's Note:

Positive news on housing starts and building permits kept the rally alive today.

I am suggesting an early exit for our October options in CVLT and EQT. We saw MOS and TECD get stopped out.

Current Portfolio:


CALL Play Updates

Commvault Sys. - CVLT - close: 57.84 change: -0.70

Stop Loss: 54.90
Target(s): 62.00
Current Option Gain/Loss: -91.9%
Time Frame: exit prior to earnings on Oct. 30th
New Positions: see below

Comments:
10/17/12: There was no follow through on yesterday's rally. I fear that CVLT will remain stuck inside the $55-60 zone until after option expiration.

I am suggesting we exit our October calls at the closing bell tomorrow assuming there is a bid for them.

- Suggested Positions -

Long Oct $60 Call (CVLT1220j60) Entry $1.24

10/17/12 prepare to exit at the close tomorrow!
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


Diageo Plc. - DEO - close: 114.60 change: -0.53

Stop Loss: 111.90
Target(s): 119.75
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/17/12: Shares of DEO gapped open lower at $114.24 but traders bought the dip almost immediately. I don't see any changes from my prior comments. I would still consider new positions now or on a dip near $114.00.

Earlier Comments:
The stock tends to gap open each morning as shares here in the U.S. react to trade that started in Europe. Thus we want to limit our position size due to the volatility.

- Suggested *Small* Positions -

Long NOV $115 call (DEO1217k115) Entry $1.90

Entry on October 17 at $114.24
Average Daily Volume = 529 thousand
Listed on October 16, 2012


EQT Corp. - EQT - close: 61.07 change: +0.55

Stop Loss: 58.75
Target(s): 61.50
Current Option Gain/Loss: + 72.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/17/12: EQT almost hit our exit target today. The intraday high was $61.39. We were aiming for $61.50. Since we're almost out of time I am suggesting we go ahead and exit positions at the opening bell tomorrow. More aggressive traders could hold on but remember you only have two days left.

- Suggested Positions -

Long Oct $60 call (EQT1220j60) Entry $0.61

10/17/12 prepare to exit at the open tomorrow
10/15/12 new stop loss @ 58.75, readers may want to exit now
10/13/12 adjust exit down to $61.50
10/11/12 new stop loss @ 58.40, readers may want to take profits now with the bid on our option at $1.30 (+113%)
10/08/12 readers may want to take profits now
10/06/12 new stop loss @ 57.75
10/04/12 new stop loss @ 57.45
09/27/12 new stop loss @ 56.45

Entry on September 24 at $57.89
Average Daily Volume = 1.0 million
Listed on September 22, 2012


Medivation, Inc. - MDVN - close: 51.53 change: -0.33

Stop Loss: 49.95
Target(s): 57.00
Current Option Gain/Loss: -31.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/17/12: I am about ready to pull the plug on our MDVN trade. The stock is not cooperating. Shares should have bounced at support near its rising 50-dma. Instead MDVN has been underperforming the market and has now closed underneath this level of technical support.

More conservative traders will want to seriously consider an exit immediately. I am not suggesting new positions.

Earlier Comments:
We will plan to exit prior to the early November earnings report.

- Suggested Positions -

Long Nov $55 CALL (MDVN1217K55) Entry $2.00

10/17/12 MDVN is not cooperating and closed under the 50-dma, readers may want to exit immediately.
10/15/12 triggered @ 52.50

Entry on October 15 at $52.50
Average Daily Volume = 780 thousand
Listed on October 12, 2012


Noble Energy, Inc. - NBL - close: 96.14 change: +1.45

Stop Loss: 92.75
Target(s): 99.75
Current Option Gain/Loss: Oct95c: - 3.4% & Nov95c: + 6.4%
Time Frame: exit prior to earnings on Oct. 25th
New Positions: see below

Comments:
10/17/12: Oil and energy stocks were showing strength today and NBL rallied to a new four-week high. I am raising our stop loss to $92.75. Since we only have two days left on our October calls I am suggesting an immediate exit at the opening bell tomorrow for our October $95 call. More aggressive traders could hold on since NBL might be able to extend its gains. Our exit target for the November call remains $99.75. I am not suggesting new positions at this time. Keep in mind that we do not want to hold over the late October earnings report.

Trigger @ 94.25

- Suggested Positions -

Long Oct $95 call (NBL1220j95) Entry $1.45

- or -

Long Nov $95 call (NBL1217k95) Entry $3.10

10/17/12 new stop loss @ 92.75
Prepare to exit the Oct. $95 call at the open tomorrow morning

Entry on October 08 at $94.25
Average Daily Volume = 1.0 million
Listed on October 2, 2012


Six Flags Entertainment - SIX - close: 63.49 change: -0.50

Stop Loss: 60.90
Target(s): 64.75
Current Option Gain/Loss: +38.0%
Time Frame: exit prior to the Oct. 24th earnings report
New Positions: see below

Comments:
10/17/12: SIX saw some profit taking after yesterday's rally. Broken resistance near $62.00 should offer a little short-term support.

I am not suggesting new positions at this time. Don't forget that we do not want to hold over the October 24th earnings report.

FYI: The Point & Figure chart for SIX is bullish with a long-term $98 target. NOTE: Readers may want to keep their position size small. The bid/ask spread on options for SIX are a little wide.

- Suggested Positions -

Long Nov $65 call (SIX1217k65) Entry $1.05

10/16/12 adjust exit target down to $64.75

Entry on October 12 at $62.25
Average Daily Volume = 334 thousand
Listed on October 10, 2012


SPX Corp. - SPW - close: 68.85 change: -0.05

Stop Loss: 68.40
Target(s): 74.00
Current Option Gain/Loss: Unopened
Time Frame: exit prior to earnings on Oct. 31st.
New Positions: Yes, see below

Comments:
10/17/12: SPW was little changed on the session. Traders bought the dip near $68.00. We are waiting for a breakout past $70.00.

I am suggesting a trigger to buy calls at $70.25. If triggered our target is $74.00 but we'll plan on exiting prior to the Oct. 31st earnings report. FYI: The Point & Figure chart for SPW is bullish with an $85 target.

Trigger @ 70.25

- Suggested Positions -

buy the NOV $70 call (SPW1217k70)

Entry on October xx at $ xx.xx
Average Daily Volume = 594 thousand
Listed on October 15, 2012


PUT Play Updates

CACI Intl. - CACI - close: 50.13 change: +0.66

Stop Loss: 50.60
Target(s): 45.25
Current Option Gain/Loss: -28.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/17/12: CACI may have gotten a boost today after news surfaced the company won another large contract with the U.S. Army. Today's close above its 10-dma and the $50.00 mark is definitely short-term bullish. More conservative traders may want to exit immediately!

I am not suggesting new positions. We will lower our stop loss down to $50.60.

- Suggested Positions -

Long Nov $50 PUT (CACI1211w50) Entry $2.30

10/17/12 Readers may want to exit immediately. New stop loss @ 50.60
10/11/12 new stop loss @ 51.25

Entry on October 09 at $49.64
Average Daily Volume = 373 thousand
Listed on October 8, 2012


ITT Educational Services - ESI - close: 27.76 change: -1.88

Stop Loss: 30.40
Target(s): 25.15
Current Option Gain/Loss: + 8.0%
Time Frame: exit prior to earnings on Oct. 25th
New Positions: see below

Comments:
10/17/12: It was a good day for ESI bears with the stock falling -6.3%. This was likely a reaction to APOL's earnings warning last night. We are adjusting our stop loss lower to $30.40. I am not suggesting new positions at this time.

NOTE: Oddly enough even though ESI dropped sharply our option value declined.

Earlier Comments:
I want to reiterate my caution about using small positions. ESI already has a high amount of short interest because so many investors think this stock is going lower.

- Suggested *SMALL* Positions -

Long 2013 Jan $27.50 PUT (ESI1319m27.5) Entry $3.10

10/17/12 new stop loss @ 30.40

Entry on October 04 at $29.47
Average Daily Volume = 408 thousand
Listed on October 3, 2012


Starbucks Corp. - SBUX - close: 48.39 change: -0.57

Stop Loss: 50.05
Target(s): 44.00
Current Option Gain/Loss: - 4.0%
Time Frame: exit prior to the early November earnings report
New Positions: see below

Comments:
10/17/12: There was no follow through on yesterday's bounce in SBUX. The stock underperformed today with a -1.1% decline. I am not suggesting new positions at this time.

Our target is $44.00. More aggressive traders could aim lower since SBUX appears to be in a new trend of lower highs and lower lows.

- Suggested Positions -

Long Nov $50 PUT (SBUX1211w50) Entry $2.73

Entry on October 08 at $48.40
Average Daily Volume = 8.1 million
Listed on October 6, 2012


CLOSED BEARISH PLAYS

Deckers Outdoor - DECK - close: 38.81 change: +2.38

Stop Loss: 36.55
Target(s): 30.25
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the late October earnings report
New Positions: see below

Comments:
10/17/12: DECK is not working for us. Today's short covering rally pushed it above short-term resistance at $38.00. I am dropping DECK as a bearish candidate. Our trade never opened.

Trigger @ 34.45

Trade did not open.

10/17/12 removed from the newsletter

chart:

Entry on October xx at $ xx.xx
Average Daily Volume = 2.5 million
Listed on October 9, 2012


Mosaic Co. - MOS - close: 54.99 change: +0.50

Stop Loss: 55.55
Target(s): 50.15
Current Option Gain/Loss: -48.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/17/12: Sometimes the market does not make sense. MOS rival Potash Corp (POT) lowered their earnings forecasts. This should have sent the industry stocks lower. Instead MOS gapped down at the open and rallied. It's possible investors think weakness in POT means MOS is gaining market share but that's just speculation.

The bounce in MOS today hit our stop at $55.55.

- Suggested Positions -

Nov $52.50 PUT (MOS1217w52.5) Entry $1.25 exit $0.65 (-48.0%)

10/17/12 stopped out @ $55.55
10/15/12 trade opened

chart:

Entry on October 15 at $53.90
Average Daily Volume = 4.2 million
Listed on October 12, 2012


Tech Data Corp. - TECD - close: 44.50 change: +0.71

Stop Loss: 44.25
Target(s): 42.00
Current Option Gain/Loss: -12.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/17/12: The oversold bounce in TECD continued and shares rallied +1.6% on top of yesterday's +2% gain. TECD broke through short-term resistance at $44.00 and hit our stop loss at $44.25.

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 exit $1.70 (-12.8%)

10/17/12 stopped out at $44.25
10/15/12 new stop loss @ 44.25
10/10/12 new stop loss at $44.65
10/09/12 new stop loss @ 45.15
10/03/12 new stop loss @ 45.75
10/01/12 triggered @ 44.90

chart:

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