Editor's Note:

October options expire after tomorrow. Many stocks are churning sideways as they wait for expiration.

We closed CVLT and EQT this morning. We also closed the October position on NBL. SIX hit our target. CACI was stopped out.

Current Portfolio:


CALL Play Updates

Diageo Plc. - DEO - close: 113.09 change: -1.51

Stop Loss: 111.90
Target(s): 119.75
Current Option Gain/Loss: -34.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/18/12: It was a disappointing session for DEO. The stock gapped open lower below its rising 20-dma, which should have offered some support. Now DEO looks poised to test the 30-dma and the bottom of its bullish channel soon. If DEO sees an intraday dip below this level near $112.00 it could hit our stop loss at $111.90. I am not suggesting new positions at this time.

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


Medivation, Inc. - MDVN - close: 51.11 change: -0.42

Stop Loss: 49.95
Target(s): 57.00
Current Option Gain/Loss: -40.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/18/12: MDVN is still not cooperating and readers will want to seriously consider an early exit. Shares are down four days in a row and down eight out of the last nine sessions. The close under its 50-dma is bearish. Even though MDVN is short-term oversold and due for a bounce there is no guarantee it will see one. 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: 96.50 change: +0.36

Stop Loss: 92.75
Target(s): 99.75
Current Option Gain/Loss:(Oct95c: - 6.8%) & Nov95c: + 6.4%
Time Frame: exit prior to earnings on Oct. 25th
New Positions: see below

Comments:
10/18/12: NBL continues to rise and posted a +0.3% gain, which was better than the major indices. We had decided to close our October option position at the open this morning. Unfortunately NBL gapped open lower at $95.82. We still have the November calls. 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.

- Suggested Positions -

(closed on Oct. 18th at the open)
Oct $95 call (NBL1220j95) Entry $1.45 exit $1.35 (- 6.8%)

- or -

Long Nov $95 call (NBL1217k95) Entry $3.10

10/18/12 closed the Oct. call at the open this morning
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


SPX Corp. - SPW - close: 68.94 change: +0.09

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:
10/18/12: SPW continues to churn sideways between $68 and technical resistance at its 200-dma. I suspect SPW will be stuck in this range until after option expiration tomorrow. 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

ITT Educational Services - ESI - close: 27.28 change: -0.48

Stop Loss: 30.40
Target(s): 25.15
Current Option Gain/Loss: - 1.6%
Time Frame: exit prior to earnings on Oct. 25th
New Positions: see below

Comments:
10/18/12: ESI continues to underperform and set a new closing 52-week low today. There is no change from my prior comments. I am not suggesting new positions at this time.

NOTE: The option values are still acting weird. ESI declines but the option declined as well.

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


Garmin Ltd. - GRMN - close: 39.75 change: +0.15

Stop Loss: 40.60
Target(s): 36.00
Current Option Gain/Loss: + 0.0%
Time Frame: exit prior to the Oct. 31st earnings report
New Positions: see below

Comments:
10/18/12: GRMN sank to a new relative low and bounced sharply this afternoon. This is troubling and would suggest GRMN is about to see a stronger oversold bounce. If shares make it past $40.00 we are in trouble. Our stop is at $40.60. I am not suggesting new positions tonight.

Earlier Comments:
We want to limit our position size since the most recent data listed short interest at 16% of the 123 million share float. We will plan to exit prior to the October 31st earnings report.

- Suggested *Small* Positions -

Long NOV $40 PUT (GRMN1217w40) Entry $1.85

Entry on October 18 at $39.51
Average Daily Volume = 787 thousand
Listed on October 17, 2012


Starbucks Corp. - SBUX - close: 47.41 change: -0.98

Stop Loss: 49.51
Target(s): 44.00
Current Option Gain/Loss: +19.0%
Time Frame: exit prior to the early November earnings report
New Positions: see below

Comments:
10/18/12: It looks like the bounce in SBUX has run out of gas. The stock was underperforming the market today with a -2.0% decline. I am lowering our stop loss to $49.51.

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

10/18/12 new stop loss @ 49.51

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


CLOSED BULLISH PLAYS

Commvault Sys. - CVLT - close: 56.93 change: -0.91

Stop Loss: 54.90
Target(s): 62.00
Current Option Gain/Loss: -95.9%
Time Frame: exit prior to earnings on Oct. 30th
New Positions: see below

Comments:
10/18/12: We have been running out of time on our October option trade and the plan was to exit positions at the open this morning. CVLT opened at $57.60.

- Suggested Positions -

Oct $60 Call (CVLT1220j60) Entry $1.24 exit $0.05 (-95.9%)

10/18/12 closed at the open this morning
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

chart:

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


EQT Corp. - EQT - close: 61.23 change: +0.16

Stop Loss: 58.75
Target(s): 61.50
Current Option Gain/Loss: + 63.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/18/12: EQT managed another gain with a +0.2% advance today. Since we were running out of time I suggested we exit positions at the opening bell this morning. EQT gapped open lower at $60.88 before climbing to close up on the session.

- Suggested Positions -

Long Oct $60 call (EQT1220j60) Entry $0.61 exit $1.00*(+63.9)

10/18/12 closed at the open this morning
*option exit price is an estimate since the option did not trade at the time our play was closed.
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

chart:

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


Six Flags Entertainment - SIX - close: 64.21 change: +0.72

Stop Loss: 60.90
Target(s): 64.75
Current Option Gain/Loss: +61.9%
Time Frame: exit prior to the Oct. 24th earnings report
New Positions: see below

Comments:
10/18/12: Target achieved.

SIX rallied to $64.95 before reversing under resistance at the $65.00 level. Our exit target was hit at $64.75. Unfortunately the option did not move very much in spite of SIX's new high.

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 exit $1.70 (+61.9%)

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

chart:

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


CLOSED BEARISH PLAYS

CACI Intl. - CACI - close: 50.72 change: +0.59

Stop Loss: 50.60
Target(s): 45.25
Current Option Gain/Loss: -41.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/18/12: The oversold bounce in CACI has now hit four days in a row. Shares pushed past resistance near $50 and hit our stop loss at $50.60 today.

- Suggested Positions -

Nov $50 PUT (CACI1211w50) Entry $2.30 exit $1.35 (-41.3%)

10/18/12 stopped out at $50.60
10/17/12 Readers may want to exit immediately. New stop loss @ 50.60
10/11/12 new stop loss @ 51.25

chart:

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