Editor's Note:

Shares of coffee giant Starbucks (SBUX) hit our bearish target today.

Looking at the rest of our candidates there were a number of intraday bounces or sideways consolidations.

Current Portfolio:


CALL Play Updates

Diageo Plc. - DEO - close: 113.45 change: +0.58

Stop Loss: 111.90
Target(s): 119.75
Current Option Gain/Loss: -39.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
10/22/12: DEO gapped open higher and then slowly faded lower the rest of the day. I remain cautious here but shares did outperform the major indices today.

More aggressive traders may want to give their stop loss more room and place it under the 50-dma instead.

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


Health Care REIT, Inc. - HCN - close: 59.83 change: +0.06

Stop Loss: 58.80
Target(s): 63.50
Current Option Gain/Loss: -54.1%
Time Frame: exit prior to earnings on Nov. 6th,
New Positions: see below

Comments:
10/22/12: HCN spent Monday churning sideways in a 70-cent range. There is no change from my weekend comments.

I would wait for a new bounce above $60.25 before launching new positions. Our multi-week target is $63.50 but we'll exit prior to the Nov. 6th earnings report. FYI: The Point & Figure chart for HCN is bullish with a $70 target.

- Suggested Positions -

Long NOV $60 call (HCN1217k60) Entry $1.20

Entry on October 19 at $60.68
Average Daily Volume = 2.8 million
Listed on October 18, 2012


Medivation, Inc. - MDVN - close: 52.68 change: -0.27

Stop Loss: 49.95
Target(s): 57.00
Current Option Gain/Loss: - 8.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/22/12: MDVN also spent the day churning sideways but eventually settled with a minor loss. Readers may want to wait for a new rally past $53.25 or $53.50 before considering new bullish 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

10/20/12 Friday's bounce looks like a new entry point.
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: 94.27 change: +0.03

Stop Loss: 92.95
Target(s): 99.75
Current Option Gain/Loss:(Oct95c: - 6.8%) & Nov95c: -27.4%
Time Frame: exit prior to earnings on Oct. 25th
New Positions: see below

Comments:
10/22/12: NBL did not make much progress today but shares did see a bullish intraday bounce off the $93.00 level. I am inching up our stop loss to $92.95. We only have two days left on this trade. We will plan on exiting our position on Wednesday at the closing bell to avoid holding over earnings assuming shares don't hit our target or stop loss before then.

- 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

10/22/12 new stop loss @ 92.95, prepare to exit on Oct. 24th at the closing bell
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


Time Warner Cable - TWC - close: 99.29 change: -0.41

Stop Loss: 99.15
Target(s): 104.50
Current Option Gain/Loss: Unopened
Time Frame: Exit prior to the Oct 31st earnings report.
New Positions: Yes, see below

Comments:
10/22/12: It turned out to be a quiet day for TWC. The stock drifted lower under the $100 level. We are waiting for a breakout higher. I am suggesting we open small bullish positions on a breakout higher. We'll use a trigger at $100.60. Our target is $104.50. This is a short-term trade. We want to exit prior to the earnings report on October 31st.

Trigger @ 100.60 *Small Positions*

- Suggested Positions -

buy the Nov $100 call (TWC1217k100)

Entry on October xx at $ xx.xx
Average Daily Volume = 1.9 million
Listed on October 20, 2012


PUT Play Updates

ITT Educational Services - ESI - close: 26.39 change: +0.33

Stop Loss: 30.05
Target(s): 25.25
Current Option Gain/Loss: +24.1%
Time Frame: exit prior to earnings on Oct. 25th
New Positions: see below

Comments:
10/22/12: Hmm... ESI outperformed the market with a +1.2% bounce. Shares were somewhat oversold so a bounce is not surprising. Readers will want to seriously consider an early exit now since we don't have much time left. Right now our target is $25.25 but we need to exit prior to earnings on October 25th and that means we'll have to exit on Oct. 24th at the closing bell.

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

10/22/12 prepare to exit on Oct. 24th at the close
10/20/12 new stop loss @ 30.05, readers may want to go ahead and take profits now (+35%). Adjust target to $25.25.
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: 39.38 change: +0.45

Stop Loss: 40.60
Target(s): 36.00
Current Option Gain/Loss: + 2.7%
Time Frame: exit prior to the Oct. 31st earnings report
New Positions: see below

Comments:
10/22/12: GRMN bounced, recovering about half of Friday's decline. I am looking for new resistance at the $40.00 level, bolstered by the 10-dma and 300-dma.

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


The Mosaic Co. - MOS - close: 54.23 change: +0.26

Stop Loss: 55.05
Target(s): 48.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
10/22/12: MOS dipped toward short-term support near $53.50 and bounced. We're still waiting for a breakdown.

The Oct. 15th low was $53.53. I am suggesting a trigger to buy puts at $53.45. If triggered our target is $48.00 but I will warn you that the $50.00 level might be temporary support. I also want to caution you that MOS' rival POT reports earnings on Oct. 25th and POT's results could definitely influence trading in MOS.

Trigger @ 53.45

- Suggested Positions -

buy the NOV $55 PUT (MOS1217w55)

Entry on October xx at $ xx.xx
Average Daily Volume = 3.9 million
Listed on October 20, 2012


CLOSED BEARISH PLAYS

Starbucks Corp. - SBUX - close: 45.30 change: -0.39

Stop Loss: 47.05
Target(s): 45.10
Current Option Gain/Loss: +92.3%
Time Frame: exit prior to the early November earnings report
New Positions: see below

Comments:
10/22/12: Target achieved.

Over the weekend we adjusted our exit target to $45.10. SBUX was kind enough to fall to $45.09 this afternoon.

- Suggested Positions -

Nov $50 PUT (SBUX1211w50) Entry $2.73 exit $5.25 (+92.3%)

10/22/12 target hit
10/20/12 new stop loss @ 47.05, adjust exit target to $45.10
10/18/12 new stop loss @ 49.51

chart:

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