Editor's Note:

The stock market had trouble holding any gains on Tuesday and closed near the lows for the session. That doesn't bode well for tomorrow morning.

EQR was stopped out.

Current Portfolio:


CALL Play Updates

Armstrong World Industries - AWI - close: 49.99 change: +0.09

Stop Loss: 49.25
Target(s): 54.50
Current Option Gain/Loss: -24.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/27/12: AWI spent another day trading sideways. If the market sees any sort of significant dip we're going to see AWI hit our stop at $49.25. More aggressive traders may want to use a wider stop loss.

Earlier Comments:
Shares could see another short squeeze. The most recent data listed short interest at 20% of the small 26.4 million share float.

- Suggested Positions -

Long DEC $50 call (AWI1222L50) entry $1.65

Entry on November 21 at $50.25
Average Daily Volume = 685 thousand
Listed on November 20, 2012


Dillard's Inc. - DDS - close: 87.72 change: +1.88

Stop Loss: 84.25
Target(s): 89.75
Current Option Gain/Loss: +33.3%
Time Frame: exit before Dec. 7th.
New Positions: see below

Comments:
11/27/12: As expected shares of DDS rallied on last night's news the company would pay a special $5.00 dividend. The intraday high was $88.71. I am raising our stop loss to $84.25.

I am not suggesting new positions at this time.

- Suggested Positions -

Long Dec $90 call (DDS1222L90) entry $1.05

11/27/12 new stop loss @ 84.25
11/26/12 after the close DDS announces a special $5.00 dividend

Entry on November 20 at $85.05
Average Daily Volume = 489 thousand
Listed on November 19, 2012


Dover Corp - DOV - close: 62.69 change: -0.99

Stop Loss: 59.85
Target(s): 67.50
Current Option Gain/Loss: - 9.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/27/12: DOV underperformed the market with a -1.5% decline. The morning rally attempt failed at short-term resistance near $64.00 again. The stock is headed for what should be short-term support at $62.00.

- Suggested Positions -

Long 2013 Mar $65 call (DOV1316c65) entry $2.10

11/19/12 triggered @ 62.30

Entry on November 19 at $62.30
Average Daily Volume = 1.7 million
Listed on November 17, 2012


Family Dollar Stores - FDO - close: 68.94 change: -0.48

Stop Loss: 68.85
Target(s): 74.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
11/27/12: FDO continues to churn sideways under resistance near $70.00. The intraday high today was $70.11. I am adjusting our entry trigger just a hair from $70.25 to $70.30. If triggered our target is $74.50. More aggressive traders may want to aim higher. The Point & Figure chart is currently bearish but a move above $71.00 would create a brand new triple-top breakout buy signal.

Trigger @ 70.30

- Suggested Positions -

buy the 2013 Jan $72.50 call (FDO1319a72.5)

Entry on November xx at $ xx.xx
Average Daily Volume = 1.2 million
Listed on November 24, 2012


FMC Corp - FMC - close: 55.46 change: -0.04

Stop Loss: 53.80
Target(s): 59.50
Current Option Gain/Loss: - 17.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
11/27/12: FMC's rally stalled a bit on Tuesday. I would expect a dip back to $55.00 soon. Readers can wait for the dip or wait for a bounce off this level before launching positions.

- Suggested *Small* Positions -

Long 2013 Jan $57.50 call (FMC1319a57.5) entry $0.85

Entry on November 27 at $55.31
Average Daily Volume = 642 thousand
Listed on November 26, 2012


Netflix, Inc. - NFLX - close: 83.08 change: +1.02

Stop Loss: 79.25
Target(s): 89.75
Current Option Gain/Loss: - 22.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/27/12: NFLX displayed some relative strength with a +1.2% gain. Traders bought the dip at its 10-dma. The stock remains under resistance at $85 and its 300-dma. I am not suggesting new positions at this time.

Earlier Comments:
NFLX could see a short squeeze. The most recent data listed short interest at 31% of the 54.1 million share float. NFLX can be volatile so I am suggesting small positions to limit our risk.

- Suggested Positions -

Long DEC $85 call (NFLX1222L85) Entry $4.60

11/20/12 new stop loss @ 79.25
11/16/12 triggered @ 82.25

Entry on November 16 at $82.25
Average Daily Volume = 6.5 million
Listed on November 15, 2012


O'Reilly Automotive - ORLY - close: 92.00 change: -0.46

Stop Loss: 89.95
Target(s): 95.75
Current Option Gain/Loss: -21.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/27/12: ORLY continues to churn sideways. If the market dips then I would expect ORLY to test support near $90.00.

Our target is $95.75 but more aggressive traders may want to aim for the $99-100 zone instead.

- Suggested Positions -

Long DEC $95 call (ORLY1222L95) entry $1.90

Entry on November 20 at $92.05
Average Daily Volume = 1.8 million
Listed on November 19, 2012


Pharmacyclics Inc. - PCYC - close: 53.48 change: +0.27

Stop Loss: 49.65
Target(s): 56.50
Current Option Gain/Loss: - 27.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/27/12: PCYC drifted higher on Tuesday and closed with a +0.5% gain. There is no change from my prior comments. More conservative traders may want to raise their stops. I am not suggesting new positions at this time.

Earlier Comments:
I do consider this a more aggressive, higher-risk trade. Anytime you trade a biotech stock it can be a high-risk trade since you never know when a negative headline could send the stock crashing. Our target is $56.50. More aggressive traders could aim for the $59-60 zone instead.

- Suggested *Small* Positions -

long Dec $55 call (PCYC1222L55) entry $3.60

11/20/12 new stop loss @ 49.65
11/19/12 trade opened with PCYC's gap open higher @ 52.21

Entry on November 19 at $52.21
Average Daily Volume = 1.0 million
Listed on November 17, 2012


Whirlpool Corp. - WHR - close: 100.19 change: -0.80

Stop Loss: 99.40
Target(s): 108.50
Current Option Gain/Loss: -23.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/27/12: Profit taking has pulled WHR back down to what should be round-number, psychological support at the $100.00 mark. Readers can use this dip as a new bullish entry point. Our multi-week target is $108.50.

- Suggested *Small* Positions -

Long 2013 Jan $105 call (WHR1319a105) entry $3.75

Entry on November 26 at $101.89
Average Daily Volume = 1.3 million
Listed on November 24, 2012


PUT Play Updates

Carpenter Tech. - CRS - close: 45.99 change: -0.33

Stop Loss: 48.05
Target(s): 42.50
Current Option Gain/Loss: -17.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/27/12: CRS is still drifting sideways but shares closed on their low for the day. It would suggest that the bounce is losing momentum and CRS may be about to resume the down trend.

We still have half a position open. I am not suggesting new positions at this time.

Earlier Comments:
Our multi-week target is $42.50. CRS can be somewhat volatile so readers may want to limit their position size to reduce risk.

- Suggested Positions -

Long Dec $45 PUT (CRS1222x45) Entry $1.15

11/19/12 sold half at the open. unfortunately CRS gapped open higher at $45.94
exit half @ 45.95, option @ $1.20 (+4.3%)
11/17/12 new stop loss @ 48.05, sell half of our position on Monday morning
11/14/12 new stop loss @ 49.05

Entry on November 12 at $48.23
Average Daily Volume = 460 thousand
Listed on November 10, 2012


InterOil Corp. - IOC - close: 57.75 change: -1.60

Stop Loss: 61.05
Target(s): 50.50
Current Option Gain/Loss: -24.8%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
11/27/12: IOC displayed relative weakness with a -2.6% decline. Readers may want to adjust their stop loss lower.

I want to remind readers that this is a more aggressive, higher risk trade. IOC is volatile and has a high amount of short interest.

*Small positions* - Suggested Positions -

Long DEC $55 PUT (IOC1222x55) entry $2.70

Entry on November 21 at $58.50
Average Daily Volume = 790 thousand
Listed on November 20, 2012


Sears Holding - SHLD - close: 46.05 change: -0.86

Stop Loss: 48.55
Target(s): 40.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
11/27/12: SHLD continues to show weakness. Yet shares have not hit our entry trigger yet at $45.75. Odds are SHLD will hit our entry point tomorrow.

Earlier Comments:
Shares of SHLD are now hovering above support near $46.00. I am suggesting a trigger to open bearish positions at $45.75. If triggered our target is $40.25.

Trigger @ 45.75

- Suggested Positions -

buy the 2013 Jan $45 PUT (SHLD1319m45)

Entry on November xx at $ xx.xx
Average Daily Volume = 1.2 million
Listed on November 26, 2012


CLOSED BEARISH PLAYS

Equity Residential - EQR - close: 55.25 change: +0.82

Stop Loss: 55.10
Target(s): 50.05
Current Option Gain/Loss: -32.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/27/12: EQR displayed a lot of volatility today. I warned readers that EQR might see a gap down and stated last night that if shares gapped open under $53.00 we would not open positions. Unfortunately the stock only gapped open lower at $53.50. Even more unfortunate is that traders decided to buy the dip, which is a bit surprising. The stock surged from $53.50 to almost $57 before paring its gains. We had what is essentially a worst case scenario with EQR gapping down for our entry and then surging past our stop loss at $55.10.

2013 Jan $55 PUT (EQR1319m55) entry $2.60 exit $1.75 (-32.6%)

11/27/12 trade opened on gap down at $53.50
trade closed at stop loss $55.10

chart:

Entry on November 27 at $53.50
Average Daily Volume = 1.69 million
Listed on November 21, 2012