Editor's Note:

Worries over the fiscal cliff reversed with an intraday bounce on Wednesday.

AWI was stopped out. SHLD was triggered. I have removed FDO. We want to exit our CRS trade at the open tomorrow.

Current Portfolio:


CALL Play Updates

Dillard's Inc. - DDS - close: 88.98 change: +1.26

Stop Loss: 84.95
Target(s): 89.75
Current Option Gain/Loss: +66.6%
Time Frame: exit before Dec. 7th.
New Positions: see below

Comments:
11/28/12: DDS continues to rally and posted +1.4% gain. The stock hit $89.30 intraday. Readers may want to start taking profits now. Currently our exit target is $89.75. I am raising our stop loss to $84.95.

- Suggested Positions -

Long Dec $90 call (DDS1222L90) entry $1.05

11/28/12 new stop loss @ 84.95
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: 63.29 change: +0.95

Stop Loss: 61.75
Target(s): 67.50
Current Option Gain/Loss: + 7.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/28/12: DOV dipped to its simple 10-dma and bounced. Shares managed to recoup nearly all of yesterday's losses. I am raising our stop loss to $61.75.

- Suggested Positions -

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

11/28/12 new stop loss @ 61.75
11/19/12 triggered @ 62.30

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


FMC Corp - FMC - close: 55.49 change: +0.03

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:
11/28/12: FMC produced a sharp spike lower this morning. Traders bought the dip near its simple 40-dma and FMC bounced all the way back into positive territory. Readers can use this intraday rebound as a new bullish entry point to buy calls.

- 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: 82.23 change: -0.85

Stop Loss: 79.90
Target(s): 89.75
Current Option Gain/Loss: - 34.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/28/12: NFLX has been consolidating sideways in the $80-84 zone for almost two weeks now. I am adjusting our stop loss to $79.90. 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

11/28/12 new stop loss @ 79.90
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: -10.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/28/12: Traders bought the dip in ORLY near its 10-dma. Today's rebound looks encouraging but the stock remains under short-term resistance near $93.00.

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: 53.40 change: -0.08

Stop Loss: 49.65
Target(s): 56.50
Current Option Gain/Loss: - 33.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/28/12: Shares of PCYC rebounded intraday along with the market yet shares failed to make it back into positive territory. 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: 102.59 change: +2.40

Stop Loss: 99.40
Target(s): 108.50
Current Option Gain/Loss: - 1.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/28/12: WHR displayed relative strength with a strong bounce off its lows. The stock added +2.39% and tagged a new intraday high.

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: 46.50 change: +0.51

Stop Loss: 48.05
Target(s): 42.50
Current Option Gain/Loss: -34.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/28/12: CRS is not cooperating. The stock dipped toward $45.00 but traders bought the dip near round-number support. Shares now look poised to breakout past short-term resistance near $46.50.

I am suggesting we exit (the rest of our) positions immediately tomorrow morning.

Earlier Comments:
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

11/28/12 prepare to exit at the open tomorrow
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


Humana Inc. - HUM - close: 65.14 change: +0.75

Stop Loss: 66.51
Target(s): 60.25
Current Option Gain/Loss: -29.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/28/12: HUM produced a bit of an oversold bounce today with a +1.1% gain. Readers may want to look for another failed rally under its 10-dma as our next bearish entry point for puts.

- Suggested Positions -

Long DEC $65 PUT (HUM1222x65) entry $1.98

Entry on November 28 at $64.20
Average Daily Volume = 3.0 million
Listed on November 27, 2012


InterOil Corp. - IOC - close: 55.58 change: -2.17

Stop Loss: 60.15
Target(s): 50.50
Current Option Gain/Loss: + 8.1%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
11/28/12: IOC continues to sink. Today's relative weakness (-3.75%) is a good sign for our put play. I am lowering our stop loss down to $60.15.

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

11/28/12 new stop loss @ 60.15

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


Sears Holding - SHLD - close: 44.48 change: -1.57

Stop Loss: 48.55
Target(s): 40.25
Current Option Gain/Loss: -18.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/28/12: Our new SHLD put play is off to a good start. Shares broke down under support near $46.00 and fell to new multi-month lows. Our trigger to buy puts was hit at $45.75.

- Suggested Positions -

Long 2013 Jan $45 PUT (SHLD1319m45) entry $2.15

11/28/12 triggered

Entry on November 28 at $45.75
Average Daily Volume = 1.2 million
Listed on November 26, 2012


CLOSED BULLISH PLAYS

Armstrong World Industries - AWI - close: 49.94 change: -0.05

Stop Loss: 49.25
Target(s): 54.50
Current Option Gain/Loss: -50.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/28/12: AWI only lost five cents for the day but that doesn't tell the whole story. The market's morning plunge helped push AWI to $48.54 intraday. Our stop loss was hit at $49.25 before the stock reversed with the market's intraday rebound.

- Suggested Positions -

DEC $50 call (AWI1222L50) entry $1.65 exit $0.85 (-50%)

11/28/12 stopped out at $49.25

chart:

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


Family Dollar Stores - FDO - close: 69.01 change: +0.07

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

Comments:
11/28/12: We are giving up on FDO. Traders did buy the dip at its 10-dma but the bounce was pretty meager. Our trade has not opened yet so we're dropping it as a candidate. Readers may want to keep an eye on it for a bullish breakout past resistance near $70.00.

- Suggested Positions -

Trade did not open.

11/28/12 removed FDO. trade did not open.

chart:

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