Editor's Note:

The major market indices continue to advance. The NASDAQ, the Dow Industrials and the Russell 2000 have all closed above round-number resistance levels.

CRS was closed this morning.

We want to exit our NFLX trade tomorrow morning.

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: +57.1%
Time Frame: exit before Dec. 7th.
New Positions: see below

Comments:
11/29/12: I was surprised that DDS didn't rally to $90 today given the market's widespread gains. The stock churned sideways in the $89.50-88.00 zone. We are still aiming to exit at $89.75 but readers may want to go ahead and exit early now. I am not suggesting new positions.

- 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: 64.01 change: +0.72

Stop Loss: 61.75
Target(s): 67.50
Current Option Gain/Loss: +23.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/29/12: DOV has bounced back to resistance near $64.00. Shares look ready to make a run at $65.00 soon. I am not suggesting new positions at this time.

- 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: 55.50 change: +0.01

Stop Loss: 53.80
Target(s): 59.50
Current Option Gain/Loss: - 29.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
11/29/12: Thursday was definitely a forgettable session for FMC. The stock churned sideways and closed virtually unchanged on the session. This lack of participation in today's market rally is a bit concerning.

- 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: 81.38 change: -0.85

Stop Loss: 79.90
Target(s): 89.75
Current Option Gain/Loss: - 50.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/29/12: NFLX seems to be growing weaker. The stock remains inside the $80-84 trading range. It could bounce at $80.00 again but shares have not participated in the market's recent rally. I am suggesting we abandon ship and exit early tomorrow morning at the open.

- Suggested Positions -

Long DEC $85 call (NFLX1222L85) Entry $4.60

11/29/12 prepare to exit tomorrow at the open
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: 92.85 change: -0.16

Stop Loss: 89.95
Target(s): 95.75
Current Option Gain/Loss: -15.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/29/12: Hmm... looking at an intraday chart of ORLY would suggest our trade has been stopped out. Yet I checked multiple sources and the intraday low was only $90.39. That would suggest the chart is showing a bad tick. ORLY spent the day churning sideways. I am not suggesting new positions at this time.

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


Precision Castparts - PCP - close: 183.11 change: +1.63

Stop Loss: 176.90
Target(s): 188.00
Current Option Gain/Loss: +18.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/29/12: PCP continues to show strength. The stock gapped open higher at $182.04 and rallied to a new high at $184.36 before trimming its gains.

I have listed the December calls but you might want to use the January calls instead.

- Suggested *Small* Positions -

Long DEC $185 call (PCP1222L185) Entry $1.85

Entry on November 29 at $182.04
Average Daily Volume = 762 thousand
Listed on November 28, 2012


Pharmacyclics Inc. - PCYC - close: 54.10 change: +0.70

Stop Loss: 49.65
Target(s): 56.50
Current Option Gain/Loss: - 22.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/29/12: PCYC outperformed the market with a +1.3% gain but shares did fail at round-number resistance at the $55.00 level.

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


Trimble Navigation - TRMB - close: 55.68 change: +0.36

Stop Loss: 53.40
Target(s): 59.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
11/29/12: TRMB gapped open higher this morning but shares have failed to breakout past resistance at $56.00.

I am suggesting small bullish positions if TRMB can trade at $56.15 or higher. If triggered our short-term target is $59.75.

Trigger @ 56.15

- Suggested Positions -

buy the 2013 Jan $57.50 call (TRMB1319a57.5)

Entry on November xx at $ xx.xx
Average Daily Volume = 708 thousand
Listed on November 28, 2012


Whirlpool Corp. - WHR - close: 102.52 change: -0.07

Stop Loss: 99.40
Target(s): 108.50
Current Option Gain/Loss: - 6.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/29/12: WHR saw a little profit taking today after yesterday's rally higher. I don't see any changes from my prior comments on WHR.

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

Humana Inc. - HUM - close: 65.73 change: +0.59

Stop Loss: 66.51
Target(s): 60.25
Current Option Gain/Loss: -44.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/29/12: HUM has bounced back to what should be short-term resistance near $66.00 and its simple 10-dma. A failure here can be used as a new bearish entry point.

- 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: 55.13 change: -0.45

Stop Loss: 60.15
Target(s): 50.50
Current Option Gain/Loss: +14.8%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
11/29/12: IOC continues to underperform the market. Shares lost another -0.8% today yet it's hugging the $55.00 level. I am not suggesting new positions at this time.

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: 43.10 change: -1.38

Stop Loss: 48.55
Target(s): 40.25
Current Option Gain/Loss: + 1.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/29/12: The sell-off in SHLD continues with another new multi-month low. Readers may want to start adjusting their stops lower.

- 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 BEARISH PLAYS

Carpenter Tech. - CRS - close: 47.96 change: +1.46

Stop Loss: 48.05
Target(s): 42.50
Current Option Gain/Loss: -52.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
11/29/12: Yesterday looked like a bullish reversal in CRS so last night we decided it would be best to exit early. The plan was to close positions at the open this morning.

Earlier Comments:
CRS can be somewhat volatile so readers may want to limit their position size to reduce risk.

- Suggested Positions -

Dec $45 PUT (CRS1222x45) Entry $1.15 exit $0.55* (-52.1%)

11/29/12 closed this morning
*option exit price is an estimate since the option did not trade at the time our play was closed.
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

chart:

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