Editor's Note:

Shares of Dillard's Inc. (DDS) hit our bullish target on Friday.

Elsewhere we closed our NFLX trade.

Current Portfolio:


CALL Play Updates

Dover Corp - DOV - close: 64.01 change: +0.72

Stop Loss: 61.75
Target(s): 67.50
Current Option Gain/Loss: +14.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/01/12: Friday morning there was news that DOV had acquired Anthony International, a specialty glass company, for $602.5 million. The headline did not seem to have much impact on DOV's stock price. Shares slowly faded toward the $63.50 level on Friday. The trend remains higher. We can look for short-term support at the 10-dma. 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

chart:

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


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

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:
12/01/12: FMC quietly consolidated sideways under short-term resistance at $56.00. If the stock dips we can look for potential support at the 50-dma and 100-dma. I am not suggesting new positions at current levels.

- Suggested *Small* Positions -

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

chart:

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


O'Reilly Automotive - ORLY - close: 94.08 change: +1.23

Stop Loss: 89.95
Target(s): 95.75
Current Option Gain/Loss: + 2.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/01/12: ORLY displayed relative strength on Friday with a +1.3% gain and a new four-month high. It's possible the $95.00 level could be round-number resistance but we're aiming for $95.75. Aggressive traders may want to aim for the $99-100 zone instead. I am not suggesting new positions at this time.

- Suggested Positions -

Long DEC $95 call (ORLY1222L95) entry $1.90

chart:

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


Precision Castparts - PCP - close: 183.39 change: +0.28

Stop Loss: 176.90
Target(s): 188.00
Current Option Gain/Loss: +24.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/01/12: After a strong two-day rally shares of PCP quietly moved sideways on Friday. This is a new record closing high for the stock. If you're looking for an entry point readers may want to wait for a dip. The $180 level and the 10-dma should be short-term support.

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

chart:

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


Pharmacyclics Inc. - PCYC - close: 53.05 change: -1.05

Stop Loss: 49.65
Target(s): 56.50
Current Option Gain/Loss: - 38.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/01/12: I am starting to worry that the $55.00 level could be tougher resistance than previously expected. PCYC underperformed on Friday with a -1.9% decline. Technically Friday's decline has produced a bearish engulfing candlestick pattern on the daily chart.

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

chart:

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


Starbucks Corp. - SBUX - close: 51.87 change: +0.07

Stop Loss: 49.95
Target(s): 55.85
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
12/01/12: Traders did buy the dip in SBUX on Friday. That is encouraging but we are still waiting for a breakout past resistance. I am suggesting a trigger to buy calls at $52.50. We will aim for $55.85 since there was resistance near $56.00. More aggressive traders may want to aim for the $59-60 area instead.

Trigger @ 52.50

- Suggested Positions -

buy the 2013 Jan $55 call (SBUX1319a55)

chart:

Entry on November xx at $ xx.xx
Average Daily Volume = 8.1 million
Listed on November 29, 2012


Trimble Navigation - TRMB - close: 55.64 change: -0.04

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:
12/01/12: TRMB spent Friday's session churning sideways under resistance near $56.00. We are waiting for a bullish breakout higher.

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)

chart:

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


Whirlpool Corp. - WHR - close: 101.84 change: -0.68

Stop Loss: 99.40
Target(s): 108.50
Current Option Gain/Loss: -14.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/01/12: WHR saw another day of minor profit taking on Friday. If the market dips we might see this stock retest the $100.00-99.50 level again. Our stop remains at $99.40 for now. Readers may want to wait for another bounce off the $100 level before considering new bullish positions.

Our multi-week target is $108.50.

- Suggested *Small* Positions -

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

chart:

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: 65.41 change: -0.32

Stop Loss: 66.51
Target(s): 60.25
Current Option Gain/Loss: -39.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/01/12: As expected shares of HUM stalled at resistance near $66.00 and its 10-dma. I'm not sure I would call it a reversal yet. Readers may want to wait for a new drop under the $65.00 mark before launching new bearish positions.

- Suggested Positions -

Long DEC $65 PUT (HUM1222x65) entry $1.98

chart:

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


InterOil Corp. - IOC - close: 55.66 change: +0.53

Stop Loss: 60.15
Target(s): 50.50
Current Option Gain/Loss: - 5.5%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
12/01/12: IOC gapped open higher on Friday morning but traders initially sold the rally. Bulls were buying the dip at round-number support near $55.00. This might be a spot to look for an oversold bounce back toward the 10-dma. Check the chart below for ideas on adjusting your stop loss. 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

chart:

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


Sears Holding - SHLD - close: 42.01 change: -1.09

Stop Loss: 45.25
Target(s): 40.25
Current Option Gain/Loss: + 6.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/01/12: I was expecting the option spreads on our SHLD play to narrow as the option grew deeper in the money. Instead the option spreads have widened on us. That's cutting into any potential gains.

Now SHLD is down seven days in a row and it's looking oversold. The stock could see a bounce soon. I am adjusting our stop loss down to $45.25. I am not suggesting new positions.

- Suggested Positions -

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

12/01/12 new stop loss @ 45.25
11/28/12 triggered

chart:

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


CLOSED BULLISH PLAYS

Dillard's Inc. - DDS - close: 88.91 change: -0.14

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:
12/01/12: DDS saw an early morning rally that pushed it toward round-number resistance at $90.00. The stock hit our exit target at $89.75 before paring its gains.

- Suggested Positions -

Dec $90 call (DDS1222L90) entry $1.05 exit $1.75 (+66.6%)

11/30/12 target hit at $89.75
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

chart:

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


Netflix, Inc. - NFLX - close: 81.71 change: +0.33

Stop Loss: 79.90
Target(s): 89.75
Current Option Gain/Loss: - 58.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/01/12: NFLX has been going nowhere all week. On Thursday night we decided to exit positions on Friday morning at the open. Unfortunately, before the opening bell on Friday, there was news that NFLX will face new competition in Mexico with a new video-streaming service to be started by America Movil soon. This produced a gap down in NFLX at $80.50 and shares dipped to the 200-dma near $79.30 before bouncing. Our trade was closed on the opening gap down.

- Suggested Positions -

DEC $85 call (NFLX1222L85) Entry $4.60 exit $1.91 (-58.4%)

11/30/12 closed at the open this morning
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

chart:

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