Editor's Note:

The stock market's early Monday morning rally faded and most of the market closed in negative territory.

We did see HD hit our entry trigger.

Current Portfolio:


CALL Play Updates

Dover Corp - DOV - close: 63.06 change: -0.53

Stop Loss: 61.75
Target(s): 67.50
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/03/12: DOV tried to breakout past resistance near $64.00 but the early morning market rally faded. Shares of DOV pulled back to a -0.8% decline and closed under their 10-dma. The next level of support looks like $62.00. 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: 53.89 change: -1.57

Stop Loss: 53.80
Target(s): 59.50
Current Option Gain/Loss: - 58.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/03/12: Ouch! I could not find any news to explain the relative weakness in FMC today. I did hear generic comments about how basic materials and especially chemical stocks were underperforming today. FMC makes chemicals. The stock reversed at resistance near $56.00 and plunged past several moving averages including the 10, 20, 30, 50 and 100-dma. The low today was $53.83 and our stop is at $53.80. If there is any follow through tomorrow we'll see FMC hit our stop loss.

- Suggested *Small* Positions -

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

12/03/12 FMC is underperforming and poised to hit our stop loss

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


Home Depot - HD - close: 64.98 change: -0.09

Stop Loss: 62.90
Target(s): 69.50
Current Option Gain/Loss: - 8.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/03/12: HD spiked higher this morning and almost hit $66 before completely reversing and giving back all of its gains. Our trigger to buy calls was hit at $65.35. At this point, given the intraday reversal, readers may want to wait to buy a bounce off $64.00 or a new close over $65.25 as an alternative entry point.

- Suggested Positions -

Long 2013 Jan $65 call (HD1319a65) entry $1.95

Entry on December 03 at $65.35
Average Daily Volume = 8.5 million
Listed on December 01, 2012


O'Reilly Automotive - ORLY - close: 93.32 change: -0.76

Stop Loss: 89.95
Target(s): 95.75
Current Option Gain/Loss: -18.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/03/12: ORLY's early morning gains faded and shares posted a -0.8% loss. Look for a dip to $92.00. I am not suggesting new positions at this time.

- 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: 181.75 change: -1.64

Stop Loss: 176.90
Target(s): 188.00
Current Option Gain/Loss: -16.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/03/12: The rally in PCP failed at resistance near $185 and the stock produced a bearish engulfing candlestick reversal pattern today. I would expect a dip back toward likely support at $180 soon.

NOTE: PCP will begin trading ex-dividend on December 5th. It should be nothing to worry about. It looks like the dividend is only three cents.

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: 55.93 change: +2.88

Stop Loss: 51.45
Target(s): 56.50
Current Option Gain/Loss: - 13.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/03/12: PCYC displayed relative strength today with a +5.4% surge. Today's move is a bullish breakout past resistance near $55.00. Please note our new stop loss at $51.45. Our target is $56.50. More aggressive traders could aim for the $59-60 zone instead.

Honestly, the option spreads are too wide at the moment and we are unlikely to post any gains on this trade even if PCYC does hit our target at $56.50.

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.

- Suggested *Small* Positions -

long Dec $55 call (PCYC1222L55) entry $3.60

12/03/12 new stop loss @ 51.45
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


Starbucks Corp. - SBUX - close: 51.79 change: -0.08

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:
12/03/12: SBUX continues to churn sideways under resistance near $52.00 and near its 200-dma. 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)

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


Trimble Navigation - TRMB - close: 55.39 change: -0.25

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:
12/03/12: There is no change from my prior comments on TRMB. 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)

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


Whirlpool Corp. - WHR - close: 100.96 change: -0.88

Stop Loss: 99.40
Target(s): 108.50
Current Option Gain/Loss: -23.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/03/12: WHR is fading back toward support near $100 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

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: 65.06 change: -0.35

Stop Loss: 66.51
Target(s): 60.25
Current Option Gain/Loss: -36.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/03/12: HUM's rally past short-term resistance at its 10-dma and the $66 level failed. This can be used as a new bearish entry point or you could wait for a new drop under $64.85 (today's low).

- 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: 54.66 change: -1.00

Stop Loss: 60.15
Target(s): 50.50
Current Option Gain/Loss: +11.1%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
12/03/12: Monday was a relatively quiet day for IOC but the down trend continues. 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: 42.11 change: +0.10

Stop Loss: 44.05
Target(s): 40.25
Current Option Gain/Loss: + 9.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/03/12: Most of the market rallied this morning and then faded lower. SHLD didn't see a rally until midday but traders sold that rally as well. We are worried that SHLD is oversold and due for a bigger bounce. Readers may want to exit early now. I am lowering our stop loss to $44.05. I am not suggesting new positions.

- Suggested Positions -

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

12/03/12 new stop loss @ 44.05
12/01/12 new stop loss @ 45.25
11/28/12 triggered

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


Teradata Corp. - TDC - close: 58.52 change: -0.96

Stop Loss: 62.10
Target(s): 55.15
Current Option Gain/Loss: +25.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/03/12: TDC produced a failed rally at resistance near $60.00 (the high was 60.34) and shares reversed to a -1.6% decline. I would still consider new positions now.

Our target is $55.15. More aggressive traders could aim a lot lower. The Point & Figure chart for TDC is bearish with a $44 target.

- Suggested Positions -

Long 2013 Jan $55 PUT (TDC1319m55) entry $0.86

Entry on December 03 at $60.00
Average Daily Volume = 2.2 million
Listed on December 01, 2012