Editor's Note:

Stocks recovered from their morning lows with a midday rebound but results were mixed. Small caps outperformed their large cap rivals.

FMC was stopped out. INGR has been triggered.

Current Portfolio:


CALL Play Updates

Dover Corp - DOV - close: 63.39 change: +0.33

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:
12/04/12: Tuesday proved to be a quiet day for shares of DOV. The stock churned sideways but eventually closed with a +0.5% gain. 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


Home Depot - HD - close: 64.24 change: -0.74

Stop Loss: 62.90
Target(s): 69.50
Current Option Gain/Loss: -27.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/04/12: Things are not looking well for our HD trade. The stock hit our entry point on a breakout above resistance near $65.00 yesterday but reversed. Today's decline looks like a confirmation of this short-term bearish reversal. Odds are good we could see HD pull back toward support near $62.00 and its 40 or 50-dma.

More conservative traders may want to raise their stops to limit their risk further. More aggressive traders might want to adjust their stops so it's under $62.00. I am not suggesting new positions at this time.

- 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


Ingredion Inc. - INGR - close: 65.43 change: +0.47

Stop Loss: 63.25
Target(s): 69.00
Current Option Gain/Loss: - 7.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/04/12: INGR displayed relative strength with a +0.7% gain today. Our trigger to open bullish positions was hit at $65.25. Our target is $69.00.

- Suggested Positions -

Long 2013 Jan $65 call (INGR1319a65) entry $2.00

Entry on December 04 at $65.25
Average Daily Volume = 504 thousand
Listed on December 03, 2012


O'Reilly Automotive - ORLY - close: 92.90 change: -0.42

Stop Loss: 89.95
Target(s): 95.75
Current Option Gain/Loss: -28.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/04/12: Traders bought the dip in ORLY near its rising 10-dma and the $92.00 level. The trend is still up for now although yesterday's session looks somewhat ominous. 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: +0.00

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:
12/04/12: PCP's Tuesday morning gains faded and the stock closed unchanged on the session. I am still expecting a dip toward $180.00.

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: 54.55 change: -1.38

Stop Loss: 51.45
Target(s): 56.50
Current Option Gain/Loss: - 26.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/04/12: Traders sold the rally in PCYC this morning and the stock is back under resistance at the $55.00 level. I would not be surprised to see a pullback toward $53.00.

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: 51.12 change: -0.67

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:
12/04/12: SBUX is back under its 200-dma with a -1.2% decline today.

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: 54.92 change: -0.47

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:
12/04/12: TRMB failed at resistance near $56.00 again this morning. 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: 100.42 change: -0.54

Stop Loss: 99.40
Target(s): 108.50
Current Option Gain/Loss: -30.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/04/12: I have been cautioning readers to expect WHR to retest the $100 level. Shares did so today. If there is any follow through lower the stock will likely hit our stop loss at $99.40. More aggressive traders may want to adjust their stop lower and give WHR more room to maneuver since the bottom of its bullish channel is near the 30-dma (near $97.50).

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: 65.14 change: +0.08

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:
12/04/12: Twice shares of HUM tried to rally today. Both time the rally ran out of steam near technical resistance at its 10-dma. Readers may want to wait for a new drop under $65.00 before initiating new positions.

- 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: 52.50 change: -2.16

Stop Loss: 57.55
Target(s): 50.50
Current Option Gain/Loss: +55.5%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
12/04/12: IOC underperformed the market with a -3.9% decline today. These are new multi-month lows. I am adjusting our stop loss down to $57.55. More conservative traders may want to start taking profits now. 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

12/04/12 new stop loss @ 57.55
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: 42.88 change: +0.77

Stop Loss: 44.05
Target(s): 40.25
Current Option Gain/Loss: -13.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/04/12: Hmm... that's two days in a row that traders bought SHLD in the $41.30-41.00 range. The stock remains below $44.00 for now but if there is any follow through on this bounce tomorrow we could see SHLD hit our stop loss at $44.05. Readers may want to exit early.

Sadly, the option spreads on our January puts has widened to a ridiculous spread. 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: 58.10 change: -0.42

Stop Loss: 62.10
Target(s): 55.15
Current Option Gain/Loss: +39.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/04/12: TDC is ticking down to another new relative low. Readers could start inching down their stop losses.

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


CLOSED BULLISH PLAYS

FMC Corp - FMC - close: 53.86 change: -0.03

Stop Loss: 53.80
Target(s): 59.50
Current Option Gain/Loss: - 64.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/04/12: As expected shares of FMC continued to show weakness following Monday's unexpected plunge. The stock hit our stop loss at $53.80.

- Suggested *Small* Positions -

2013 Jan $57.50 call (FMC1319a57.5) entry $0.85 exit $0.30 (-64.7%)

12/04/12 stopped out
12/03/12 FMC is underperforming and poised to hit our stop loss

chart:

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