Editor's Note:

Thursday was rather quiet on Wall Street but we saw two trades hit our exit targets (PCYC and SHLD).

Our TRMB trade has been triggered.

Current Portfolio:


CALL Play Updates

Dover Corp - DOV - close: 63.43 change: -0.07

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:
12/06/12: DOV continues to churn sideways. The stock seems stuck in the $62-64 zone. 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


Flowserve Corp. - FLS - close: 141.39 change: +0.18

Stop Loss: 138.90
Target(s): 148.50
Current Option Gain/Loss: -11.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/06/12: FLS also spent Thursday's session drifting sideways. I would still consider new positions now or you could wait for a rally past $142.00. FYI: The Point & Figure chart for FLS is bullish with a $153 target.

- Suggested Positions -

Long 2013 Jan $145 call (FLS1319a145) Entry $2.70

Entry on December 05 at $141.50
Average Daily Volume = 518 thousand
Listed on December 04, 2012


Home Depot - HD - close: 64.34 change: +0.32

Stop Loss: 62.90
Target(s): 69.50
Current Option Gain/Loss: -28.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/06/12: HD had been acting weak the last couple of days but shares bounced today. I remain cautious on this stock. Readers may want to wait for a new rally past $65.00 before considering new positions.

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: 65.74 change: -0.20

Stop Loss: 63.25
Target(s): 69.00
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/06/12: INGR saw a tiny bit of profit taking today. There is no change from my prior comments. Readers may want to wait for a dip or a bounce near $65.00 as our next entry point.

- 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: 90.68 change: -0.70

Stop Loss: 89.95
Target(s): 95.75
Current Option Gain/Loss: -73.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/06/12: ORLY is getting worse. The stock is down four days in a row. First it broke down below its 10-dma and now its 20-dma. The next level of support should be $90 and its 200-dma. 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: 182.95 change: -1.14

Stop Loss: 179.75
Target(s): 188.00
Current Option Gain/Loss: - 5.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/06/12: PCP is struggling to see any follow through. Shares are just churning sideways between $180 and $185. I am not suggesting new positions at this time.

- Suggested *Small* Positions -

Long DEC $185 call (PCP1222L185) Entry $1.85

12/05/12 new stop loss @ 179.75

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


Rockwell Automation - ROK - close: 80.11 change: -0.28

Stop Loss: 78.90
Target(s): 84.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: Yes, see below

Comments:
12/06/12: ROK came close but didn't quite hit our entry trigger at $80.60 this morning. Shares look poised to try again tomorrow.

I am suggesting a trigger to buy calls at $80.60 with a stop loss at $78.90. Our target is $84.75.

Trigger @ 80.60

- Suggested Positions -

buy the 2013 Jan $85 call (ROK1319a85)

Entry on December xx at $ xx.xx
Average Daily Volume = 1.0 million
Listed on December 05, 2012


Trimble Navigation - TRMB - close: 56.73 change: +0.66

Stop Loss: 53.40
Target(s): 59.75
Current Option Gain/Loss: + 7.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/06/12: The rally in TRMB continues and the stock has broken out past resistance to hit new all-time highs. Our trigger to buy calls was hit at $56.15.

- Suggested Positions -

Long 2013 Jan $57.50 call (TRMB1319a57.5) entry $1.30

Entry on November 06 at $56.15
Average Daily Volume = 708 thousand
Listed on November 28, 2012


PUT Play Updates

Humana Inc. - HUM - close: 65.19 change: +0.13

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:
12/06/12: HUM is still churning sideways between $64 and $66. Readers may want to wait for a new low under $64.00 before launching 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: 51.47 change: -2.88

Stop Loss: 56.05
Target(s): 50.50
Current Option Gain/Loss: +75.9%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
12/06/12: Great news! There was no follow through on yesterday's bounce in IOC. Quite the opposite happened. The stock reversed sharply and posted a -5.2% decline today. I am lowering our stop loss to $56.05. Our option is up +75%. Readers may want to take 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

12/06/12 new stop loss @ 56.05
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


Range Resources - RRC - close: 64.58 change: -0.03

Stop Loss: 66.05
Target(s): 56.50
Current Option Gain/Loss: -16.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/06/12: Thursday was a quiet session for RRC. The stock churned sideways between $65 and $64. Yesterday I suggested wait for a drop under $65.00 before launching new positions. I meant to say $64.00.

Earlier Comments:
I do consider this an aggressive, higher-risk trade. RRC can be volatile and there has been takeover chatter in the past. We want to keep our position size small to limit our risk.

- Suggested *Small* Positions -

buy the 2013 Jan $60 PUT (RRC1319m60) entry $1.20*

*option entry price is an estimate since the option did not trade at the time our play was closed. The first trade on Dec. 5th was at $1.00.

Entry on December 05 at $63.72
Average Daily Volume = 1.5 million
Listed on December 04, 2012


Teradata Corp. - TDC - close: 58.70 change: +0.76

Stop Loss: 62.10
Target(s): 55.15
Current Option Gain/Loss: +27.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/06/12: I cautioned readers that yesterday looked like a potential bullish reversal. The bounce continued today and TDC added +1.3%. Yet the stock remains under what should be short-term resistance near $60.00. I am not suggesting new positions at this time.

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

Pharmacyclics Inc. - PCYC - close: 55.01 change: +1.42

Stop Loss: 51.45
Target(s): 56.50
Current Option Gain/Loss: - 16.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/06/12: After a two-day decline PCYC bounced and the stock hit our exit target at $56.50. The rally ran out of steam at $57.00.

Unfortunately the bid/ask spread on PCYC's December $55 call is too wide and it got worse today. Even though PCYC hit our bullish target the option did not post a profit for us.

Earlier Comments:
I do consider this a more aggressive, higher-risk trade.

- Suggested *Small* Positions -

Dec $55 call (PCYC1222L55) entry $3.60 exit $3.00 (-16.6%)

12/06/12 target hit @ $56.50
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

chart:

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


CLOSED BEARISH PLAYS

Sears Holding - SHLD - close: 40.25 change: -0.96

Stop Loss: 44.05
Target(s): 40.25
Current Option Gain/Loss: +39.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/06/12: Target achieved.

SHLD continues to underperform. The stock spiked down to $39.20 intraday. Our exit target was $40.25. We are somewhat fortunate that the option spreads improved for us. Yesterday they were outrageously too wide. They remain wide but the spreads did narrow and we managed a gain on the trade.

- Suggested Positions -

2013 Jan $45 PUT (SHLD1319m45) entry $2.15 exit $3.00 (+39.5%)

12/06/12 target hit at $40.25
12/03/12 new stop loss @ 44.05
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