Editor's Note:

The market's rally is showing signs of weakness. We're starting to see some stocks start to roll over.

INGR, IOC, and RRC were all stopped out. TRMB and TDC were closed. LULU was triggered.

Current Portfolio:


CALL Play Updates

Abercombie & Fitch - ANF - close: 46.26 change: -0.99

Stop Loss: 44.49
Target(s): 49.85
Current Option Gain/Loss: -39.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/12/12: The stock market gave back its intraday gains. Sellers were quick to hit ANF this morning and the stock underperformed the market with a -2.0% decline. Shares are now testing short-term support at the rising 10-dma. A new decline from here will see ANF testing the $45.00 level.

Our short-term target is $49.85 since the $50.00 mark could be resistance. More aggressive traders may want to aim for the $53-55 zone instead.

- Suggested Positions -

Long 2013 Jan $50 call (ANF1319a50) entry $1.58

Entry on December 10 at $47.48
Average Daily Volume = 5.4 million
Listed on December 08, 2012


Celgene Corp. - CELG - close: 81.19 change: -0.89

Stop Loss: 77.95
Target(s): 84.50 & 87.50
Current Option Gain/Loss: - 8.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/12/12: After hitting new highs yesterday CELG hit some profit taking today. The stock gave back -1.0%. Look for support at broken resistance near $80.00.

Please note that I am setting two targets. We'll take money off the table at $84.50 and our final target will be $87.50.

- Suggested Positions -

Long 2013 Jan $82.50 call (CELG1319a82.5) entry $2.03

Entry on December 11 at $81.46
Average Daily Volume = 3.0 million
Listed on December 10, 2012


Dover Corp - DOV - close: 64.17 change: +0.28

Stop Loss: 62.75
Target(s): 67.50
Current Option Gain/Loss: +16.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/12/12: DOV rallied most of the session only to pared its gains by the closing bell. Yet the stock still managed a gain (+0.4%). I am not suggesting new positions at this time.

- Suggested Positions -

Long 2013 Mar $65 call (DOV1316c65) entry $2.10

12/11/12 new stop loss @ 62.75
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


Energizer Holdings - ENR - close: 81.74 change: -1.00

Stop Loss: 78.40
Target(s): 84.50
Current Option Gain/Loss: +11.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/12/12: ENR reaffirmed its prior guidance today. Yet that news failed to stop shares from seeing some profit taking. Today's -1.2% pullback has actually created a bearish engulfing candlestick reversal pattern. I would look for a dip back toward $80 or the 10-dma.

- Suggested Positions -

Long 2013 Jan $85 call (ENR1319a85) entry $0.90

Entry on December 07 at $80.76
Average Daily Volume = 784 thousand
Listed on December 06, 2012


Flowserve Corp. - FLS - close: 141.87 change: -1.05

Stop Loss: 138.90
Target(s): 148.50
Current Option Gain/Loss: -16.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/12/12: It was a down day for FLS with shares losing -0.7%. The stock tried to hold the $142 level but eventually failed. Now it looks like FLS could retest the $140 level as support soon. I am not suggesting new positions at current levels. 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


iShares Russell 2000 - IWM - close: 82.94 change: -0.47

Stop Loss: 81.20
Target(s): 86.00
Current Option Gain/Loss: -13.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/12/12: I am urging caution here. A little profit taking is normal but today's pullback in the IWM has created a bearish engulfing candlestick reversal pattern. Normally these patterns need to see confirmation. I would still expect to see some short-term support near $82.50.

- Suggested Positions -

buy the 2013 Jan $84 call (IWM1319a84) current ask $1.17

12/11/12 triggered on the gap open higher at $83.11 (trigger was 82.85)

Entry on December 11 at $83.11
Average Daily Volume = 38 million
Listed on December 10, 2012


Linkedin Corp. - LNKD - close: 112.64 change: -0.81

Stop Loss: 107.45
Target(s): 117.50
Current Option Gain/Loss: +16.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/12/12: LNKD rallied right up to potential round-number resistance at $115.00 and rolled over. The next level of support is likely $110.00. Readers may want to start raising their stop losses.

If triggered our target is $117.50. More conservative traders may want to exit in the $114-115 zone instead since $115 might be resistance. LNKD can be volatile so I would use small positions to limit our risk.

*Small Positions* - Suggested Positions -

Long Jan $115 call (LNKD1319a115) Entry $3.10

Entry on December 10 at $110.25
Average Daily Volume = 1.8 million
Listed on December 08, 2012


Lululemon Athletica - LULU - close: 74.25 change: +0.47

Stop Loss: 71.70
Target(s): 79.00
Current Option Gain/Loss: - 1.5%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
12/12/12: Our new LULU trade has been triggered. Unfortunately shares gave back a good portion of their gains today. I would still be tempted to buy a bounce from current levels.

LULU could see a short squeeze that lifts it toward $80.00. The most recent data listed short interest at 20% of the 101 million share float.

FYI: The Point & Figure chart for LULU is bullish with an $88 target.

- Suggested Positions -

Long 2013 Jan $75 call (LULU1319a75) entry $3.30

Entry on December 12 at $74.25
Average Daily Volume = 2.1 million
Listed on December 11, 2012


O'Reilly Automotive - ORLY - close: 92.82 change: +0.93

Stop Loss: 89.95
Target(s): 95.75
Current Option Gain/Loss: -63.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/12/12: ORLY displayed relative strength today but I remain worried. The stock shot higher only to fail at resistance near $95.00. Readers may want to exit early now or raise their stops closer to the $91.50 area. We have less than two weeks left on our December calls. 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: 184.51 change: -0.14

Stop Loss: 179.75
Target(s): 188.00
Current Option Gain/Loss: - 2.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/12/12: PCP continues to tease us. Shares rallied past resistance at $185.00 again today and once again the stock gave back all of its gains. These failed rallies do not breed any confidence. Readers may want to raise their stop loss. 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: 82.10 change: +0.81

Stop Loss: 78.90
Target(s): 84.75
Current Option Gain/Loss: + 5.0%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
12/12/12: ROK is extending its gains with a +0.99% advance today. The stock is up four days in a row. Should ROK see any profit taking the $80 level should offer some support.

- Suggested Positions -

Long 2013 Jan $85 call (ROK1319a85) entry $1.00*

*option entry price is an estimate since the option did not trade at the time our play was closed.

Entry on December 10 at $80.60
Average Daily Volume = 1.0 million
Listed on December 05, 2012


PUT Play Updates

Tiffany & Co - TIF - close: 57.39 change: -0.46

Stop Loss: 60.05
Target(s): 52.50
Current Option Gain/Loss: + 1.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/12/12: Good news! TIF tried to bounce again this morning and failed at resistance near $58.00 again. The path of least resistance still appears to be down.

Our target is $52.50. Although I want to caution you that the $55.00 level is potential support. The Point & Figure chart for TIF is bearish with a $51 target.

- Suggested Positions -

long Jan $55 PUT (TIF1319m55) entry $1.15

Entry on December 10 at $57.75
Average Daily Volume = 2.3 million
Listed on December 08, 2012


CLOSED BULLISH PLAYS

Ingredion Inc. - INGR - close: 64.23 change: -0.47

Stop Loss: 64.40
Target(s): 69.00
Current Option Gain/Loss: -47.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/12/12: INGR started the day on a weak note and quickly hit our stop loss at $64.40 within the first few minutes of trading.

- Suggested Positions -

2013 Jan $65 call (INGR1319a65) entry $2.00 exit $1.05 (-47.5%)

12/12/12 stopped out at $64.40
12/10/12 new stop loss @ 64.40
12/08/12 new stop loss @ 63.90

chart:

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


Trimble Navigation - TRMB - close: 58.72 change: -0.82

Stop Loss: 55.90
Target(s): 59.75
Current Option Gain/Loss: +100.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/12/12: TRMB finally hit some profit taking. The stock also hit our exit target at $59.75. We had already decided to close positions at the open this morning. It was luck that saw TRMB gap open higher at $59.83, which was above our exit target. Sadly, the option actually opened lower at $3.15 when I would have expected it to open closer to $3.50. It closed with an ask of $3.30 yesterday. Thus our exit (bid) was $2.60 (+100.0%)

- Suggested Positions -

2013 Jan $57.50 call (TRMB1319a57.5) entry $1.30 exit $2.60 (+100.0%)

12/12/12 closed at the open this morning on gap higher @ 59.83
12/11/12 prepare to exit at the open tomorrow
12/10/12 new stop loss @ 55.90

chart:

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


CLOSED BEARISH PLAYS

InterOil Corp. - IOC - close: 56.27 change: +2.50

Stop Loss: 55.15
Target(s): 50.50
Current Option Gain/Loss: -35.1%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
12/12/12: IOC was definitely not cooperating today. I cautioned readers yesterday that IOC's bounce was looking too strong. Shares opened at $54.11 and rallied past resistance near $55.00. Our stop loss was hit at $55.15.

Earlier Comments:
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 -

DEC $55 PUT (IOC1222x55) entry $2.70 exit $1.75 (-35.1%)

12/12/12 stopped out at $55.15
12/08/12 new stop loss @ 55.15
12/06/12 new stop loss @ 56.05
12/04/12 new stop loss @ 57.55
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


Range Resources - RRC - close: 65.84 change: +1.17

Stop Loss: 65.30
Target(s): 56.50
Current Option Gain/Loss: -54.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/12/12: RRC displayed relative strength with a +1.8% gain. The stock broke out past resistance near $65.00 and quickly hit our stop loss at $65.30.

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 -

2013 Jan $60 PUT (RRC1319m60) entry $1.20* exit $0.55 (-54.1%)

12/12/12 stopped out at $65.30
12/11/12 new stop loss @ 65.30
*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.

chart:

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


Teradata Corp. - TDC - close: 61.19 change: +0.25

Stop Loss: 62.10
Target(s): 55.15
Current Option Gain/Loss: -36.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/12/12: After yesterday's unexpected breakout above the $60.00 level in TDC we decided to exit early. The plan was to close positions at the open this morning. TDC gapped open higher at $61.36.

- Suggested Positions -

2013 Jan $55 PUT (TDC1319m55) entry $0.86 exit $0.55 (-36.0%)

12/12/12 closed at the open this morning
12/11/12 prepare to exit at the open tomorrow

chart:

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