Editor's Note:

Yesterday's intraday reversal saw some follow through with a mostly mild but widespread pullback today.

NBL was stopped out. We want to exit our ORLY trade tomorrow.

Current Portfolio:


CALL Play Updates

Abercombie & Fitch - ANF - close: 46.90 change: +0.64

Stop Loss: 44.49
Target(s): 49.85
Current Option Gain/Loss: -27.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/13/12: ANF managed a bounce on Thursday with a +1.3% gain. That was enough to outperform most of the market. Seeing the 10-dma hold as technical support is a good sign for the bulls.

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: 79.84 change: -1.35

Stop Loss: 77.95
Target(s): 84.50 & 87.50
Current Option Gain/Loss: - 34.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/13/12: Biotech stocks as a group underperformed the major indices. Yet CELG underperformed its peers thanks to lackluster analyst comments. Shares gave up -1.6% and the close under $80.00 is bearish but it's not a convincing breakdown of support just yet. Our stop loss remains at $77.95 but more conservative traders may want to raise their stop.

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: 64.09 change: -0.08

Stop Loss: 62.75
Target(s): 67.50
Current Option Gain/Loss: +14.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/13/12: DOV continues to consolidate sideways while maintaining the trend of higher lows. 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: 81.00 change: -0.74

Stop Loss: 78.40
Target(s): 84.50
Current Option Gain/Loss: -16.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/13/12: Technically today's decline confirms yesterday's bearish reversal candlestick pattern. Yet the $80.00 level should be support. I would wait for a bounce off $80.00 before considering new positions.

- 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: 142.30 change: +0.43

Stop Loss: 138.90
Target(s): 148.50
Current Option Gain/Loss: -12.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/13/12: Traders bought the dip at short-term support on the 10-dma and FLS bounced to a +0.3% gain. The trend remains higher but 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: -31.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/13/12: I cautioned readers to expect another pullback today. Technically today's decline confirms yesterday's bearish reversal candlestick. Yet traders bought the dip in the IWM near $82 and its 10-dma. I wouldn't give up just yet but more conservative traders could move their stop loss closer to the $82 level.

- 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: 111.99 change: -0.65

Stop Loss: 107.45
Target(s): 117.50
Current Option Gain/Loss: + 3.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/13/12: LNKD saw a mild pullback today. I would still expect a dip toward $110, which should be new support. 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: 74.77 change: +0.52

Stop Loss: 71.70
Target(s): 79.00
Current Option Gain/Loss: + 4.5%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
12/13/12: LULU bounced off the $74 level this morning and shares drifted sideways the rest of the session to close up with +0.7% gain. The relative strength today is encouraging. I would still be tempted to buy calls at current levels.

Earlier Comments:
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: 90.79 change: -2.03

Stop Loss: 89.95
Target(s): 95.75
Current Option Gain/Loss: -86.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/13/12: ORLY clearly does not want to cooperate with us. The bounce from support near $90 quickly reversed at resistance near $95.00. Shares continued to retreat today with a -2.1% decline. The stock is once again testing support near its 200-dma and the $90 level.

We want to abandon ship. I am suggesting an early exit at the open tomorrow morning.

- Suggested Positions -

Long DEC $95 call (ORLY1222L95) entry $1.90

12/13/12 prepare to exit at the open tomorrow!

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


Precision Castparts - PCP - close: 183.04 change: -1.47

Stop Loss: 179.75
Target(s): 188.00
Current Option Gain/Loss: -40.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/13/12: Warning! We only have six trading days left on our December $185 PCP calls and the stock just broke short-term technical support at the 10-dma today. 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: 82.01 change: -0.09

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:
12/13/12: Thursday proved to be a very quiet day for ROK with the stock closing almost unchanged on the session. If ROK sees 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: 57.52 change: +0.13

Stop Loss: 60.05
Target(s): 52.50
Current Option Gain/Loss: - 4.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/13/12: Shares of TIF bounced and failed at the $58.00 resistance level for the third time in three days. More conservative traders might want to lower their stops.

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

Noble Energy - NBL - close: 99.30 change: -2.52

Stop Loss: 99.95
Target(s): 104.85
Current Option Gain/Loss: - 25.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/13/12: Energy stocks were some of the market's worst performers today. That didn't bode well for our NBL trade. Shares gapped open lower at $101.44 and plunged to a -2.4% decline. The stock broke down under what should have been round-number support at the $100.00 mark. Our stop loss was hit at $99.95. The plan was to keep our position size small to limit our risk.

- *Small Positions*

2013 Jan $105 call (NBL1319a105) entry $1.60 exit $1.20 (-25.0%)

12/13/12 trade opened on gap down at $101.44, stopped out at $99.95

Annotated Chart:

Entry on December xx at $ xx.xx
Average Daily Volume = 1.2 million
Listed on December 12, 2012