Editor's Note:

The market's bounce continued on Friday and the S&P 500 index is now back above the simple 50-dma.

DLR has been stopped out. HBI has been removed.


Current Portfolio:


CALL Play Updates

Alliant Techsystems - ATK - close: 100.62 change: +0.59

Stop Loss: 97.90
Target(s): 108.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 9 weeks
New Positions: Yes, see below

Comments:
08/24/13: ATK ended the week with a gain. The stock appears to be coiling for a bullish breakout higher. The intraday high on Friday was $101.08.

We are suggesting a trigger to buy calls at $101.25. If triggered our target is $108.00. The option spreads on ATK are a little bit wide therefore I am suggesting we use small positions to limit our risk.

Trigger @ 101.25 *small positions*

- Suggested Positions -

buy the Nov $105 call (ATK1316k105) current ask $3.20

chart:

Entry on August -- at $---.--
Average Daily Volume = 462 thousand
Listed on August 20, 2013


Buffalo Wild Wings Inc. - BWLD - close: 108.41 change: -1.14

Stop Loss: 106.25
Target(s): 118.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
08/24/13: BWLD underperformed on Friday. I couldn't find any headlines to explain the sudden drop to $107.00 on Friday morning. Traders did buy the dip and BWLD still looks poised for a breakout past resistance near $110.00. I am raising the suggested stop loss to $106.75.

We are suggesting a trigger to buy calls at $110.25. If triggered our target is $118.50. The Point & Figure chart for BWLD is bullish with a $121 target.

Trigger @ 110.25

- Suggested Positions -

buy the Oct $115 call (BWLD1319j115)

08/24/13 new stop loss @ 106.75

chart:

Entry on August -- at $---.--
Average Daily Volume = 425 thousand
Listed on August 22, 2013


Lumber Liquidators - LL - close: 99.53 change: -3.15

Stop Loss: 98.25
Target(s): 108.00
Current Option Gain/Loss: -27.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/24/13: Warning! LL produced a bearish engulfing candlestick reversal pattern on Friday. I could not find any news to explain the -3.0% sell-off. It's possible it was a reaction to the disappointing home sales number but LOW and HD didn't see a very big reaction. The low on Friday was $98.25. If there is any follow through lower we could see LL hit our stop at $98.25 soon.

Earlier Comments:
A breakout past the $100 level could spark some short covering. The most recent data listed short interest at 25% of the small 26.2 million share float.

Our target is $108.00. More conservative traders may want to exit near $105.00 instead.

- Suggested Positions -

Long Sep $105 call (LL1321i105) entry $2.20

08/24/13 warning! LL has produced a one-day bearish reversal pattern on Friday
08/22/13 new stop loss @ 98.25

chart:

Entry on August 21 at $100.25
Average Daily Volume = 611 thousand
Listed on August 20, 2013


Shire plc - SHPG - close: 113.59 change: -0.40

Stop Loss: 111.75
Target(s): 118.50
Current Option Gain/Loss: + 1.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/24/13: SHPG gapped down on Friday morning but the stock found support near $113 again. More conservative traders may want to raise their stops again. I am not suggesting new positions.

Earlier Comments:
The plan was to keep our position size small to limit risk.

*small positions* - Suggested Positions -

Long Sep $115 call (SHPG1321i115) entry $2.60

08/22/13 new stop loss @ 111.75
08/10/13 new stop loss @ 109.40

chart:

Entry on August 02 at $111.50
Average Daily Volume = 347 thousand
Listed on August 01, 2013


SINA Corp. - SINA - close: 82.19 change: +0.66

Stop Loss: 78.60
Target(s): 89.00
Current Option Gain/Loss: - 7.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/24/13: SINA managed a +0.8% gain on Friday but most of the move was sideways. Nimble traders might want to consider buying dips in the $81-80 zone. We are raising our stop loss up to $78.60.

- Suggested Positions -

Long Sep $85 call (SINA1321i85) entry $2.75

08/24/13 new stop loss @ 78.60
08/21/13 adjust stop loss from $77.70 to $77.49

chart:

Entry on August 19 at $81.35
Average Daily Volume = 2.9 million
Listed on August 17, 2013


PUT Play Updates

Apache Corp. - APA - close: 79.80 change: +0.81

Stop Loss: 80.55
Target(s): 71.00
Current Option Gain/Loss: -21.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/24/13: The combination of a bounce in oil prices, a widespread bounce in stocks, and what appears to be a slowdown for violence in Egypt has helped shares of APA produce a dramatic bounce over the last four days.

APA has recovered almost $5.00 of its $8.50 decline from its mid August highs. Friday's close above its simple 200-dma is technically bearish. Yet at the same time APA still has round-number, price resistance at the $80.00 mark.

More conservative traders may want to abandon ship immediately. I am suggesting we hold on and see if APA actually rallies through resistance at $80.00. Currently our stop loss is at $80.55.

- Suggested Positions -

Long Oct $75 PUT (APA1319v75) entry $1.60

08/24/13 More conservative traders may want to exit given the dramatic reversal higher in APA these last four days.
08/19/13 trade opened on gap down at $78.42. Trigger was $78.75

chart:

Entry on August 19 at $78.42
Average Daily Volume = 2.6 million
Listed on August 17, 2013


Boeing Company - BA - close: 105.48 change: +0.34

Stop Loss: 105.55
Target(s): 100.25
Current Option Gain/Loss: -60.0%
Time Frame: 1 to 2 weeks
New Positions: see below

Comments:
08/24/13: BA garnered some bullish analyst comments on Friday but shares underperformed the market with a +0.3% gain. The stock essentially churned sideways on Friday but BA is on the verge of breaking out past its bearish short-term trend of lower highs. Thus more conservative traders may want to exit early right now. I am not suggesting new positions. The high on Friday was $105.50. Our stop is at $105.55. (BA has stopped at $105.50 two days in a row).

- Suggested Positions -

Long Sep $100 PUT (BA1321u100) entry $1.75

08/24/13 BA looks like it's about to move higher. Readers may want to exit bearish positions now.
08/15/13 trade opened on gap down at $103.19. Trigger was $103.75

chart:

Entry on August 15 at $103.19
Average Daily Volume = 4.6 million
Listed on August 14, 2013


eBay Inc. - EBAY - close: 51.65 change: +0.57

Stop Loss: 52.05
Target(s): 45.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
08/24/13: It was a down week for EBAY but shares did follow the market higher on Friday with a +1.1% bounce. Overall EBAY still looks poised to move lower and we're waiting for a breakdown.

Earlier Comments:
EBAY is nearing major support near $50.00. I am suggesting a trigger to buy puts at $49.90. More conservative traders may want to wait for a drop below the March 2013 low of $49.55 before initiating new put positions. If we are triggered at $49.90 our first target is $45.50.

Trigger @ 49.90

- Suggested Positions -

buy the Sep $50 PUT (EBAY1321u50)

- or -

buy the Oct $45 PUT (EBAY1319v45)

chart:

Entry on August -- at $---.--
Average Daily Volume = 8.6 million
Listed on August 21, 2013


iShares Russell 2000 ETF - IWM - close: 103.17 change: +0.26

Stop Loss: 105.25
Target(s): 98.50
Current Option Gain/Loss: -39.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/24/13: Small caps produced a decent oversold bounce over the last four days. The IWM has delivered a 50% retracement of its decline from the early August high. The rebound could stall here or the ETF could try and fill the gap with a move to $104.00.

We still think the IWM will see new relative lows before September option expiration. Just in case the market gets volatile we're adjusting the stop loss higher to $105.25. More conservative traders may want to leave their stop at $104.25 or even tighten theirs lower instead.

I am not suggesting new bearish positions at this time.

- Suggested Positions -

Long Sep $100 PUT (IWM1321u100) Entry $1.48

08/24/13 new stop loss @ 105.25
08/19/13 new stop loss @ 104.25
08/15/13 adjust exit target from $97.00 to $98.50
08/03/13 readers may want to consider an early exit

chart:

Entry on July 30 at $103.69
Average Daily Volume = 31 million
Listed on July 29, 2013


ManpowerGroup Inc. - MAN - close: 67.01 change: -0.07

Stop Loss: 67.05
Target(s): 61.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
08/24/13: MAN underperformed the market on Friday. Shares tried to bounce but failed near the 10 and 20-dma. If MAN does not see some follow through lower soon we'll drop it. Currently we're on the sidelines waiting for a new relative low.

We are suggesting a trigger to buy puts at $65.75. There is arguably potential short-term support at $65.00 but we are aiming for a drop to $61.00.

Trigger @ 65.75

- Suggested Positions -

buy the Sep $65 PUT (MAN1321u65)

chart:

Entry on August -- at $---.--
Average Daily Volume = 530 thousand
Listed on August 21, 2013


Time Warner Cable - TWC - close: 108.73 change: -0.23

Stop Loss: 111.60
Target(s): 105.00
Current Option Gain/Loss: -23.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/24/13: We need to be careful with our TWC trade. The stock's downward momentum is slowing. You could argue that TWC produced a very short-term bullish double bottom with the intraday lows on Wednesday and Friday. The $110 level should be overhead resistance but a normal retracement of the recent sell-off could mean a bounce back to the $111-112 zone. I am not suggesting new positions.

Earlier Comments:
We do want to keep our position size small. There is potential support at $108.00. The next level of support is $104.00. If we are triggered at $109.50, our target is $105.00.

- Suggested Positions -

Long Sep $105 PUT (TWC1321u105) entry $2.35

chart:

Entry on August 16 at $109.50
Average Daily Volume = 2.3 million
Listed on August 15, 2013



Longer-Term Play Updates



Chicago Bridge & Iron - CBI - close: 61.37 change: +0.12

Stop Loss: 55.75
Target(s): 74.50
Current Option Gain/Loss: - 7.8%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
08/24/13: Without Friday's advance CBI would not have managed a gain for the week. The stock has been consolidating sideways in a neutral pattern of lower highs and higher lows for the last three months. As the consolidation narrows a breakout one way or the other becomes more imminent. Investors might want to consider buying calls when CBI closes above the trend line of lower highs (see chart).

*Small Positions* - Suggested Positions -

Long 2014 Jan $65 call (CBI1418A65) entry $2.55

07/20/13 new stop loss @ 55.75
06/29/13 CBI might be poised to dip into the $57-55 zone again.
06/24/13 triggered @ 56.75
06/22/13 adjust entry trigger to $56.75
06/15/13 entry strategy change: change the breakout trigger at $65.25 to a buy-the-dip trigger at $56.50. Adjust the stop loss to $53.75.
Adjust the option strike to the 2014 Jan. $65 call

chart:

Entry on June 24 at $56.75
Average Daily Volume = 1.8 million
Listed on June 01, 2013


Vanguard FTSE Europe ETF - VGK - close: 53.17 change: +0.27

Stop Loss: 51.25
Target(s): 58.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to 2013 December option expiration
New Positions: Yes, see below

Comments:
08/24/13: Investor sentiment remains bullish for a rebound in Europe and the VGK has bounced off its Wednesday lows. The stock is once again trading near 52-week highs.

NOTE: I am adjusting our option strike from the 2013 December $55s to the 2014 March $55s.

Earlier Comments:
We are taking a multi-month time frame with this trade. I am suggesting we wait for the VGK to close above $53.50 and then buy calls the next morning. If we are triggered our target is $58.50 but we'll adjust it as the trade progresses.

FYI: The Point & Figure chart for VGK is bullish with a $63 target.

Trigger: Wait for a close above $53.50,
then buy calls the next morning.

- Suggested Positions -

Buy the 2014 Mar $55 call (VGK1422L55) current ask $2.00

08/24/13 adjust the option strike from 2013 Dec $55 to $2014 Mar $55.

chart:

Entry on August -- at $---.--
Average Daily Volume = 3.0 million
Listed on August 10, 2013


CLOSED BEARISH PLAYS

Digital Realty Trust - DLR - close: 53.30 change: +0.72

Stop Loss: 54.25
Target(s): 50.25
Current Option Gain/Loss: -42.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/24/13: A drop in ten-year treasury yields inspired some bargain hunters to buy the beaten down REIT names. The oversold bounce in DLR accelerated on Friday with a +2.6% gain. The stock hit our stop loss at $54.25 as it broke through resistance near $54.00.

- Suggested Positions -

Sep $50 PUT (DLR1321u50) entry $1.05 exit $0.60* (-42.8%)

08/23/13 stopped out
*option exit price is an estimate since the option did not trade at the time our play was closed.
08/19/13 new stop loss @ 54.25

chart:

Entry on August 14 at $53.75
Average Daily Volume = 1.8 million
Listed on August 13, 2013


Hanesbrands Inc. - HBI - close: 61.09 change: -0.03

Stop Loss: 60.60
Target(s): 55.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
08/24/13: HBI is not cooperating. Shares produced a big bounce on Wednesday and now HBI looks poised to break the bearish trend of lower highs. Our trade has not opened yet so we're removing HBI as a candidate.

Trade did not open.

08/24/13 removed from the newsletter, un-hit trigger was $58.95

chart:

Entry on August -- at $---.--
Average Daily Volume = 1.1 million
Listed on August 20, 2013