Editor's Note:

The S&P 500 posted its first decline for the month of September as stocks deliver a relatively mild but widespread pullback.

FLR and NOC were triggered.


Current Portfolio:


CALL Play Updates

Alnylam Pharmaceuticals - ALNY - close: 55.52 change: -0.44

Stop Loss: 53.20
Target(s): sell half at $60.0 and half at $64.00
Current Option Gain/Loss: -26.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/12/13: ALNY tried to rally this morning but ran out of steam before it hit $58.00. Shares gave back all of its intraday gains to settle lower -0.7%. ALNY should still see short-term support at the 10-dma near $54.80-55.00 but a breakdown under the 10-dma could spell trouble. More conservative traders may want to raise their stop loss.

Earlier Comments:
We want to keep our position size small to limit our risk. I am suggesting we sell half of our position at $60.00 and then we'll aim for $64.00 with the other half.

*small positions* - Suggested Positions -

Long Oct $60 call (ALNY1319j60) entry $2.45

Entry on September 09 at $56.50
Average Daily Volume = 464 thousand
Listed on September 07, 2013


Anadarko Petroleum - APC - close: 95.53 change: +0.86

Stop Loss: 91.65
Target(s): 99.50
Current Option Gain/Loss: +13.1%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
09/12/13: APC displayed relative strength (+0.9%) and ignored the market's widespread decline. Traders may want to start adjusting their stop loss higher.

- Suggested Positions -

Long Oct $95 call (APC1319j95) entry $3.05*

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

Entry on September 11 at $94.25
Average Daily Volume = 2.55 million
Listed on September 09, 2013


Fluor Corp. - FLR - close: 67.72 change: +0.57

Stop Loss: 64.75
Target(s): 74.50
Current Option Gain/Loss: Oct70c: - 4.7% & 2014jan70c: - 3.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
09/12/13: FLR also outperformed the market's major indices and posted a +0.8% gain. Today's move marks a bullish breakout past major resistance near the $67.00 level. Our trigger to buy calls was hit at $67.65.

Our target is $74.50. You may want to aim higher. The Point & Figure chart for FLR is bullish with an $82 target.

- Suggested Positions -

Long Oct $70 call (FLR1319j70) entry $1.05

- or -

Long 2014 Jan $70 call (FLR1418a70) entry $3.20

Entry on September 12 at $67.65
Average Daily Volume = 1.1 million
Listed on September 11, 2013


Hanesbrand Inc. - HBI - close: 61.34 change: -1.66

Stop Loss: 59.90
Target(s): 68.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
09/12/13: Thursday proved to be a relatively quiet day for shares of HBI. The stock churned sideways in the $61.00-61.75 zone and closed almost unchanged. Lack of follow through on yesterday's drop is encouraging. We're not giving up yet but we're still on the sidelines.

I am suggesting a trigger to buy calls at $63.25. If triggered our target is $68.50. I do expect to see some temporary resistance at the prior high near $65.00.

Trigger @ 63.25

- Suggested Positions -

buy the Oct $65 call (HBI1319j65)

Entry on September -- at $---.--
Average Daily Volume = 612 thousand
Listed on September 10, 2013


Lennox Intl. - LII - close: 72.76 change: -0.66

Stop Loss: 69.65
Target(s): 74.90
Current Option Gain/Loss: +16.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/12/13: Uh-oh! The spike higher this morning and then reversal back into negative territory feels a little like a short-term top. Today's move erased yesterday's gains. I would not be surprised to see a dip back into the $72-71 zone. I am not suggesting new positions at this time.

Our short-term target is $74.90. More aggressive traders could aim higher.

- Suggested Positions -

Long Oct $70 call (LII1319j70) entry $3.10*

09/11/13 new stop loss @ 69.65
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on September 09 at $71.00
Average Daily Volume = 386 thousand
Listed on September 07, 2013


NetSuite Inc. - N - close: 106.34 change: -0.51

Stop Loss: 101.45
Target(s): 109.00
Current Option Gain/Loss: +67.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/12/13: Shares of N tagged a new all-time high at $107.97 this morning before finally succumbing to the market's widespread dip today. N is arguably short-term overbought here and profit taking could be quick and painful. More conservative traders may want to exit immediately to lock in gains. The bid on our call is at $4.60.

Earlier Comments:
Our multi-week target is $109.00.

- Suggested Positions -

Long Oct $105 call (N1319j105) entry $2.75*

09/12/13 readers may want to take profits now
09/11/13 new stop loss @ 101.45
09/10/13 new stop loss @ 99.45
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on September 09 at $101.05
Average Daily Volume = 294 thousand
Listed on September 03, 2013


Northrop Gruman - NOC - close: 95.74 change: +0.63

Stop Loss: 92.75
Target(s): 99.75
Current Option Gain/Loss: Oct97.5c: + 4.5% & 2014j100c: - 5.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/12/13: NOC shot higher this morning and briefly traded above the $96.00 level before paring its gains. NOC managed to shrug off the market's widespread decline on Thursday. Our trigger to buy calls was hit at $95.25 early this morning.

Earlier Comments:
You could certainly argue that the August highs in the $96.25-96.50 zone are overhead resistance, odds are good that NOC will make a run at the $100 level.

FYI: The Point & Figure chart for NOC is bullish with a long-term $160 target.

- Suggested Positions -

Long Oct $97.50 call (NOC1319j97.5) entry $1.10

- or -

Long 2014 Jan $100 call (NOC1418a100) entry $2.16

Entry on September 12 at $95.25
Average Daily Volume = 1.2 million
Listed on September 11, 2013


Starbucks Corp. - SBUX - close: 75.67 change: +0.28

Stop Loss: 69.95
Target(s): 78.00
Current Option Gain/Loss: Oct75c: +94.9% & 2014Jan75c: +33.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/12/13: SBUX also managed to ignore the market's decline today and post a +0.37% gain. This is yet another new all-time high. SBUX is arguably short-term overbought here and more conservative traders may want to take profits now. Our October $75 call has almost doubled (+94.9%). I am not suggesting new positions at this time.

- Suggested Positions -

Long Oct $75 call (SBUX1319j75) entry $1.18

- or -

Long 2014 Jan $75 call (SBUX1418a75) entry $3.25

09/11/13 SBUX at new highs. Cautious traders may want to lock in some gains.

Entry on September 05 at $72.35
Average Daily Volume = 3.0 million
Listed on September 04, 2013


Tractor Supply Company - TSCO - close: 130.68 change: -0.20

Stop Loss: 124.75
Target(s): 134.00
Current Option Gain/Loss: +77.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/12/13: Shares of TSCO weathered the market's decline today very well. The stock closed virtually unchanged after spending the entire day drifting sideways.

Readers may want to seriously consider just taking profits now. I am not suggesting new positions.

Earlier Comments:
Our target is $134.00. More conservative traders may want to take profits near $130 instead.

NOTE: The company has announced a 2-for-1 stock split set for Friday, September 27th.

- Suggested Positions -

Long Oct $130 call (TSCO1319j130) entry $2.20*

09/12/13 traders may want to take profits now. Ask @ $3.90 (+77.2%)
09/11/13 new stop loss @ 124.75
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on September 09 at $125.25
Average Daily Volume = 352 thousand
Listed on September 05, 2013


UnitedHealth Group - UNH - close: 74.74 change: -0.44

Stop Loss: 73.40
Target(s): 79.75
Current Option Gain/Loss: -10.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/12/13: UNH gapped open higher this morning at $75.32 but the rally didn't last and shares faded to a -0.5% decline. Our suggested trigger to buy calls was $75.25 so the gap higher opened our play. Nimble traders may want to try and time an entry on a dip near $74.00 if the slide continues. Otherwise readers may want to wait for a new high before initiating positions.

- Suggested Positions -

Long Oct $75 call (UNH1319j75) entry $2.30

09/12/13 trade opened on gap higher at $75.32. Trigger was $75.25

Entry on September 12 at $ 75.32
Average Daily Volume = 3.3 million
Listed on September 10, 2013


PUT Play Updates

Bed Bath & Beyond Inc. - BBBY - close: 72.10 change: -0.19

Stop Loss: 73.55
Target(s): 66.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings on Sept. 25th
New Positions: Yes, see below

Comments:
09/12/13: Hmm... today's performance in BBBY is casting some doubt on our bearish play. The market produced a widespread decline and yet BBBY barely moved at all. That's not what we want to see in our bearish candidates. We're not giving up on BBBY yet but traders may want to limit their position size.

Earlier Comments:
I am suggesting a trigger to buy puts at $71.45. If triggered our target is $66.50, just above the simple 200-dma. Please note that I would not be surprised to see a short-term bounce from the $70.00 level and the $72.00 area, once broken as support, should be new resistance. FYI: BBBY is expected to report earnings on September 25th. We will most likely exit prior to the earnings report to avoid any surprises.

Trigger @ 71.45

- Suggested Positions -

buy the Oct $70 PUT (BBBY1319v70)

Entry on September -- at $---.--
Average Daily Volume = 1.45 million
Listed on September 10, 2013


Diamond Offshore Drilling - DO - close: 64.88 change: -0.41

Stop Loss: 66.01
Target(s): 57.50
Current Option Gain/Loss: -52.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/12/13: Traders bought the morning dip in DO for the third day in a row but the intraday bounce faded. Shares lost -0.6%, which underperformed the major indices. I remain cautious here. No new positions at this time. Broken resistance at the 10-dma might prove to be new short-term support (currently near $64.40).

Earlier Comments:
Our target is the $57.50 level. I would not be surprised to see a temporary bounce near the $60.00 mark.

- Suggested Positions -

Long Oct $60 PUT (DO1319v60) entry $0.85

09/11/13 DO is not cooperating and traders may want to exit early now

Entry on September 03 at $63.75
Average Daily Volume = 1.0 million
Listed on August 28, 2013



Longer-Term Play Updates



Chicago Bridge & Iron - CBI - close: 64.34 change: +0.19

Stop Loss: 57.65
Target(s): 74.50
Current Option Gain/Loss: +33.3%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
09/12/13: CBI is still showing relative strength and managed to eke out another gain. Yet it's no surprise to see the rally stall near its May 2013 highs under the $65.00 level. I would expect CBI to see a little bit of profit taking here. The $62 area should be new support.

*Small Positions* - Suggested Positions -

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

09/11/13 new stop loss @ 57.65
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

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


Vanguard FTSE Europe ETF - VGK - close: 53.71 change: -0.24

Stop Loss: 50.95
Target(s): 58.50
Current Option Gain/Loss: - 2.7%
Time Frame: exit PRIOR to 2014 March option expiration
New Positions: see below

Comments:
09/12/13: After a strong two-week bounce the rally in the VGK stalled on Thursday. Investors might want to wait for a dip before initiating new positions. Look for short-term support near $53.00.

Earlier Comments:
We are taking a multi-month time frame with this trade. 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.

- Suggested Positions -

Long 2014 Mar $55 call (VGK1422L55) entry $1.80*

09/11/13 trade opens. VGK @ 53.60
*option entry @ 1.80 is an estimate. Ask closed at $1.75 yesterday
09/10/13 entry trigger met. open positions tomorrow.
09/10/13 new stop loss @ 50.95
08/24/13 adjust the option strike from 2013 Dec $55 to $2014 Mar $55.

Entry on September 11 at $---.--
Average Daily Volume = 3.0 million
Listed on August 10, 2013