Editor's Note:

Traders are still buying the dip as stocks rebound off their Friday morning lows. The Dow Jones Industrials displayed relative strength this morning with no morning dip.

CSOD was triggered. BBBY has been removed.
I have updated a some stop losses tonight.


Current Portfolio:


CALL Play Updates

Alnylam Pharmaceuticals - ALNY - close: 55.13 change: -0.39

Stop Loss: 53.75
Target(s): sell half at $60.0 and half at $64.00
Current Option Gain/Loss: -30.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/14/13: ALNY delivered a very disappointing performance for the week. The stock market's major indices actually performed well thanks to a strong move up on Monday-Tuesday-Wednesday. Yet shares of ALNY have been moving the opposite direction. This stock is now down four days in a row. Lack of participation in the market's rally is definitely a warning sign. I am raising our stop loss to $53.75.

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

09/14/13 new stop loss @ 53.75, traders should be cautious given ALNY's recent relative weakness.

chart:

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


Anadarko Petroleum - APC - close: 94.70 change: -0.83

Stop Loss: 91.65
Target(s): 99.50
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
09/14/13: Friday was a relatively quiet day for oil futures and energy stocks. Yet APC saw a sharp spike higher on Friday morning. Unfortunately traders sold the rally and APC reversed into a -0.8% decline, erasing Thursday's gain. We can look for short-term support near the 10-dma (about 93.50).

- 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.

chart:

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


Cornerstone OnDemand, Inc. - CSOD - close: 53.77 change: -0.83

Stop Loss: 52.25
Target(s): 59.50
Current Option Gain/Loss: -34.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/14/13: CSOD also saw a spike higher on Friday morning that reversed into a decline. Shares hit new highs at $55.47 but posted a -1.5% decline by the closing bell. Our trigger to buy calls was hit at $55.25 on Friday morning but I would wait for a new rally above $55 before considering new positions.

- Suggested Positions -

Long Oct $55 call (CSOD1319j55) entry $2.60*

chart:

Entry on September 13 at $55.25
Average Daily Volume = 367 thousand
Listed on September 12, 2013


Fluor Corp. - FLR - close: 67.21 change: -0.51

Stop Loss: 64.75
Target(s): 74.50
Current Option Gain/Loss: Oct70c: -14.2% & 2014jan70c: - 9.3%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
09/14/13: After four days of gains FLR hit some profit taking on Friday with a -0.75% dip. Broken resistance near $67.00 should offer some support. I would wait for a bounce before considering new bullish positions.

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

chart:

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


Hanesbrand Inc. - HBI - close: 62.00 change: +0.69

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:
09/14/13: It looks like traders are back to buying the dip in HBI. More aggressive traders might want to launch positions now. I am suggesting readers wait for a new relative high and follow the plan in my earlier comments.

Earlier Comments:
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)

chart:

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


Lennox Intl. - LII - close: 72.79 change: +0.03

Stop Loss: 69.65
Target(s): 74.90
Current Option Gain/Loss: +12.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/14/13: Fortunately there was no follow through on Thursday's short-term reversal lower. Yet that doesn't mean LII can't see a retracement back toward the $71-70 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.

chart:

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


NetSuite Inc. - N - close: 106.03 change: -0.31

Stop Loss: 102.40
Target(s): 109.00
Current Option Gain/Loss: +52.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/14/13: N's performance on Friday really didn't tell us much. The stock drifted sideways on either side of the $106.00 level. Lack of any real profit taking is encouraging. Yet N remains short-term overbought here. I am raising our stop loss to $102.40. More conservative traders may want to exit immediately to lock in gains.

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

- Suggested Positions -

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

09/14/13 new stop loss @ 102.40
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.

chart:

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


Northrop Gruman - NOC - close: 96.19 change: +0.45

Stop Loss: 93.30
Target(s): 99.75
Current Option Gain/Loss: Oct97.5c: +13.6% & 2014j100c: - 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
09/14/13: NOC ended the week on a high note, setting a new all-time closing high on Friday. Yet it's worth noting that the rally did stall at its all-time intraday high set in early August. NOC could see a pullback here but I would look for support near $94.00. A breakout past its August highs should herald a run toward round-number resistance at the $100 mark. I am adjusting our stop loss to $93.30.

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

09/14/13 new stop loss @ 93.30

chart:

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


Starbucks Corp. - SBUX - close: 75.57 change: -0.10

Stop Loss: 71.75
Target(s): 78.00
Current Option Gain/Loss: Oct75c: +87.2% & 2014Jan75c: +32.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/14/13: Traders bought the dip in SBUX on Friday morning and shares reduced their loss to just 10 cents. After a strong, four-day rally SBUX was due for some profit taking. The quick rebound is a sign of strength. I am raising our stop loss to $71.75.

- Suggested Positions -

Long Oct $75 call (SBUX1319j75) entry $1.18

- or -

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

09/14/13 new stop loss @ 71.75
09/11/13 SBUX at new highs. Cautious traders may want to lock in some gains.

chart:

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


Tractor Supply Company - TSCO - close: 130.50 change: -0.18

Stop Loss: 124.75
Target(s): 134.00
Current Option Gain/Loss: +68.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/14/13: Friday looked a lot like Thursday's session for TSCO with shares drifting sideways in a narrow range. The stock found short-term support near $130.00. The lack of profit taking is encouraging. Readers have to decide if they want to take profits now or risk just raising their stop loss. 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.

chart:

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


UnitedHealth Group - UNH - close: 74.48 change: -0.26

Stop Loss: 73.40
Target(s): 79.75
Current Option Gain/Loss: -20.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/14/13: Hmm... UNH underperformed the major indices and its peers in the healthcare sector on Friday. Traders did appear to be buying the dip near $74.00 on Friday afternoon. Readers may want to wait for a bounce back above $75.00 before considering new bullish positions. Overall the two-day dip does not change my outlook for UNH but a breakdown below $74.00 would risk hitting our stop loss.

- 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

chart:

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


PUT Play Updates

Diamond Offshore Drilling - DO - close: 64.41 change: -0.47

Stop Loss: 66.01
Target(s): 57.50
Current Option Gain/Loss: -49.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/14/13: Shares of DO are back to underperforming the energy stocks and the broader market. The stock lost -0.7% on Friday and is now flirting with a breakdown back below its simple 10-dma. Friday's low was $64.21. I would be tempted to use a new drop under $64.00 as a bearish entry point.

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

chart:

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: 63.50 change: -0.84

Stop Loss: 57.65
Target(s): 74.50
Current Option Gain/Loss: +15.6%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
09/14/13: It should be no surprise to see CBI pullback on Friday. I cautioned readers that the May highs were likely resistance and CBI could see some profit taking after such a strong performance this past week. Look for short-term support near $62.00.

*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

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: 53.96 change: +0.25

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:
09/14/13: The European markets were mostly higher on Friday and traders bought the dip in the VGK on Friday morning. Shares are poised to breakout over what looks like short-term resistance at the $54.00 level.

Depending on your risk tolerance you could use a move past $54 as a new entry point or wait for a possible dip back toward $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.

chart:

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


CLOSED BEARISH PLAYS

Bed Bath & Beyond Inc. - BBBY - close: 73.63 change: +1.53

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

Comments:
09/14/13: BBBY is not cooperating with us. Shares outperformed the market on Friday with a +2.1% gain. This move marks a breakout from the $71.50-73.00 trading range. Our trade has not opened yet (trigger 71.45) so we're removing BBBY as a candidate.

Trade did not open.

09/14/13 removed from the newsletter. trigger was 71.45

chart:

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