Editor's Note:

Investors rushed back into stocks following news that the government shutdown would end and the debt ceiling would be raised. No one seemed to care that deal was only temporary and postponed the budget and debt ceiling issues.

The S&P 500 and the Russell 2000 ended the week at record highs. The NASDAQ closed at new 13-year highs.

We are removing BWLD. DDD was triggered. We want to exit our ZMH play on Monday.


Current Portfolio:


CALL Play Updates

3D Systems - DDD - close: 56.77 change: +0.01

Stop Loss: 53.45
Target(s): 64.00
Current Option Gain/Loss: - 6.6%
Time Frame: exit PRIOR to earnings on Oct. 29th
New Positions: see below

Comments:
10/19/13: DDD's performance on Friday was a bit disappointing. Shares closed virtually unchanged in spite of the market's broad-based rally. Shares did manage to hit a new high and DDD did hit our suggested entry point to buy calls at $57.05. I would wait for a new rise past $57.00 before launching positions.

Earlier Comments:
DDD could see some short covering. The most recent data listed short interest at 32.5% of the 94.5 million share float.

Our target is $64.00. However, we will plan to exit prior to DDD's earnings report on October 29th.

- Suggested Positions -

Long NOV $60 call (DDD1316K60) entry $2.25

chart:

Entry on October 18 at $57.05
Average Daily Volume = 6.8 million
Listed on October 17, 2013


Dril-Quip, Inc. - DRQ - close: 119.38 change: +1.38

Stop Loss: 114.75
Target(s): 124.50
Current Option Gain/Loss: Nov120c: -15.5% & Dec125c -12.8%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
10/19/13: DRQ quickly recovered from Thursday's dip. Shares gapped higher on Friday morning and posted a +1.1% gain. This is a new closing high for the stock. The next challenge for DRQ bulls is potential resistance at the $120.00 mark.

Earlier comments:
Our target is $124.50. However, we will most likely exit prior to DRQ's earnings report expected in early November. If you are willing to hold over the earnings announcement then you may want to use the December options instead of November options. I am suggesting small positions because the spread on DRQ's November options are a bit wide.

*small positions* - Suggested Positions -

Long NOV $120 call (DRQ1316k120) entry $2.90*

- or -

Long DEC $125 call (DRQ1322L125) entry $1.95

*option price is an estimate.

chart:

Entry on October 16 at $118.25
Average Daily Volume = 281 thousand
Listed on October 14, 2013


Helmerich & Payne, Inc. - HP - close: 76.76 change: +0.92

Stop Loss: 71.75
Target(s): 79.50
Current Option Gain/Loss: +29.8%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
10/19/13: HP displayed relative strength on Friday. Shares gapped open higher and hit $77.73 intraday before paring its gains. That is a new all-time high. Shares are starting to look a little short-term overbought. I would not be surprised to see a dip back toward the $75.00 area but given the rally in the oil stocks HP may not see a dip. I am not suggesting new positions at this time.

We do not want to hold over the mid-November earnings report. FYI: The Point & Figure chart for HP is bullish with an $82 target.

- Suggested Positions -

Long NOV $75 call (HP1316K75) entry $2.31

chart:

Entry on October 14 at $74.50
Average Daily Volume = 1.1 million
Listed on October 12, 2013


iShares Russell 2000 ETF - IWM - close: 110.69 change: +1.25

Stop Loss: 104.80
Target(s): 114.00
Current Option Gain/Loss: +23.5%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
10/19/13: The congressional band-aid for the government shutdown and the debt ceiling gave investors the "all clear" signal. The small cap Russell 2000 index and the IWM raced to new all-time highs. This ETF could find resistance near the top of its bullish channel (see chart). I am not suggesting new positions.

- Suggested Positions -

Long 2014 Jan $110 call (IWM1418a110) entry 2.80

chart:

Entry on October 16 at $108.55
Average Daily Volume = 41 million
Listed on October 14, 2013


Starbucks Corp. - SBUX - close: 79.31 change: +0.58

Stop Loss: 75.75
Target(s): 82.50
Current Option Gain/Loss: +13.3%
Time Frame: exit PRIOR to earnings in very late October
New Positions: see below

Comments:
10/19/13: SBUX gapped higher on Friday and shares closed with a +0.7% gain and another new all-time high. It is possible that the $80.00 level is round-number resistance. Should the stock fail there I would expect a dip back toward $78.00, which should be new support.

Earlier Comments:
Our target is $82.50. Yes, it's possible that the $80.00 level could be round-number, psychological resistance but after a three-week consolidation sideways under the $78.00 level we suspect that $80 is not going to stop the rally in SBUX. We do not want to hold over SBUX's earnings, which will likely occur at the end of the month of early November.

- Suggested Positions -

Long NOV $80 call (SBUX1316k80) entry $1.65

chart:

Entry on October 14 at $78.25
Average Daily Volume = 3.7 million
Listed on October 12, 2013


Constellation Brands - STZ - close: 64.33 change: +0.44

Stop Loss: 59.75
Target(s): 67.50
Current Option Gain/Loss: +84.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
10/19/13: The march higher in STZ continues with a +0.6% gain on Friday. It is possible that the $65.00 level could be round-number, psychological resistance. If that's true then STZ may be close to a pullback. More conservative traders might want to take some money off the table here. I am not suggesting new positions.

Earlier Comments:
Our target is $67.50 but we may end up exiting near $65.00, which could be potential round-number resistance.

- Suggested Positions -

Long NOV $62.50 call (STZ1316k62.5) entry $1.38

10/16/13 new stop loss @ 59.75
10/11/13 trade opened on gap higher at $61.25,
trigger was $61.10

chart:

Entry on October 11 at $61.25
Average Daily Volume = 1.9 million
Listed on October 10, 2013


Vipshop Holdings Limited - VIPS - close: $76.51 change: +3.02

Stop Loss: 69.75
Target(s): 78.50
Current Option Gain/Loss: +43.7%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
10/19/13: Wow! VIPS continues to sprint higher. Shares just added +4.1% on Friday following a +4.1% gain on Thursday. The intraday high on Friday was $77.20. I am adjusting our exit target from $77.50 to $78.50. More conservative traders may want to just take profits now since VIPS is starting to look short-term overbought again. I am raising our stop loss to $69.75.

Earlier Comments:
If this rally continues the stock could see some short covering. The most recent data listed short interest at 8.7% of the very small 20.5 million share float.

- Suggested Positions -

Long NOV $75 call (VIPS1316K75) entry $4.80

10/19/13 new stop loss @ 69.75, adjust exit target from 77.50 to 78.50

chart:

Entry on October 17 at $71.55
Average Daily Volume = 1.25 million
Listed on October 16, 2013


Zimmer Holdings - ZMH - close: 88.95 change: +1.07

Stop Loss: 84.40
Target(s): 89.50
Current Option Gain/Loss: +70.3%
Time Frame: exit PRIOR to earnings on Oct. 24th
New Positions: see below

Comments:
10/19/13: Our exit target has been $89.50. Shares of ZMH hit $89.49 on Friday before trimming its gains. The stock ended the session up +1.2%. I am suggesting we exit immediately on Monday morning to lock in gains. More aggressive traders may want to let this trade run but bear in mind that ZMH is looking overbought and nearing likely resistance (see chart).

- Suggested Positions -

Long NOV $85 call (ZMH1316k85) entry $2.70

10/19/13 prepare to exit on Monday, Oct 21st to lock in gains
10/16/13 new stop loss @ 84.40
10/14/13 adjust exit target to $89.50

chart:

Entry on October 10 at $85.55
Average Daily Volume = 1.2 million
Listed on October 09, 2013


PUT Play Updates


Currently we do not have any active put trades.




Longer-Term Play Updates



Chicago Bridge & Iron - CBI - close: 74.44 change: +1.62

Stop Loss: 68.40
Target(s): 79.00
Current Option Gain/Loss: +300.0%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
10/19/13: Shares of CBI seem to be bullet proof. The stock is up six weeks in a row. Friday saw CBI outperform the market with a +2.2% gain. I am raising our stop loss to $68.40. More conservative investors may want to lock in gains now. I am not suggesting new positions at this time.

FYI: CBI is due to report earnings on October 29th.

*Small Positions* - Suggested Positions -

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

10/19/13 new stop loss @ 68.40
10/01/13 new stop loss @ 64.00, adjust target to $79.00
09/21/13 new stop loss @ 59.75
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: 56.57 change: +0.36

Stop Loss: 52.75
Target(s): 58.50
Current Option Gain/Loss: +50.0%
Time Frame: exit PRIOR to 2014 March option expiration
New Positions: see below

Comments:
10/19/13: Friday was another bullish session for the European stock markets. The VGK followed Thursday's big gain with another new 52-week high on Friday. I am raising our stop loss to $52.75. I am not suggesting new positions at this time.

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*

10/19/13 new stop loss @ 52.75
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 BULLISH PLAYS

Buffalo Wild Wings, Inc. - BWLD - close: 119.43 change: +0.94

Stop Loss: 118.40
Target(s): 129.00
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings on Oct. 29th
New Positions: see below

Comments:
10/19/13: BWLD managed a bounce on Friday. The larger trend is up but shares have not fully participated in the market's current rally. Our trade has not opened yet (trigger was $122.00). Tonight we're removing BWLD as an active candidate. Readers may want to keep an eye on BWLD and revisit it if shares breakout past $122.00.

Earlier comments:
The most recent data listed short interest at 9% of the very small 18 million share float. A breakout to another new high could spark more short covering.

Trade did not open.

10/19/13 removed from the newsletter

chart:

Entry on October -- at $---.--
Average Daily Volume = 324 thousand
Listed on October 15, 2013