Editor's Note:

There was no follow through on yesterday's pullback. The market drifted higher in what turned out to be a broad-based rally. The Dow Jones Transportation index extended its gains to seven days in a row.

DRQ was stopped out. VIAB was triggered.


Current Portfolio:


CALL Play Updates

3D Systems - DDD - close: 57.70 change: +0.95

Stop Loss: 53.45
Target(s): 64.00
Current Option Gain/Loss: - 2.2%
Time Frame: exit PRIOR to earnings on Oct. 29th
New Positions: see below

Comments:
10/24/13: DDD erased yesterday's losses with a +1.6% gain on Thursday. Yet the rally stalled near its highs around $58.00 from earlier this week. Readers may want to wait for a rally past $58.50 before considering new 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

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


The Walt Disney Company - DIS - close: 69.05 change: +0.93

Stop Loss: 65.85
Target(s): 74.00
Current Option Gain/Loss: + 71.2%
Time Frame: exit PRIOR to earnings on November 7th.
New Positions: see below

Comments:
10/24/13: As expected traders bought the dip near support at $68.00. DIS outperformed the market with a +1.3% gain. I would still consider new positions here at current levels.

Our target is $74.00 but we will plan to exit prior to DIS' earnings report on November 7th.

FYI: Tuesday's rally has produced a new buy signal on the Point & Figure chart that is currently suggesting an $80 price target.

- Suggested Positions -

Long NOV $70 call (DIS1316K70) entry $0.66

Entry on October 22 at $68.10
Average Daily Volume = 7.1 million
Listed on October 21, 2013


Honeywell Intl. - HON - close: 87.28 change: +0.59

Stop Loss: 84.75
Target(s): 98.50
Current Option Gain/Loss: Unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see below

Comments:
10/24/13: HON continues to show relative strength. The stock set a new all-time closing high with today's gain. The next challenge is rising past its intraday high from September. The intraday high was $87.55 from September 19th.

I am suggesting a trigger to buy calls at $87.65. If triggered our multi-week target is $98.50.

Trigger @ 87.65

- Suggested Positions -

Buy the 2014 Jan $90 call (HON1418a90) current ask $1.40

Entry on October -- at $---.--
Average Daily Volume = 2.9 million
Listed on October 23, 2013


Helmerich & Payne, Inc. - HP - close: 75.88 change: +0.88

Stop Loss: 74.25
Target(s): 79.50
Current Option Gain/Loss: + 1.7%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
10/24/13: HP found support near $74.50 for the second day in a row. Shares rebounded to a +1.1% gain. Today's move could be used as a new bullish entry point. I am raising our stop loss to $74.25.

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

10/24/13 new stop loss @ 74.25
10/22/13 new stop loss @ 73.75

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


iShares Russell 2000 ETF - IWM - close: 110.98 change: +0.59

Stop Loss: 105.95
Target(s): 114.00
Current Option Gain/Loss: +33.9%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
10/24/13: Traders bought the dip in the small caps and the IWM set a new closing high today.

- Suggested Positions -

Long 2014 Jan $110 call (IWM1418a110) entry 2.80

10/23/13 new stop loss @ 105.95

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


J2 Global, Inc. - JCOM - close: 55.31 change: +0.11

Stop Loss: 53.25
Target(s): 59.75
Current Option Gain/Loss: - 7.5%
Time Frame: exit PRIOR to earnings on November 5th
New Positions: see below

Comments:
10/24/13: Hmm... JCOM really didn't participate in the market's rally today. I would be a little cautious here. Readers may want to readjust their stop loss.

Earlier Comments:
The stock looks ready to launch its next leg higher. New highs could spark a short squeeze. The most recent data listed short interest at 31% of the 43.7 million share float. Our target is $59.75 but more aggressive traders could aim higher. The Point & Figure chart for JCOM is bullish with a $77 target.

- Suggested Positions -

Long NOV $55 call (JCOM1316K55) entry $2.15

Entry on October 21 at $55.05
Average Daily Volume = 329 thousand
Listed on October 19, 2013


Medtronic, Inc. - MDT - close: 57.50 change: -0.15

Stop Loss: 55.40
Target(s): 59.75
Current Option Gain/Loss: +28.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/24/13: After displaying relative strength yesterday, MDT displayed some weakness today. However, if you look at the intraday chart traders were buying the dip near $57.00.

- Suggested Positions -

Long NOV $55 call (MDT1316K55) entry $2.07

Entry on October 22 at $56.75
Average Daily Volume = 3.4 million
Listed on October 21, 2013


Starbucks Corp. - SBUX - close: 79.05 change: -1.00

Stop Loss: 75.75
Target(s): 84.00
Current Option Gain/Loss: + 7.8%
Time Frame: exit PRIOR to earnings on October 31st
New Positions: see below

Comments:
10/24/13: Ouch! SBUX underperformed the market today. The stock gapped open lower and lost -1.24% by the closing bell. I didn't see anything specific to account for today's weakness. Shares are hovering near their simple 10-dma. Readers may want to raise their stop loss closer to the $78.00 level, which should be support. Keep in mind that we do not want to hold over SBUX's earnings report on October 31st.

- Suggested Positions -

Long NOV $80 call (SBUX1316k80) entry $1.65

10/22/13 adjust exit target to $84.00

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


Constellation Brands - STZ - close: 63.85 change: -0.14

Stop Loss: 61.90
Target(s): 67.50
Current Option Gain/Loss: +48.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
10/24/13: STZ seems to be treading water. The stock posted a minor decline as it hovers above short-term technical support at its 10-dma. There is no change from my prior comments.

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

10/22/13 new stop loss @ 61.90, readers may want to take profits now. Our option is up +84%.
10/16/13 new stop loss @ 59.75
10/11/13 trade opened on gap higher at $61.25,
trigger was $61.10

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


Thor Industries - THO - close: 59.53 change: +0.55

Stop Loss: 57.75
Target(s): 64.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
10/24/13: THO bounced back toward its highs but failed to breakout past resistance at $60.00. I don't see any changes from my earlier comments. I am suggesting a trigger to buy calls at $60.25. If triggered our target is $64.75.

Trigger @ 60.25

- Suggested Positions -

Buy the NOV $60 call (THO1316K60) current ask $1.45

Entry on October -- at $---.--
Average Daily Volume = 528 thousand
Listed on October 19, 2013


Viacom, Inc. - VIAB - close: 84.39 change: +0.02

Stop Loss: 82.75
Target(s): 89.50
Current Option Gain/Loss: -19.3%
Time Frame: exit PRIOR to earnings on November 14th.
New Positions: see below

Comments:
10/24/13: Hmmm... we may need to be more careful here with VIAB. The S&P 500 slowly drifted higher all day long. Yet the rally in VIAB peaked midday and shares retreated to almost unchanged by the close. Unfortunately VIAB did breakout past resistance near $85.00 and hit our trigger to buy calls at $85.30 before reversing. I am not suggesting new positions with VIAB below $85.00.

Earlier Comments:
The September 27th intraday high was $85.22. I am suggesting a trigger to buy calls at $85.30. If triggered our target is $89.50. However, we will plan to exit prior to VIAB's earnings report in mid November.

- Suggested Positions -

Long DEC $85 call (VIAB1322L85) entry $3.10

Entry on October 24 at $85.30
Average Daily Volume = 2.6 million
Listed on October 22, 2013


PUT Play Updates


Currently we do not have any active put trades.




Longer-Term Play Updates



Chicago Bridge & Iron - CBI - close: 74.34 change: +0.76

Stop Loss: 68.40
Target(s): 79.00
Current Option Gain/Loss: +292.1%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
10/24/13: Traders quickly bought the dip in CBI near its rising 10-dma. The stock rebounded to a +1.0% gain.

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

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


Vanguard FTSE Europe ETF - VGK - close: 57.46 change: +0.37

Stop Loss: 53.90
Target(s): Sell half @ $58.00, sell the rest at $63.00
Current Option Gain/Loss: +88.8%
Time Frame: exit PRIOR to 2014 March option expiration
New Positions: see below

Comments:
10/24/13: The VGK completely erased yesterday's loss with a +0.6% gain. The ETF set a new two-year high closing high today.

Earlier Comments:
We are taking a multi-month time frame with this trade. FYI: The Point & Figure chart for VGK is bullish with a $63 target.

- Suggested Positions -

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

10/22/13 Strategy Update: Plan to exit half @ $58.00 and exit the rest at $63.00. New stop loss @ 53.90
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.

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


CLOSED BULLISH PLAYS

Dril-Quip, Inc. - DRQ - close: 114.76 change: -0.65

Stop Loss: 114.75
Target(s): 124.50
Current Option Gain/Loss: Nov120c: -70.6% & Dec125c -66.6%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
10/24/13: The correction in DRQ continued. Tuesday's move did prove to be a failed rally and bull trap pattern. The weakness continued today and DRQ hit our stop loss at $114.75.

Earlier comments:
I am suggesting small positions because the spread on DRQ's November options are a bit wide.

*small positions* - Suggested Positions -

NOV $120 call (DRQ1316k120) entry $2.90* exit $0.85 (-70.6%)

- or -

DEC $125 call (DRQ1322L125) entry $1.95 exit $0.65 (-66.6%)

10/24/13 stopped out
*option price is an estimate.

chart:

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