Editor's Note:

The S&P 500, Russell 2000 and the NASDAQ all ended Friday with gains for the week. The trend is up but some stocks (and indices) are looking overbought and due for a dip.

We want to exit our DDD and CBI trades on Monday. See play updates for details.


Current Portfolio:


CALL Play Updates

3D Systems - DDD - close: 58.64 change: +0.94

Stop Loss: 55.75
Target(s): 64.00
Current Option Gain/Loss: +11.1%
Time Frame: exit PRIOR to earnings on Oct. 29th
New Positions: see below

Comments:
10/26/13: DDD displayed relative strength on Friday with a +1.6% gain and another new high. Hopefully this pace continues. We are almost out of time. DDD is due to report earnings on October 29th and we do not want to hold over the announcement. Therefore I am suggesting we plan on exiting positions Monday, October 28th at the closing bell. Tonight we are raising our stop loss to $55.75.

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

10/26/13 new stop loss @ 55.75, prepare to exit on Monday, Oct 28th at the closing bell

chart:

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


The Walt Disney Company - DIS - close: 69.26 change: +0.21

Stop Loss: 65.85
Target(s): 74.00
Current Option Gain/Loss: + 81.8%
Time Frame: exit PRIOR to earnings on November 7th.
New Positions: see below

Comments:
10/26/13: DIS rally to another new all-time high on Friday and closed above the $69.00 level. The next challenge is potential round-number resistance at the $70.00 mark.

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

chart:

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


Honeywell Intl. - HON - close: 87.50 change: +0.22

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:
10/26/13: HON continued to push higher on Friday but shares failed to hit a new high and failed to hit our entry point. If this rally continues on Monday we could see our trade opened. There is no change from my prior comments.

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 $1.46

chart:

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


Helmerich & Payne, Inc. - HP - close: 76.57 change: +0.69

Stop Loss: 74.25
Target(s): 79.50
Current Option Gain/Loss: +16.8%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
10/26/13: HP's rebound continued on Friday with a +0.9% gain. Shares remain below short-term resistance near $78.00. The stock did end a three-week winning streak but HP looks poised to continue higher.

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

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: 111.08 change: +0.10

Stop Loss: 105.95
Target(s): 114.00
Current Option Gain/Loss: +31.4%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
10/26/13: The small cap IWM continued to inch higher on Friday. This ETF is up seven out of the last eight weeks and is essentially sitting at all-time highs. Beware the trend line of overhead resistance (which is also top of its bullish channel).

I am not suggesting new positions.

- Suggested Positions -

Long 2014 Jan $110 call (IWM1418a110) entry 2.80

10/23/13 new stop loss @ 105.95

chart:

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


J2 Global, Inc. - JCOM - close: 55.06 change: -0.25

Stop Loss: 53.25
Target(s): 59.75
Current Option Gain/Loss: -16.2%
Time Frame: exit PRIOR to earnings on November 5th
New Positions: see below

Comments:
10/26/13: I remain cautious on JCOM. The major indices have continued to inch higher this past week. Yet the rally in JCOM stalled on Wednesday and has been stuck drifting sideways near $55.00. 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

chart:

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


Medtronic, Inc. - MDT - close: 57.36 change: -0.14

Stop Loss: 55.40
Target(s): 59.75
Current Option Gain/Loss: +23.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
10/26/13: MDT has found short-term support near $57.00 the last two days in a row. If $57 breaks then $56.00 should be even stronger support. I would be tempted to wait for a dip near its 10-dma or $56.00 before initiating new positions.

- Suggested Positions -

Long NOV $55 call (MDT1316K55) entry $2.07

chart:

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


Rockwell Automation Inc. - ROK - close: 110.60 change: -1.15

Stop Loss: 108.95
Target(s): 117.50
Current Option Gain/Loss: Unopened
Time Frame: Exit PRIOR to earnings on November 7th
New Positions: Yes, see below

Comments:
10/26/13: ROK did not see any follow through on its Thursday rally. Instead shares retreated from short-term resistance near $112.00 and underperformed the market on Friday with a -1.0% decline. Overall I don't see any changes from my Thursday night new play comments.

I am suggesting a trigger to buy calls at $112.25. If triggered our target is $117.50 but we will plan to exit prior to earnings on November 7th.

Trigger @ 112.25

- Suggested Positions -

buy the NOV $115 call (ROK1316K115)

chart:

Entry on October -- at $---.--
Average Daily Volume = 659 thousand
Listed on October 23, 2013


Starbucks Corp. - SBUX - close: 79.96 change: +0.91

Stop Loss: 77.75
Target(s): 84.00
Current Option Gain/Loss: +30.9%
Time Frame: exit PRIOR to earnings on October 30
New Positions: see below

Comments:
10/26/13: Traders bought the dip in SBUX on Friday and shares outperformed the market with a +1.15% gain. Yet once again the stock is facing round-number resistance at $80.00. We are almost out of time. SBUX is due to report earnings on October 30th (previously 31st). We do not want to hold over the announcement. Therefore we'll plan to exit positions on Tuesday, October 29th at the closing bell. I am raising our stop loss to $77.75.

- Suggested Positions -

Long NOV $80 call (SBUX1316k80) entry $1.65

10/26/13 new stop loss @ 77.75, prepare to exit on Tuesday, Oct. 29th at the closing bell
10/22/13 adjust exit target to $84.00

chart:

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


Constellation Brands - STZ - close: 63.91 change: +0.06

Stop Loss: 61.90
Target(s): 67.50
Current Option Gain/Loss: +44.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
10/26/13: Friday proved to be another quiet day for STZ. The stock drifted sideways and held on to short-term technical support at its 10-dma. There is no change from my earlier 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

chart:

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


Thor Industries - THO - close: 59.03 change: -0.50

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:
10/26/13: THO has spent the last few days churning sideways below resistance at the $60.00 level. The larger trend is still bullish so we're not giving up yet. Traders bought the dip on Friday near its 10-dma.

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)

chart:

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


Viacom, Inc. - VIAB - close: 84.94 change: +0.55

Stop Loss: 82.75
Target(s): 89.50
Current Option Gain/Loss: -12.9%
Time Frame: exit PRIOR to earnings on November 14th.
New Positions: see below

Comments:
10/26/13: VIAB acts like it wants to go higher. The last two days in a row shares have shot higher from the opening bell only to see its rally fade by lunchtime. Shares did set a new all-time closing high on Friday but VIAB remains near round-number resistance at the $85.00 level.

Friday's high was $85.45. Readers may want to wait for a rally past $85.50 before initiating new bullish positions.

Earlier Comments:
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

chart:

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: 74.52 change: +0.18

Stop Loss: 71.75
Target(s): 79.00
Current Option Gain/Loss: +296.0%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
10/26/13: CBI bounced from its simple 10-dma again on Friday. Shares look poised to continue higher. However, CBI is due to report earnings on Tuesday, October 29th. After such a big rally so far odds are good that CBI could see some post-earnings profit taking no matter how great the results are. Therefore we want to exit positions on Monday, October 28th at the closing bell. I am raising our stop loss to $71.75.

*Small Positions* - Suggested Positions -

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

10/26/13 new stop loss @ 71.75, prepare to exit on Monday, Oct. 28th at the closing bell
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: 57.47 change: +0.01

Stop Loss: 53.90
Target(s): Sell half @ $58.00, sell the rest at $63.00
Current Option Gain/Loss: +94.4%
Time Frame: exit PRIOR to 2014 March option expiration
New Positions: see below

Comments:
10/26/13: Friday proved to be a quiet day for the VGK. Shares saw some very minor profit taking in the morning but faded back to unchanged by the closing bell. This ETF remains short-term overbought and probably due for some profit taking. I am not suggesting new positions.

Don't forget that we have two exit targets for this trade! More conservative traders could lock in gains now with our option up +94%.

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.

chart:

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