Editor's Note:

After underperforming the large cap indices late last week the small cap Russell 2000 index outperformed today with a decent bounce (+1.1%).

JCOM was closed. MDT was stopped out. UNP has been removed.


Current Portfolio:


CALL Play Updates

B/E Aerospace Inc. - BEAV - close: 82.34 change: +0.30

Stop Loss: 79.60
Target(s): 89.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: Yes, see below

Comments:
11/04/13: BEAV continued to drift higher on Monday but shares only hit an intraday high of $82.51. There is no change from our weekend new play description.

Earlier Comments:
Friday's high was $82.68. I am suggesting a trigger to buy calls at $82.75. If triggered our target is $89.50. FYI: The Point & Figure chart for BEAV is bullish with a $90 target.

Trigger @ 82.75

- Suggested Positions -

Buy the DEC $85 call (BEAV1322L85) current ask $1.45

Entry on November -- at $---.--
Average Daily Volume = 894 thousand
Listed on November 02, 2013


Costco Wholesale - COST - close: 120.34 change: +0.72

Stop Loss: 118.40
Target(s): 129.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
11/04/13: The rally in COST continued on Monday. Shares managed to close above round-number resistance at the $120 level. Yet COST only hit an intraday high of $120.40. Thus we're still on the sidelines. There is no change from our weekend new play description on COST.

Earlier Comments:
I am suggesting a trigger to buy calls at $120.50. If triggered our target is $129.00.

Trigger @ 120.50

- Suggested Positions -

Buy the 2014 Jan $125 call (COST1418a125) current ask $1.23

Entry on November -- at $---.--
Average Daily Volume = 1.9 million
Listed on November 02, 2013


The Walt Disney Company - DIS - close: 68.81 change: -0.20

Stop Loss: 67.45
Target(s): 74.00
Current Option Gain/Loss: + 10.6%
Time Frame: exit PRIOR to earnings on November 7th.
New Positions: see below

Comments:
11/04/13: DIS spiked higher this morning but the rally didn't last. Shares eventually underperformed the market with a -0.28% decline. We only have two days left for this trade.

DIS is scheduled to report earnings on November 7th, after the closing bell. I am suggesting we exit positions on Wednesday, November 6th at the closing bell to avoid holding over the announcement.

- Suggested Positions -

Long NOV $70 call (DIS1316K70) entry $0.66

11/02/13 time is almost up. Prepare to exit on Nov. 6th at the close
new stop loss @ 67.45

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


Dover Corp. - DOV - close: 91.54 change: +0.28

Stop Loss: 89.95
Target(s): 99.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
11/04/13: Hmm... DOV's performance today, while not bad, was not very inspiring either. If shares don't show better strength soon we will likely remove DOV as an active candidate.

The stock seems to have resistance near its mid-September highs. I am suggesting a trigger to buy calls at $93.00. If triggered our target is $99.50. The Point & Figure chart for DOV is bullish with a $105 target.

Trigger @ 93.00

- Suggested Positions -

Buy the DEC $95 call (DOV1322L95)

Entry on October -- at $---.--
Average Daily Volume = 1.0 million
Listed on October 29, 2013


Honeywell Intl. - HON - close: 86.31 change: -0.60

Stop Loss: 85.75
Target(s): 98.50
Current Option Gain/Loss: -39.3%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
11/04/13: HON is not acting well. Shares look a little sick with today's relative weakness. Although the stock did find support near $86.00 today. If there is any follow through lower tomorrow we will likely see HON hit our stop at $85.75. I am not suggesting new positions at this time.

- Suggested Positions -

Long 2014 Jan $90 call (HON1418a90) entry $1.45

11/02/13 new stop loss @ 85.75
10/30/13 Caution. HON hit our trigger but the stock produced a potential bearish reversal pattern today.

Entry on October 30 at $87.65
Average Daily Volume = 2.9 million
Listed on October 23, 2013


Helmerich & Payne, Inc. - HP - close: 77.85 change: +0.42

Stop Loss: 75.75
Target(s): 79.50
Current Option Gain/Loss: +38.5%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
11/04/13: HP managed to outperform the broader market with a +0.5% gain on Monday. Yet the rally seemed to struggle with the $78.00 level today. I am not suggesting new positions.

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

10/29/13 new stop loss @ 75.75
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: 109.97 change: +1.26

Stop Loss: 107.75
Target(s): 114.00
Current Option Gain/Loss: + 5.7%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
11/04/13: IWM underperformed the large cap indices late last week. Yet shares of the IWM managed to erase the last two days of losses with a +1.1% gain today. It is worth noting that the bounce did stall near potential round-number resistance at $110 and the 10-dma.

- Suggested Positions -

Long 2014 Jan $110 call (IWM1418a110) entry 2.80

10/29/13 new stop loss @ 107.75
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


Packaging Corp. of America - PKG - close: 64.27 change: +1.66

Stop Loss: 61.25
Target(s): 67.50
Current Option Gain/Loss: + 26.6%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
11/04/13: The rally in PKG is picking up speed. Shares outperformed the market with a +2.6% gain on Monday. This is another new all-time high. I am raising our stop loss to $61.25.

- Suggested Positions -

Long 2014 Jan $65 call (PKG1418a65) entry $1.50

11/04/13 new stop loss @ 61.25

Entry on October 28 at $62.50
Average Daily Volume = 1.0 million
Listed on October 23, 2013


Pall Corp. - PLL - close: 81.96 change: +0.49

Stop Loss: 77.90
Target(s): 86.00
Current Option Gain/Loss: + 9.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/04/13: PLL also outperformed the market's major indices on Monday with a +0.6% gain. More conservative traders may want to start raising their stop loss. I am not suggesting new positions at this time.

Earlier Comments:
Our target is $86.00. However, we will plan to exit prior to PLL's earnings report in late November (not date set yet). FYI: The Point & Figure chart for PLL is bullish with a long-term $113 target.

- Suggested Positions -

Long DEC $85 call (PLL1321L85) entry $1.10

Entry on October 28 at $80.50
Average Daily Volume = 551 thousand
Listed on October 23, 2013


SanDisk Corp. - SNDK - close: 68.97 change: -0.53

Stop Loss: 67.90
Target(s): 74.75
Current Option Gain/Loss: -19.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
11/04/13: SNDK managed a bounce and outperformed the market with a +1.1% gain. Yet shares were stuck below the $70.00 level all day long. I am not suggesting new positions at this time.

Earlier Comments:
Our target is $74.75 but we may want to aim higher. The Point & Figure chart for SNDK is bullish with an $82 target.

- Suggested Positions -

Long 2014 Jan $72.50 call (SNDK1418a72.5) entry $2.75

Entry on October 29 at $70.60
Average Daily Volume = 5.0 million
Listed on October 28, 2013


Constellation Brands - STZ - close: 65.78 change: +0.18

Stop Loss: 63.40
Target(s): 68.50
Current Option Gain/Loss: +117.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
11/04/13: STZ is still inching higher and tagged another new high near $66 today. More conservative traders may want to raise their stop loss again.

- Suggested Positions -

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

10/30/13 new stop loss @ 63.40
10/29/13 new stop loss @ 63.25
10/28/13 adjust exit target to $68.50
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


PUT Play Updates

F5 Networks - FFIV - close: 79.55 change: +0.12

Stop Loss: 83.25
Target(s): 76.00
Current Option Gain/Loss: +25.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/04/13: After FFIV's big drop on Friday and another up day for the market on Monday I am not surprised to see FFIV trying to bounce. Broken support at $82 should be new resistance. I am moving our stop loss down to $83.25.

- Suggested Positions -

Long DEC $80 PUT (FFIV1322X80) entry $3.15

11/04/13 new stop loss @ 83.25

Entry on October 31 at $82.00
Average Daily Volume = 2.2 million
Listed on October 30, 2013


Garmin Ltd. - GRMN - close: 47.91 chane: +1.30

Stop Loss: 49.25
Target(s): 43.50
Current Option Gain/Loss: -37.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/04/13: I cautioned readers that GRMN was an aggressive trade and that shares could be volatile. This stock is definitely seeing some volatility today with a +2.7% bounce. You'll notice the bounce did stall under resistance near $48.00 and its 10-dma and 20-dma. A reversal here could be used as a new bearish entry point.

Earlier Comments:
I do consider this an aggressive trade. GRMN has obviously been volatile the last couple of days. Plus the most recent data listed short interest at 13% of the 121 million share float.

Our target is $43.50. At this point GRMN should be nearing significant support in the $43.00 area and we might switch directions and buy calls.

*Small Positions!* - Suggested Positions -

Long DEC $45 PUT (GRMN1322X45) entry $1.08

Entry on November 01 at $46.82
Average Daily Volume = 1.2 million
Listed on October 31, 2013



Longer-Term Play Updates



Vanguard FTSE Europe ETF - VGK - close: 56.76 change: +0.34

Stop Loss: 53.90
Target(s): Sell half @ $58.00, sell the rest at $63.00
Current Option Gain/Loss: +61.1%
Time Frame: exit PRIOR to 2014 March option expiration
New Positions: see below

Comments:
11/04/13: VGK is bouncing after testing short-term support on Friday. More conservative traders may want to raise their stop loss.

Earlier Comments:
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%.

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

J2 Global, Inc. - JCOM - close: 54.94 change: -0.05

Stop Loss: 53.75
Target(s): 59.75
Current Option Gain/Loss: -11.6%
Time Frame: exit PRIOR to earnings on November 5th
New Positions: see below

Comments:
11/04/13: Our plan was to exit our JCOM trade today at the closing bell to avoid holding over the earnings report due out tomorrow.

- Suggested Positions -

Long NOV $55 call (JCOM1316K55) entry $2.15 exit $1.90 (-11.6%)

11/04/13 planned exit
11/02/13 Exit on Monday, Nov. 4th at the close
10/31/13 prepare to exit on Nov. 4th
10/29/13 new stop loss @ 53.75

chart:

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


Medtronic, Inc. - MDT - close: 57.27 change: +0.01

Stop Loss: 56.45
Target(s): 59.75
Current Option Gain/Loss: - 8.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
11/04/13: MDT hit our stop loss today. Something happened before the opening bell and shares of MDT gapped down this morning. Unfortunately, I can't find any news to explain the relative weakness. MDT quickly rebounded and closed virtually unchanged on the session. It's probably no coincidence that the low today just happens to be our stop loss at $56.45.

- Suggested Positions -

NOV $55 call (MDT1316K55) entry $2.07 exit $1.90*(-8.2%)

11/04/13 stopped out
*option exit price is an estimate since the option did not trade at the time our play was closed.
10/29/13 new stop loss @ 56.45

chart:

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


CLOSED BEARISH PLAYS

Union Pacific Corp. - UNP - close: 153.76 change: +0.99

Stop Loss: 151.55
Target(s): 141.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
11/04/13: The bounce in UNP continues with shares now up four days in a row. Many of UNP's peers are looking a lot healthier and UNP could be trying to catch up. Our trade has not opened yet so we're removing UNP as a candidate.

Trade did not open.

11/04/13 removed from the newsletter. Trigger was $148.00

chart:

Entry on October -- at $---.--
Average Daily Volume = 2.7 million
Listed on October 30, 2013