Editor's Note:

Shares of CNQR will be a big winner tomorrow after SAP announced they were buying the company for $129.00 a share.

FLT hit our bullish entry point.


Current Portfolio:


CALL Play Updates

Amgen Inc. - AMGN - close: 142.02 change: +1.31

Stop Loss: 135.90
Target(s): To Be Determined
Current Option Gain/Loss: +10.6%
Average Daily Volume = 3.0 million
Entry on September 17 at $140.25
Listed on September 08, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/18/14: Traders jumped on the dip in AMGN near $140 and shares rebounded to a new high. More conservative investors may want to start adjusting their stops higher.

Earlier Comments: September 8, 2014:
Biotech stocks have been leading the market higher this year. The BTK biotech index is up +32.5% year to date. The IBB biotech ETF is up +19.1%. AMGN is up +20.8% versus the S&P 500's +8% gain in 2014.

The company describes itself as focusing "on areas of high unmet medical need and leverages its biologics manufacturing expertise to strive for solutions that improve health outcomes and dramatically improve people's lives. A biotechnology pioneer since 1980, Amgen has grown to be the world's largest independent biotechnology company, has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential."

They are one of the first major biotech firms to go public. Today the California-based company has grown to 20,000 employees with a presense in more than 75 countries. Annual revenues are set to hit $19.5 billion this year. The company invests near $4 billion in R&D every year. AMGN has is a combination of mature drugs and a new stable of treatments working through their pipeline.

The company recently received good news after the FDA granted priority review to AMGN's Ivabradine treatment for chronic heart failure. Wall Street is also eager for AMGN's new cholesterol drug, which could be its next multi-billion blockbuster. This new cholesterol drug, Evolocumab, is a PCSK9 inhibitor to lower LDL cholesterol for patients that can't use statin drugs. AMGN recently filed some key regulatory paperwork with the FDA as it races against rival Regeneron to be the first mover in this new field of cholesterol treatments.

Enthusiasm for AMGN's new pipeline should continue. In addition to Evolocumab and Ivabradine, AMGN should see progress on Kyprolis, Talimogene laherparepvec, Blinatumomab, Trebananib, Brodalumab, and AMG 416 in the next six months.

The company's last earnings report was better than expected. AMGN reported on July 29th. Wall Street was looking for earnings of $2.07 a share on revenues of $4.9 billion. The company reported $2.37 a share with revenues up +10.7% to $5.18 billion. Management also guided higher and raised estimates for 2014 earnings growth and revenue growth. Several analysts have raised their price targets and the point & figure chart is bullish and currently forecasting at $152 target.

Tonight we're suggesting a trigger to buy calls at $140.25.

- Suggested Positions -

Buy the 2015 Jan $150 call (AMGN150117C150) entry $3.30*

09/17/14 triggered @ 140.25
*option entry price is an estimate since the option did not trade at the time our play was opened.
Option Format: symbol-year-month-day-call-strike


Concur Technologies - CNQR - close: 107.80 change: +0.33

Stop Loss: 104.90
Target(s): To Be Determined
Current Option Gain/Loss: +54.4%
Average Daily Volume = 576 thousand
Entry on August 19 at $100.50
Listed on August 16, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/18/14: Great news! I was starting to worry about CNQR. The stock underperformed the market yet again today. Then news broke that CNQR is being acquired.

SAP has agreed to purchase CNQR for $8.3 billion. That's $129 per share. CNQR stock should gap higher tomorrow. It's currently trading near $129.35 after hours.

I am suggesting we exit positions at the opening bell tomorrow morning with the requirement that CNQR is trading above $128.00.

- Suggested Positions -

Long NOV $105 call (CNQR141122C105) entry $5.05*

09/18/14 CNQR to be acquired by SAP for $129 a share. Stock should gap open near $129.00 on Friday morning.
Prepare to exit on Friday (see details above)
09/17/14 CNQR looks vulnerable here. Traders may want to take profits
09/03/14 new stop @ 104.90
08/27/14 CNQR is not moving. Investors may want to exit now. We are moving the stop loss up to $98.40
08/19/14 triggered @ 100.50
*option entry price is an estimate since the option did not trade at the time our play was opened.
Option Format: symbol-year-month-day-call-strike


Tableau Software, Inc. - DATA - close: 72.04 change: -0.96

Stop Loss: 69.75
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 1.5 million
Entry on September -- at $---.--
Listed on September 16, 2014
Time Frame: 4 to 12 weeks
New Positions: Yes, see below

Comments:
09/18/14: I am surprised that DATA did not participate in the market's rally today. Shares underperformed with a -1.3% decline. Currently we're suggesting a trigger to buy calls at $74.25. Nimble traders may want to consider buying a bounce from the $70.00 level instead.

Earlier Comments: September 16, 2014:
"Put together an Academy Award-winning professor, a brilliant computer scientist at the world's most prestigious university, and a savvy business leader with a passion for data. Add in one of the most challenging problems in software - making databases and spreadsheets understandable to ordinary people. You have just recreated the fundamental ingredients for Tableau's products." That's how DATA introduces itself on the company website.

"Tableau Software helps people see and understand data. Tableau helps anyone quickly analyze, visualize and share information. More than 21,000 customer accounts get rapid results with Tableau in the office and on-the-go. And tens of thousands of people use Tableau Public to share data in their blogs and websites."

The company's business is growing. Back in May this year the company reported earnings that beat estimates on both the top and bottom line. Management then raised their guidance. They did it again in July. DATA reported its Q2 results on July 31st. Analysts were expecting a loss of $0.04 a share on revenues of $79.4 million. DATA delivered a profit of $0.05 with revenues soaring +81.8% to $90.7 million.

According to the company's earnings release they saw license revenues up +80% year over year to $60.4 million. They added over 2,200 new customers, which surpassed their four-quarter average of 1,650. They also closed 157 deals worth more than $100,00 each, which is a +96% increase from a year ago. Management then raised their 2014 revenue guidance well above Wall Street's estimates.

On September 16th a Credit Suisse analyst adjusted their rating from "neutral" to "outperform" and bumped their DATA price target from $87.50 to $100 thanks to the company's technology advantage and strong international sales. The point & figure chart is eve more positive with a $119.00 target.

Bears should be worried, The recent breakout past technical resistance at its simple 200-dma is bullish. Traders just bought the dip near this moving average today. The most recent data listed short interest at 11% of the small 41.1 million share float. That might be enough to spark some short squeezes.

Tonight we're suggesting a trigger to buy calls at $74.25. I'm listing both the October calls and the 2015 January calls. Which one depends on your time frame.

Trigger @ $74.25

- Suggested Positions -

Buy the OCT $75 call (DATA141018C75)

- or -

Buy the 2015 Jan $80 call (DATA150117C80)

Option Format: symbol-year-month-day-call-strike


F5 Networks, Inc. - FFIV - close: 127.64 change: +2.20

Stop Loss: 121.95
Target(s): To Be Determined
Current Option Gain/Loss: - 1.4%
Average Daily Volume = 855 thousand
Entry on September 11 at $126.25
Listed on September 10, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/18/14: FFIV displayed relative strength today with a +1.75% gain. The stock has rallied to new two-year highs.

Earlier Comments: September 10, 2014:
Shares of FFIV did not enjoy the same rally the rest of the market did back in 2013. This year they're playing catch up with their stock up +35.4% versus the +8% rally in the S&P 500. Who is FFIV? According to a company press release:

"F5 provides solutions for an application world. F5 helps organizations seamlessly scale cloud, data center, and software defined networking (SDN) deployments to successfully deliver applications to anyone, anywhere, at any time. F5 solutions broaden the reach of IT through an open, extensible framework and a rich partner ecosystem of leading technology and data center orchestration vendors. This approach lets customers pursue the infrastructure model that best fits their needs over time. The world's largest businesses, service providers, government entities, and consumer brands rely on F5 to stay ahead of cloud, security, and mobility trends."

Just a few months ago FFIV strengthened their security services by buying Defense.net Inc. "a privately-held provider of cloud-based security services for protecting data centers and Internet applications from distributed denial-of-service (DDoS) attacks. The advanced technologies and operational experience shared between the two companies will expand F5's portfolio of security solutions for defense against Internet-based DDoS attacks on networks, data centers, and applications."

One reason the stock has been performing better this year is the earnings picture. Back in April when FFIV reported its Q2 numbers the company beat analysts expectations with revenues rising almost 20% from the year before. Management raised their EPS and revenue guidance.

They did it again in their last report. FFIV reported its Q3 results on July 23rd. Analysts were expecting a profit of $1.35 a share on revenues of $435 million. FFIV delivered a profit of $1.39 with revenues up +18.9% to $440.3 million. FFIV management raised their 2014 EPS and revenue estimates again.

John McAdam, F5 president and chief executive office, commented on their Q3 results. McAdam said,

"F5's solid gains in Q3 were driven by strong growth in product revenue, up 5 percent sequentially and 20 percent year-over-year... Growing demand for our expanding array of systems and application services was fueled by increasing awareness and uptake of our security offerings and the appeal of our Good, Better, Best pricing options. During the quarter, sales of Good, Better, Best bundles grew 49 percent from the prior quarter and contributed to a significant increase in sales of software products and of security solutions in particular. Sales were generally solid across all geographic regions and vertical market segments, with the exception of Japan."

These results sparked new upgrades from the analyst community. The Point & Figure chart is bullish and forecasting at $144 target.

The recent high is near $126.00. We are suggesting a trigger to buy calls at $126.25. We are listing the October calls. Investors may want to consider the 2015 January calls instead.

- Suggested Positions -

Long OCT $130 call (FFIV141018C130) entry $2.68*

09/11/14 triggered @ 126.25
Option Format: symbol-year-month-day-call-strike


FleetCor Technologies - FLT - close: 144.54 change: -0.16

Stop Loss: 139.75
Target(s): To Be Determined
Current Option Gain/Loss: -12.5%
Average Daily Volume = 564 thousand
Entry on September 18 at $145.55
Listed on September 17, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/18/14: A midday surge pushed FLT to our suggested entry point at $145.55. The stock did reverse its gains by the close, which is surprising. Traders may want to wait for another rally past $145.50 before initiating new positions.

Earlier Comments: September 18, 2014:
Tonight's candidate is in the business services industry. They have over 5,000 employees. They do business in 43 countries. The annual revenue is $1.0 billion. Who are they? It's FLEETCOR (FLT).

According to the company website, "FLEETCOR serves over 500,000 commercial accounts with millions of cardholders across the United States, Canada, Mexico, Europe, Africa and Asia. FLEETCOR manages relationships with more than 800 partners, ranging in size from major oil companies to small petroleum marketers with a single fueling location. We provide services ranging from transaction processing to full program management. Our platforms, programs and infrastructure are both adaptable and scalable, allowing us to fulfill the requirements of a broad range of partners."

The stock has been a winner for investors with shares up from $25 at their 2011 lows to almost $150 last month. Their most recent earnings report was July 31st. Wall Street was expecting a profit of $1.25 a share on revenues of $273.8 million. FLT delivered $1.27 a share with revenues up +23.8% to $273.5 million. More importantly management raised their 2014 EPS and revenue guidance.

As a matter of fact, according to The Street we have seen FLT beat Wall Street estimates and raise guidance 14 quarters in a row!

Another interesting headline is FLT's recent announcement to buy Comdata for $3.45 billion. Comdata is a payments processing company. One analyst at The Street.com pointed out that FLT has an excellent track record with its acquisitions. According to the analyst, FLT acquires companies, strips out inefficiencies, then doubles their profitability within two years. If that wasn't impressive enough FLT has done this with all 60 acquisitions to date ( credit to Jack Mohr for the research).

Technically the trend is up. The recent pullback from its August highs is an entry point. FLT has found support in the $140 area and now investors have started to buy the dip.

Today's intraday high was $145.35. I'm suggesting a trigger to buy calls at $145.55. We are not setting a target tonight but I will point out that the point & figure chart is bullish and forecasting at long-term $190 target.

- Suggested Positions -

Long NOV $150 call (FLT141122C150) entry $4.95*

09/18/14 triggered @ 145.55
*option entry price is an estimate since the option did not trade at the time our play was opened.
Option Format: symbol-year-month-day-call-strike


Lockheed Martin - LMT - close: 179.57 change: +0.77

Stop Loss: 169.75
Target(s): To Be Determined
Current Option Gain/Loss: +39.1%
Average Daily Volume = 1.1 million
Entry on September 08 at $175.55
Listed on September 06, 2014
Time Frame: 10 to 14 weeks
New Positions: see below

Comments:
09/18/14: LMT continued drift higher. Shares are nearing potential round-number resistance at the $180.00 mark.

Earlier Comments: September 6, 2014:
A few years ago the word "sequestration" was a buzzword in politics and the defense industry. The defense cuts were supposed to be so bad that it would force the democrats and republicans to work together and prevent the Budget Control Act of 2011 from becoming law. Well we all know how that worked out. Politics won and the budget cuts were enacted. The U.S. is supposed to be cutting $500 billion in defense spending from 2012-2021.

Yet these drastic cuts have not slowed the defense stock's performances. The group had a banner year in 2013 with big stock market gains. They continue to show leadership in 2014. Shares of LMT are up +17.4% in 2014 versus a +8.6% gain for the S&P 500.

According to a company press release LMT describes itself as, "Headquartered in Bethesda, Maryland, Lockheed Martin is a global security and aerospace company that employs approximately 113,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The Corporation’s net sales for 2013 were $45.4 billion."

The company has continued to capture a number of big government contracts including a $915 million deal to build a "space fence" for the U.S. Air Force.

It is worth noting that LMT is the U.S. government biggest defense contractor and just over 80% of LMT's revenues come from the U.S. government. The company is being proactive in trying to broaden their customer base and hope to achieve 20% of sales from outside the U.S. At the moment LMT already has sales in 70 different countries. The plan seems to be working with 25% of the company's backlog coming from international orders.

Many believe that LMT's F-35 joint strike fighter program will be a key revenue driver in the future. The F-35 Joint Strike Fighter (JSF) is already the world's most expensive weapons system with a price tag near $400 billion. Earlier this year the JSF program suffered a setback after its engines, built by a subcontractor, caught fire. LMT believes they have solved the engine problem and the JSF program is getting closer to completion with over 19,500 hours of flight time. LMT already has 11 countries planning to purchase the new F-35 JSF planes.

LMT's earnings have been strong in spite of the sequestration. Back in April they report their Q1 results that beat estimates. Wall Street expected a profit of $2.53 a share on revenues of $10.89 billion. LMT beat the bottom line estimate with $2.87 per share but missed the revenue estimate at $10.65 billion for the quarter. However, management gave an optimistic outlook and raised their 2014 guidance on both net profits and revenues. When LMT reported earnings again in July they deliver a profit of $2.76 a share on revenues of $11.31 billion. That beat Wall Street's estimate of $2.66 and revenues of $11.15 billion. Management raised their EPS guidance again. The company has beaten analysts estimates four quarters in a row.

The company is shareholder friendly with a strong stock buyback program and a dividend yield of 3.2%. The point & figure chart is bullish and forecasting at $200 price target. Tonight we're suggesting a trigger to buy calls at $175.55.

- Suggested Positions -

Long DEC $180 call (LMT141220C180) entry $3.45*

09/08/14 triggered @ 175.55
*option entry price is an estimate since the option did not trade at the time our play was opened.
Option Format: symbol-year-month-day-call-strike


Mallinckrodt Public Limited Co. - MNK - close: 87.70 change: +0.33

Stop Loss: 83.85
Target(s): To Be Determined
Current Option Gain/Loss: + 0.0%
Average Daily Volume = 4.85 million
Entry on September 17 at $87.25
Listed on September 11, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/18/14: MNK did not see a lot of movement today. The stock is poised for its sixth weekly gain in a row. I would still consider new positions now at current levels.

Earlier Comments: September 11, 2014:
MNK is considered a drug maker but the stock is outperforming its peers in both the drug industry and the biotech industry. The S&P 500 is up about +8% in 2014. The pharmaceutical index (DRG) is up +13.1%. The biotech index is up +34.8% thus far in 2014. Yet MNK is up +64.4%.

The company describes itself as "a global specialty pharmaceutical and medical imaging business that develops, manufactures, markets and distributes specialty pharmaceutical products and medical imaging agents."

"Areas of focus include analgesics and central nervous system drugs for prescribing by office- and hospital-based physicians, and autoimmune and rare disease specialty areas like neurology, rheumatology, nephrology and pulmonology. The company's core strengths include the acquisition and management of highly regulated raw materials; deep regulatory expertise; and specialized chemistry, formulation and manufacturing capabilities."

"The company's Specialty Pharmaceuticals segment includes branded and specialty generic drugs and active pharmaceutical ingredients, and the Global Medical Imaging segment includes contrast media and nuclear imaging agents. Mallinckrodt has more than 5,500 employees worldwide and a commercial presence in roughly 65 countries. The company's fiscal 2013 revenue totaled $2.2 billion."

The company had seen a few key milestones this year. They recently finished their $5.6 billion acquisition of Questcor. In August the stock was added to the S&P 500 index. MNK's earnings report in May was better than expected and management raised their guidance. Their latest earnings report was August 7th. Wall Street expected a profit of $0.85 a share on revenues of $610 million. MNK delivered a profit of $1.20 a share with revenues up +14.6% to $653 million. Management raised their guidance again for both their 2014 EPS and revenue estimates.

MNK's Chief Executive Officer and President, Mark Trudeau, commented on their quarterly results saying,

"This has been another exceptionally strong quarter in what is shaping up to be a very promising year for Mallinckrodt. This performance is being driven by the strength of our Specialty Pharmaceuticals segment in both Brands and Specialty Controlled Substance Generics, as well as streamlined costs from our on-going restructuring initiatives, leading to meaningful top-line and bottom-line growth. We continue to be pleased with the performance of our base business and recently added OFIRMEV, and look forward to closing the acquisition of Questcor in the coming weeks."

The current rally in MNK stock has lifted shares to all-time highs. The September 5th move looked like a potential bearish reversal yet there was no follow through lower. Instead MNK has been consolidating sideways. If shares continue to march higher it could spark some short covering. The most recent data listed short interest at 29.3% of the small 53.9 million share float.

We are not setting a target tonight but the point & figure chart is forecasting at $90.00 target. We are suggesting a trigger to buy calls at $87.25.

*consider smaller positions* - Suggested Positions -

Long OCT $90 call (MNK141018C90) entry $3.00*

09/17/14 triggered @ 87.25
Option Format: symbol-year-month-day-call-strike


Nike, Inc. - NKE - close: 81.97 change: +0.46

Stop Loss: 79.40
Target(s): To Be Determined
Current Option Gain/Loss: +23.0%
Average Daily Volume = 2.8 million
Entry on September 05 at $80.50
Listed on September 04, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/18/14: NKE is still trading inside the $81-82 zone but the stock is showing some strength and looks poised to move higher.

Earlier Comments: September 4, 2014:
Nike made headlines earlier this week when there was a bit of a bidding war for NBA star Kevin Durant. Durant's endorsement contract with NKE was coming to an end and rival Under Armour (UA) was trying to steal Durant away from NKE with a $200 million deal. In the end NKE outbid its rival and offered the 25-year old Durant a $300 million deal over the next ten years. Some of suggested that it could be worth a total of $350 million over the next 20 years. While I personally find numbers like these outrageous it's pocket change for NKE, which is sitting on $5.14 billion in cash and brings in a net profit of $2.7 billion a year on revenues of almost $28 billion annually.

Meanwhile the winds of fashion seem to be blowing in NKE's favor. There's a new trend being called "athleisure" where activewear and fashion intersect. Last year apparel sales fell -1%. Yet sales of activewear rose +7%. The activewear market now accounts for 16% of the U.S. market and has grown to almost $34 billion.

NKE's most recent earnings report was better than expected. Wall Street was looking for a profit of $0.75 on revenues of $7.34 billion. The company beat estimates with $0.78 on revenues of $7.42 billion. Gross margins improved 170 basis points to 45.6 percent. Management reported that they spent $912 million on buying back 12.3 million shares of stock last quarter as part of their $8 billion stock buyback program.

Technically shares of NKE have been stuck under major resistance at the $80.00 level since December 2013. Investors have been slowing buying the dips and now the stock looks poised to breakout past resistance. The point & figure chart is bullish and currently forecasting at $98 target.

Tonight I'm suggesting a trigger to buy calls at $80.50. Shares of NKE do not move super fast so we'll use the 2015 January calls.

- Suggested Positions -

Long 2015 Jan $85 call (NKE150117C85) entry $1.95*

09/16/14 new stop @ 79.40
09/05/14 triggered @ 80.50
Option Format: symbol-year-month-day-call-strike


Northrop Gruman - NOC - close: 132.44 change: -0.13

Stop Loss: 127.45
Target(s): To Be Determined
Current Option Gain/Loss: +26.3%
Average Daily Volume = 870 thousand
Entry on September 15 at $130.55
Listed on September 13, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/18/14: NOC encountered a little profit taking. Yet shares found support near $132.00 for the second day in a row.

Earlier Comments: September 13, 2014:
One might have assumed that when Washington politics cut $500 billion from the U.S. defense budget over the 2012-2021 time frame it would have been bearish for defense sector stocks. Yet the group has been an outperformer in the stock market and delivered amazing gains last year. The defense-related juggernauts like NOC continue to perform well in 2014.

According to their company website, "Northrop Grumman is a leading global security company providing innovative systems, products and solutions in unmanned systems, cyber, C4ISR, and logistics and modernization to government and commercial customers worldwide." What does that mean? It means NOC makes bombers, unmanned drones, cyber security solutions, and logistics. If you're curious, C4ISR stands for command, control, communications, computers, intelligence, surveillance, and reconnaissance.

The fact that the world seems to be growing more dangerous, not less dangerous, should be a bullish undercurrent that lifts the defense sector. NOC should benefit because the American public does not have the stomach for another war. That means the U.S. will use more and more unmanned technology like NOC's drones.

The company has been performing well this year and NOC has raised guidance the last three quarters in a row. NOC's most recent earnings report was July 23rd. Wall Street was looking for a profit of $2.22 a share on revenues of $5.97 billion. NOC delivered $2.37 a share with revenues hitting $6.04 billion. Management then raised their EPS guidance and revenue guidance for 2014. NOC's backlog is currently at $35.6 billion.

Technically shares have a bullish trend of higher lows that just recently blossomed into a breakout to new all-time highs. NOC is testing the $130.00 level. At the moment the point & figure chart is bullish with a $158.00 target.

Tonight we're suggesting a trigger to buy calls at $130.55.

- Suggested Positions -

Long NOV $135 call (NOC141122C135) entry $1.82*

09/15/14 triggered @ 130.55
*option entry price is an estimate since the option did not trade at the time our play was opened.
Option Format: symbol-year-month-day-call-strike


Splunk, Inc. - SPLK - close: 56.25 change: -0.11

Stop Loss: 53.95
Target(s): To Be Determined
Current Option Gain/Loss: -20.0%
Average Daily Volume = 4.3 million
Entry on September 17 at $57.25
Listed on September 13, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/18/14: I am growing concerned with our new SPLK trade. Shares underperformed the market today. I'm not suggesting new positions. More conservative investors may want to adjust their stops higher.

Earlier Comments: September 13, 2014:
Based in San Francisco, SPLK is cashing in on corporations' desire to analyze the massive amounts of "big data" out there. The last several months have been a bumpy ride for SPLI shareholders. If you recall back in March this year all the big growth and momentum stocks were hit hard with widespread selling. The correction in SPLK lasted longer than the broader market. Shares were cut in half with a drop from $93 to $40 by its June lows. Now shares have started to recover, up nearly 50% from its 2014 lows.

Who is SPLK? According to the company website, "Splunk was founded to pursue a disruptive new vision: make machine data accessible, usable and valuable to everyone. Machine data is one of the fastest growing and most pervasive segments of 'big data'—generated by websites, applications, servers, networks, mobile devices and all the sensors and RFID assets that produce data every second of every day. By monitoring and analyzing everything from customer clickstreams and transactions to network activity and call records—and more—Splunk turns machine data into valuable insights no matter what business you're in. It's what we call Operational Intelligence. Since first shipping its software in 2006, Splunk now has over 7,900 customers in 100 countries."

Earnings have been improving. Their earnings report in May saw SPLK beat estimates on both the top and bottom line. SPLK management guided higher for the second quarter. They did it again in their latest earnings report. The company added more than 500 new customers in the latest quarter. SPLK reported earnings on August 28th. Wall Street expected a loss of $0.02 a share on revenues of $93.82 million. SPLK delivered a profit of $0.01 a share with revenues soaring +51.7% to $101.5 million. Management then raised their guidance for the third quarter and fiscal year 2015.

The stock soared following its late August earnings news with a rally from $45 to $60 in a couple of days. Since then SPLK has been digesting its gains and consolidating sideways just below resistance near $60.00 and its simple 300-dma. The big reversal higher has created a buy signal on the point & figure chart that is forecasting a long-term $99.00 target.

This stock can be volatile so I do consider it a higher-risk, more aggressive trade. The high last week was $61.36. We are suggesting a trigger to buy calls at $61.55. More conservative investors may want to wait for shares of SPLK to close above potential technical resistance at its simple 200-dma (currently at $62.38) before initiating bullish positions.

*smaller positions, higher risk* Suggested Positions -

Long NOV $60 call (SPLK141122C60) entry $4.25*

09/17/14 triggered @ 57.25
*option entry price is an estimate since the option did not trade at the time our play was opened.
09/15/14 Strategy update: Change the entry point trigger from $61.55 to $57.25 and change the stop loss from $57.90 to $53.95
Adjust the strike price from Nov. $65 to Nov $60 call
Option Format: symbol-year-month-day-call-strike


Union Pacific Corp. - UNP - close: 109.40 change: -0.18

Stop Loss: 105.90
Target(s): To Be Determined
Current Option Gain/Loss: +17.6%
Average Daily Volume = 2.5 million
Entry on September 17 at $108.25
Listed on September 16, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/18/14: UNP struggled with resistance near $110 and spent the rest of the day drifting sideways. If this stock pulls back we can look for a dip near $108.00 as an alternative entry point to buy calls.

Earlier Comments: September 16, 2014:
If you believe the U.S. economy is getting better then transports should perform well. Dow Theory suggests we can't have a significant rally without the transports. Thus far the group has shown leadership this year with the Dow Jones Transportation average up +15.1% in 2014. The railroads have been a strong part of that leadership.

UNP is one of the biggest. The company has been around for 150 plus years. They have over 46,000 employees, more than 8,200 locomotives, and pull nine million carloads a year.

According to the company website, "Union Pacific operates North America's premier railroad franchise, covering 23 states in the western two-thirds of the United States. Union Pacific serves many of the fastest-growing U.S. population centers, operates from all major West Coast and Gulf Coast ports to eastern gateways, connects with Canada's rail systems and is the only railroad serving all six major Mexico gateways. Union Pacific provides value to its roughly 10,000 customers by delivering products in a safe, reliable, fuel-efficient and environmentally responsible manner."

Believe it or not but the shale gas and shale oil energy boom in the U.S. has played a part in the railroad strength. U.S. energy production has soared with the Energy Information Administration reporting U.S. crude oil production at 8.5 million barrels a day in June. That's the highest production since July 1986. A lot of that crude oil gets moved by train.

Back in 2008 only 9,500 carloads a year were crude oil. Today that has surged to over 407,000 railcars of crude oil a year.

The railroad group continues to see strong traffic in 2014. The upcoming harvest will also put more demand on the railroads. American farmers are looking at a record-breaking crop this year.

Currently shares of UNP Have been consolidating sideways at all-time highs just under the $108.00 level. Tonight we're suggesting a trigger to buy calls at $108.25.

- Suggested Positions -

Long NOV $110 call (UNP141122C110) entry $2.15*

09/17/14 triggered @ 108.35, gap higher. Trigger was $108.25
*option entry price is an estimate since the option did not trade at the time our play was opened.
Option Format: symbol-year-month-day-call-strike




PUT Play Updates

Autoliv, Inc. - ALV - close: 99.59 change: +0.29

Stop Loss: 101.55
Target(s): To Be Determined
Current Option Gain/Loss: -45.4%
Average Daily Volume = 392 thousand
Entry on September 16 at $98.45
Listed on September 15, 2014
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/18/14: ALV's early morning rally failed at resistance near $100.00 again. Yet I would hesitate to launch new positions. Traders might want to wait for new relative lows before buying puts again.

Earlier Comments: September 15, 2014:
The auto part makers have been a bright spot in the market over the past year and a half or so. It looks like the group is starting to diverge. Stocks like DLPH, TRW, and LEA still look relatively strong. Yet BWA and ALV have broken down.

Who is ALV? According to their website, "For over 60 years, Autoliv has focused on one very important issue: saving lives. Our innovative products save 30,000 lives every year and prevent 10 times as many injuries. We are first and foremost a safety technology company. In the world of automotive occupant safety, we were the first to introduce the two- and three-point seat belt system and airbags for front and side impacts. We were also the first to launch pyrotechnic belt pretensioners and pedestrian protection systems. We develop, manufacture and market airbags, seatbelts, steering wheels, passive safety electronics and active safety systems such as radar, night vision and camera vision systems. We also produce anti-whiplash systems, pedestrian protection systems and integrated child seats. Autoliv Inc. is the result of a merger in 1997 of the Swedish company Autoliv AB, and the U.S. company Morton ASP."

Earnings momentum may have peaked. The company's most recent earnings report back in July was a miss. Wall Street expected a profit of $1.55 a share but ALV only delivered $1.45 with profits falling -2% from a year ago. Revenues did come in above expectations at $2.38 billion. Yet the sell-off on earnings may have started the current correction in ALV stock.

Technically shares look bearish. ALV produced a double top with the peaks in June and July. The bullish breakout past resistance near $104 in early September proved to be a bull trap. Now ALV is breaking support at its simple 200-dma and its long-term bullish trend (see weekly chart below).

Tonight we're suggesting a trigger to buy puts at $98.45.

- Suggested Positions -

Long OCT $95 PUT (ALV141018P95) entry $1.65*

09/16/14 triggered @ 98.45
Option Format: symbol-year-month-day-call-strike


Chart Industries - GTLS - close: 64.68 change: +0.32

Stop Loss: 68.75
Target(s): To Be Determined
Current Option Gain/Loss: -12.0%
Average Daily Volume = 617 thousand
Entry on August 29 at $65.60
Listed on August 28, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/18/14: GTLS is still consolidating sideways near $65.00. I am not suggesting new positions at this time. More conservative investors may want to lower their stop loss.

Earlier Comments: August 28, 2014:
If you have seen the 1986 movie Top Gun then you know that Tom Cruise's character "Maverick" and his RIO "Goose" fly through the jet wash of another aircraft and their plane enters a flat spin that Maverick is unable to pull out of. Spoiler - their plane crashes.

Both the stock price and the earnings results for GTLS appear to be in a flat spin that they cannot pull out of. According to the company website, "Chart Industries, Inc. is a leading independent global manufacturer of standard and custom engineered products and systems for a wide variety of cryogenic and gas processing applications. Our equipment is used in the production, storage, distribution and end-use of atmospheric and industrial gases as well as natural gas itself."

A growing portion of their business is natural gas. "Major equipment designed and manufactured by Chart is used in the liquefaction, distribution and storage of LNG, plus we also supply LNG fueling stations and vehicle fueling systems." Considering the huge surge of natural gas demand you might think GTLS business would be booming. Yet the company seems to be struggling.

Shares of GTLS delivered an amazing rally in 2013. That is until late October. GTLS reported earnings in late October 2013 that missed profits estimates, missed the revenue estimate and management lowered guidance. When GTLS reported earnings in February 2014 they missed estimates, missed the revenue number and lowered guidance. In April 2014 they missed estimates, missed the revenue number and lowered guidance. Are you seeing a trend here? Their latest earnings report was July 31st, 2014 and guess what? GTLS missed the EPS estimate, missed the revenue estimate, and lowered guidance.

Technically the oversold bounce from its August lows has completely reversed. Today is worth noting since GTLS has broken down to a new closing low for 2014. This trend will likely continue.

Today's intraday low was $65.70. I am suggesting a trigger to buy puts at $65.60.

- Suggested Positions -

Long OCT $65 PUT (GTLS141018P65) entry $2.50*

08/29/14 triggered @ 65.60
*option entry price is an estimate since the option did not trade at the time our play was opened.
Option Format: symbol-year-month-day-call-strike


Herbalife Ltd. - HLF - close: 45.66 change: +0.44

Stop Loss: 50.55
Target(s): To Be Determined
Current Option Gain/Loss: - 9.2%
Average Daily Volume = 1.5 million
Entry on September 09 at $47.90
Listed on September 08, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/18/14: The bounce in HLF managed to pierce the $46.00 level before rolling over again late this afternoon. I am not suggesting new bearish positions at this time.

Earlier Comments: September 8, 2014:
HLF calls itself a nutrition company. Most see it as a multi-level marketing firm. Its detractors would call HLF a pyramid scheme.

According to the company's website, "Herbalife is a global nutrition company that has been changing people’s lives with great products since 1980. Our nutrition, weight-management, energy and fitness and personal care products are available exclusively to and through dedicated Independent Herbalife Members in more than 90 countries. We are committed to addressing the global obesity epidemic by offering high-quality products, one-on-one coaching with an Herbalife Member and a community that inspires customers to live a healthy, active life. The company has over 7,400 employees worldwide, and its shares are traded on the New York Stock Exchange (NYSE: HLF) with net sales of $4.8 billion in 2013."

HLF's biggest opponent is influential hedge fund manager Bill Ackman. Ackman's Pershing Square Capital Management has famously bet $1 billion that HLF is an illegal pyramid scheme and once the facts come to light the government will shut it down. Unfortunately for Bill this is a fight he has been waging since late 2012. It has definitely generated a roller coaster ride in HLF's stock price.

Back in July Ackman promised to deliver a death blow to HLF in an over hyped presentation. Unfortunately, Wall Street failed to see the smoking gun and shares of HLF surged about 25% in one day. Yet there hasn't been any follow through. In fact shares of HLF have reversed and are trading near their 2014 lows.

The latest earnings report did not help. HLF reported earnings in late July and missed both the top and bottom line estimates. Management lowered their 2014 guidance. The company seems to be having trouble retaining their independent salesmen. At the same time there is a growing scrutiny of MLMs overseas, especially in big markets like China and India.

The stock is hovering above support near $48.00. A breakdown would look very bearish for HLF. The Point & Figure chart is already bearish and forecasting a $28.00 target. A drop under $48.00 would generate a new triple-bottom breakdown sell signal on the P&F chart.

I do want to caution investors that this should be considered a more aggressive, higher-risk trade due to the high amount of short interest. The most recent data listed short interest at 44% of the 60.0 million share float. I suggest limiting your position size to reduce risk.

(small positions) Suggested Positions -

Long Oct $45 PUT (HLF141018P45) entry $2.37

09/09/14 triggered @ $47.90
Option Format: symbol-year-month-day-call-strike


iShares Russell 2000 ETF - IWM - close: 115.43 change: +0.70

Stop Loss: 118.15
Target(s): To Be Determined
Current Option Gain/Loss: -25.5%
Average Daily Volume = 29.0 million
Entry on September 10 at $114.85
Listed on September 08, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/18/14: It can be tough on bearish trades with the S&P 500 and the Dow Industrials breaking out to new all-time highs.

I'm not suggesting new positions in the IWM at this time.

Earlier Comments: September 9, 2014:
The S&P 500 made it 14 days in a row without a move of more than 0.5% on a closing basis. Jonathan Krinsky at MKM Partners noted this occurrence yesterday. Krinsky said the last time we saw a streak this long was 1995. To find a streak longer than 14 days you have to go back to 1969, which saw a run of 20 days in a row. Today would have been the 15th day but stocks started to move and the direction was down. Small cap stocks were leading the way with the Russell 2000 falling -1.1% versus the -0.6% drop in the S&P 500.

Market watchers were blaming the rising dollar and new fears that the Federal Reserve might raise rates sooner than expected. There is speculation that the Fed might drop its "considerable time" guidance for low rates in its policy statement at the Fed meeting scheduled for next week.

Whatever the reason small caps look vulnerable and underperformed on above average volume today. We want to hedge our bullish bets with a put position on the IWM just in case the market does start to correct lower. Investors might be growing nervous about the 9/11 anniversary on Thursday. You could call this put a little 9/11 market insurance.

Tonight we are suggesting a trigger to buy puts at $114.85.

- Suggested Positions -

Long OCT $115 PUT (IWM141018P115) entry $2.70

09/10/14 triggered @ 114.85
Option Format: symbol-year-month-day-call-strike


Las Vegas Sands - LVS - close: 63.95 change: +1.57

Stop Loss: 64.65
Target(s): To Be Determined
Current Option Gain/Loss: + 62.6%
Average Daily Volume = 4.6 million
Entry on August 27 at $67.40
Listed on August 26, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/18/14: The oversold bounce in LVS continues and shares almost hit our stop loss at $64.65. The story has not changed for LVS (it's still bearish) so this is just a temporary move in the stock.

I am not suggesting new positions at this time.

Earlier Comments: August 26, 2014:
The high-speed growth in the world's biggest gambling hub is slowing down. Investors are taking notice. It used to be that when the world wanted to gamble the came to Las Vegas. Today the biggest gambling center in the world is Macau, a city in southern China.

LVS describes itself as "the world's leading developer and operator of Integrated Resorts. Our collection of Integrated Resorts in Asia and the United States feature state-of-the-art convention and exhibition facilities, premium accommodations, world-class gaming and entertainment, destination retail and dining including celebrity chef restaurants, and many other amenities." LVS has properties in Vegas, Pennsylvania, Singapore, and Macau.

Macau has been the major focus for casino companies the last few years. The coastal strip of Macau is the only place in China where gambling is legal. Forbes described Macau as "Vegas on steroids." Macau overtook Vegas as the world's biggest gambling center back in 2006 with Chinese tourists accounting for nearly 66% of its traffic.

After years of booming growth in Macau the area is facing a few hurdles. One of them is rising wage costs. Current laws force casino operators to hire locals. This has driven unemployment in Macau down to 1.7%. Employees are unhappy. They make less than half that their counterparts in Vegas make. There has been a number of demonstrations as casino workers demand higher wages. There is currently the threat of a labor strike on August 28th this year.

Macau is also suffering from an economic slowdown in China. The country has been slowing grinding down for years. China is still expected to grow more than +7% this year but that's a multi-year low. Another issue has been China's crackdown on corruption this year. This new pressure from Beijing has thrown a wet blanket on VIP traffic to Macau. Yet another challenge for Macau is growing competition from foreign destinations. Other countries are starting to add gambling resorts, which could pressure traffic to Macau.

Analysts have been adjusting their earnings and revenues estimates lower for the casino stocks. That's not surprising given the recent reports of slowing revenue numbers. Macau's gambling regulators said gross gaming revenues dropped -3.7% in June and -3.6% in July. Morgan Stanley just slashed their 2014 Macau estimates from +12% to +6%.

Technically shares of LVS are bearish. The stock has broken significant support near $70.00. The oversold bounce is starting to roll over under resistance. The point & figure chart is bearish and forecasting at $56.00 target.

Tonight we are suggesting a trigger to buy puts at $67.40.

- Suggested Positions -

Long OCT $65 PUT (LVS141018P65) entry $1.50*

09/06/14 new stop @ 64.65
09/02/14 new stop @ 68.25
08/27/14 triggered @ 67.40
*option entry price is an estimate since the option did not trade at the time our play was opened.
Option Format: symbol-year-month-day-call-strike


Pentair Plc - PNR - close: 67.69 change: +0.33

Stop Loss: 68.65
Target(s): To Be Determined
Current Option Gain/Loss: + 2.7%
Average Daily Volume = 2.0 million
Entry on August 26 at $68.90
Listed on August 23, 2014
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
09/18/14: PNR continues to churn sideways in the $67-68 region. I am not suggesting new positions at this time.

Earlier Comments: August 23, 2014:
Pentair is considered part of the industrial goods sector. They manufacture industrial equipment across the globe. According to the company website, "Pentair is a global water, fluid, thermal management, and equipment protection partner with industry leading products, services, and solutions. Pentair reports the performance of its business within four reporting segments that focus on five primary verticals."

Long-term the stock has had a strong 2012 and 2013 performance. The rally appears to have peaked in 2014 when the market started pulling back in March this year. If you recall many of the momentum names and higher-growth stocks were hammered lower starting in March. PNR doesn't really qualify as a big momentum name or a high-growth name but shares have been unable to recover anyway. Shares have trended lower from the March peak, currently down -16% from its 2014 highs and down -10.6% year to date.

PNR's earnings results have not helped the stock's performance. Back in April they beat estimates but missed the revenue number and then guided lower for the second quarter. Their most recent earnings report was July 31st. Depending whose estimate you use PNR either reported in-line profits or managed to just beat by a penny. Revenues disappointed again. PNR missed the revenue estimate with a -2.7% decline from a year ago to $1.91 billion. Management lowered guidance again but they also announced they were exiting their struggling water transport business.

PNR collapsed on this late July earnings news and lowered guidance with a drop toward $64. Shares have spent three weeks with an oversold bounce that is just now starting to roll over under resistance. PNR appears to have resistance near $70-71 and its 50-dma and 300-dma (see daily chart below). The point & figure chart is bearish and currently forecasting at $61 target.

Tonight we are suggesting a trigger to buy puts at $68.90.

- Suggested Positions -

Long Nov $70 PUT (PNR141122P70) entry $3.60*

09/06/14 new stop @ 68.65
08/26/14 triggered @ 68.90
Option Format: symbol-year-month-day-call-strike