Current Portfolio:

CALL Play Updates


ConocoPhillips - COP - close 53.66 change -1.39 stop 52.30 *NEW

Target(s): 56.65, 57.50, 58.25
Key Support/Resistance Areas: 58.50, 57.00, 53.00 to 53.50
Current Gain/Loss: -18%
Time Frame: 1 to 3 weeks
New Positions: Yes

9/7: We are long November COP calls as the stock hit our trigger in early trading. Oil sold off today on the back of a better than +1% rally in the US Dollar. We are going to be right or right out of this trade. COP is sitting on its 50-day SMA and also has solid support down to $53.00. If this support is broken we'll step aside. New positions can be opened with a tight stops below. Our official stop has been lowered just underneath the 200-day SMA.

9/4: Whether you believe the economy is improving or not, Oil companies should do well with the slimmest prospects of economic growth. Even if that growth is at a slower pace at least it is not a contracting scenario we've been dealing with throughout August. Technically, COP has made a series of higher lows and is now above all of its moving averages. I would like to see some retracement of last weeks gains which I think will be bought. I suggest readers initiate long positions on weakness in the stock, using a trigger of $54.70 which is near Friday's lows and above the 20-day SMA. More nimble traders could consider buying a breakout over Friday's highs or wait for a larger retracement to the $54.00 area. But I'm not so sure we are going to get it prior to the stock advancing higher. I am looking for a $2 to $3 move higher and if triggered our profit projection for the first two targets is +55% and +80%. Our stop is $52.85.

Suggested Position: Buy November $57.50 CALL, entry was at $1.05

Entry on September xx
Earnings 10/28/2010 (unconfirmed)
Average Daily Volume: 8.9 million
Listed on September 4, 2010

Int'l Business Machines - IBM - close 125.95 change -1.63 stop 121.90

Target(s): 127.75, 129.90
Key Support/Resistance Areas: 132.00, 128.00, 127,00, 123.00
Current Gain/Loss: +0%
Time Frame: 1 to 2 weeks
New Positions: Yes

9/7: IBM closed near Friday's lows which was a gap higher from Thursday. If the stock does not bounce here it could be headed to $124.60 area. New positions can be considered now or on any further weakness.

9/4: Today's gain in IBM takes some of the sting out of our loss in AAPL. IBM is approaching our first target of $127.75 but we my experience a pullback early this week. Any pullback to the $126.50 to $126.25 area could be considered for new positions. However, if IBM goes higher first I suggest being quick to take profits.

9/2: We are long IBM calls as our $125.25 entry was triggered. IBM traded within yesterday's range so there is not much report. Tomorrow's employment has the potential to hurt or help us. If the report is bad and the market sells off readers may want to consider placing a tighter stop in the $123.80 area.

Current Position: Long October $130.00 CALL, entry was $1.50

Entry on September 1, 2010
Earnings 10/18/2010 (unconfirmed)
Average Daily Volume: 5.5 million
Listed on August 28, 2010

NVIDIA Corp. - NVDA - close 9.99 change +0.09 stop 9.15

Target(s): 10.75, 11.35, 11.80
Key Support/Resistance Areas: 11.85, 11.45, 11.00, 10.25, 9.45
Time Frame: 1 to 2 weeks

9/7: We are waiting to be triggered in NVDA. The stock closed above its 50-day SMA for the first time since 4/15. If the market rebounds tomorrow we will most likely get triggered on the breakout.

9/4: In my opinion the odds of the broader market going higher are greater than it going lower, although there will probably be a pullback so the bulls can regain their energy. As such, I think NVDA can be bought and I suggest readers initiate long positions using a trigger of $9.72 (just above the 20-day SMA and today's low) or a breakout at $10.30 (above the 8/23 high). Ideally, it would be nice to get the lower price as I have been advocating in recent updates but either has the potential to produce a nice winning trade. Our new stop will be $9.15 initially. I've updated the targets and the play release from 8/28.

9/1 & 9/2: More nimble traders may want to consider bullish positions in NVDA now as the stock is almost 7% below our plan to buy it on a breakout. Officially we will wait for the breakout but if that doesn't happen in soon the play will most likely be dropped.

Suggested Position: Buy October $10.00 CALL with a trigger of $9.72 or $10.30, current ask $0.54

Entry on August xx
Earnings 11/4/2010 (unconfirmed)
Average Daily Volume: 23.5 million
Listed on August 28, 2010

Rackspace Hosting, Inc - RAX - close 20.07 change -0.72 stop 17.95

Target(s): 20.75(hit), 21.30, 23.00
Key Support/Resistance Areas: 23.50, 21.40, 20.00, 19.50, 19.00, 18.00
Current Gain/Loss: +7%
Time Frame: 3 to 5 weeks
New Positions: Yes

9/7: RAX drifted lower all day and broke an intraday trend line. However, RAX closed above the pivotal $20.00 support level and also has all of its major moving averages below. New positions can be considered now, especially on any further weakness. The next level of support below $20.00 is near $19.50.

9/4: RAX consolidated gains today and finished relatively flat after selling off early in the session. New positions can be considered on pullbacks. I've added a $21.95 target and I think this will get hit later this week after a possible dip early.

9/2: This marks the second time our first target has been hit. My comments from remain the same. Also, if tomorrow's employment report is bad readers should consider closing positions.

Current Position: Buy December $21.00 CALL, entry was at $1.40

Entry on August 25, 2010
Earnings 11/9/2010 (unconfirmed)
Average Daily Volume: 1.75 million
Listed on August 25, 2010

Stillwater Mining - SWC - close 14.73 change -0.55 stop 13.55 *NEW*

Target(s): 16.30, 16.95, 17.65
Key Support/Resistance Areas: 14.40 to 14.70
Current Gain/Loss: -16%
Time Frame: 1 to 3 weeks
New Positions: Yes

9/7: SWC sold off and closed its gap higher from Thursday to Friday. The stock closed above its key support level of $14.40 to $14.70 and is maintaining an upward trend line since 8/25. New positions can be considered at current levels. I've moved the stop to just below the 20-day SMA.

9/4: We are long SWC as of today's open. The stock opened at our trigger and we are looking for a continued move higher. Readers may want to consider opening new positions on pullbacks, perhaps around $14.75. This would fill the gap higher today. Considering the impressive run in SWC over the past 4 days a pullback should be expected.

9/2: Industrial metals such as silver and palladium that SWC mines are in demand and prices are increasing. SWC has broken out and closed above a key pivot level in the $14.50 area. I suggest readers buy SWC calls if the stock trades to $15.05 which is above today's high of $14.98. If the broader market rallies on good a employment report tomorrow SWC should eventually trade up towards its 52 week highs. If the broader market sells off on a bad employment report we may consider entering at a lower price next week. There is a lot of support below. If triggered our initial stop will be $13.95.

Current Position: Long October $15.00 CALL, entry was at $1.20

Entry on September 3, 2010
Earnings 11/4/2010 (unconfirmed)
Average Daily Volume: 1.62 million
Listed on September 2, 2010

PUT Play Updates

Abercrombie & Fitch - ANF - close 34.57 change -1.12 stop 36.20 *NEW*

Target(s): 35.05 (hit), 34.60 (hit), 34.05, 33.25
Key Support/Resistance Areas: 38.20, 37.25, 32.75, 34.00, 30.50
Current Gain/Loss: -13%
Time Frame: Several weeks
New Positions: No

9/7: I've lowered the stop in ANF to $36.20 and added a target of $33.25. I suggest readers continue to use weakness to close positions or tighten stops. 9/4: My comments from below remain valid. Sellers stepped in again when ANF tried to move higher and the stock closed near its lows. The chart looks terrible but ANF should benefit from a strong broader market so I urge readers to be cautious. We don't want to be swimming against the current. I'm expecting some market weakness early this week and suggest readers use it to tighten stops or close positions to protect capital. I've narrowed the targets significantly.

9/2: There is obviously a big seller of ANF which makes me think the sell-off could continue in the stock. However, tomorrow is a wild card so I urge readers to be cautious with positions if the broader market rally continues. I've tightened the stop and adjusted the targets.

Current Position: Long October $34.00 PUT, entry was at $2.10

Entry on August 25, 2010
Earnings: 11/11/10 (unconfirmed)
Average Daily Volume: 3.5 million
Listed on August 24, 2010

United Technologies - UTX - close 67.98 change -0.28 stop 69.11

Target(s): 67.65, 67.05, 66.40
Key Support/Resistance Areas: 69.00, 68.50 67.50, 66.50, 64.75,
Current Gain/Loss: -29% Time Frame: 1 to 2 weeks
New Positions: No

9/7: UTX came within 2 cents of our immediate target in early trading. My comments from below remain the same. I'm suggesting we use weakness to close positions or tighten stops to protect capital.

9/4: UTX closed just below its 20-day and 50-day SMA's. I'm expecting the stock to turn back lower here but I don't think the selling will last long so I suggest readers begin to look for a exit. We have to respect this week's turnaround in the market and use weakness to close positions, even if that means a loss. I've provided three near term targets readers should use to consider closing positions or tightening stops as they approach.

9/1: We got filled at the higher trigger in UTX so we are now long October $65 puts for $1.60. Considering the turnaround in equities today I suggest readers use caution in this position. I've narrowed the targets to account for the higher fill and suggest readers consider taking profits or tightening stops to protect them at these levels.

8/31: A strengthening US dollar is bad for multinational companies who derive income from abroad. After a sell-off in the dollar over the past couple of months it looks poised to break out higher and UTX looks poised to break down lower. The plan is to short UTX if it breaks down to $64.50 but I would also suggest shorting UTX if it trades up to close the gap from 8/24 at $67.00. If we get filled at the higher price our stop will be $69.11. If we get filled at the lower price our stop will $67.61.

Current Position: Long October $65.00 PUT, entry was at $1.60

Entry on September 1, 2010
Earnings: 10/20/10 (unconfirmed)
Average Daily Volume: 4.4 million
Listed on August 31, 2010


NUCOR Corp. - NUE - close 39.38 change +0.70 stop 39.25

Target(s): 38.35, 38.10, 37.60, 36.05 (hit),
Key Support/Resistance Areas: 43.00, 40.30, 37.00, 35.00
Option Current Gain/Loss: -53.1%
Time Frame: 4 to 6 weeks
New Positions: No

9/7: Steel stocks surged higher today on takeover speculation for US Steel. Many steel stocks benefited from the news and NUE hit our stop in early trading after coming within 7 cents of our immediate exit target. We are flat the position for a loss. Implied volatility increased so our option premium didn't suffer as much I thought it would. My comments below remain valid for readers who may still have positions.

9/4: It is time to look for an exit in NUE. After the stock hit our first target of $36.05 on 8/25 it has surged +8%. We have to respect this move and step aside if our stop is hit. More aggressive traders may want to consider a looser stop up near $41 but if NUE marches higher before a pullback your option premium will get crushed. Our official stop is above the 50-day SMA which is where NUE closed on Friday. In addition, NUE has broken and closed above a trend line from May (see dashed line) and is sitting just underneath a secondary trend line from 6/14. This is natural spot for NUE to retrace some of the recent gains which is when I suggest looking for an exit. I have provided three near term targets to consider. Be ready to protect capital on pullback because it could come quick.

9/2: My comments below remain the same. I've adjusted the immediate target and tightened the stop, which is above the 50-day and downtrend line. This is the place for pullback but if we don't get it NUE could breakout higher so I suggest getting out of the way and protecting capital.

9/1: I've added a $37.40 as a target and suggest readers begin to look for an exit in NUE. The stock's 20-day, 50-day, and downtrend line are all just overhead which should provide a pullback and exit point, even it is a loss.

Closed Position: Long October $35.00 PUT at $0.45, entry was at $0.96

Annotated Chart:

Entry on August 20, 2010
Earnings Date 10/21/10
Average Daily Volume 2.9 million
Listed on August 19, 2010