Editor's Note:

Shares of Bank of America (BAC) have extended their gains and hit our bullish exit targets this past week.

Elsewhere we saw DFS hit our stop loss following a disappointing earnings report.

We added three new plays from our watch list (C, GLD, and JNPR).

We want to exit our 2013 calls on AIG immediately to lock in gains.


Closed Plays


BAC and DFS have been closed.


Play Updates


Adobe Systems - ADBE - close: 37.71

Comments:
12/22/12: It turned out to be a quiet week for shares of ADBE. The stock churned sideways, most of it inside the $37-38 zone. Technically ADBE eked out a gain for the week making this the fifth weekly gain in a row. I suspect ADBE remains short-term overbought here and would not be surprised to see a dip back toward $36 or even $35.

- Suggested Positions -
DEC 05, 2012 - entry price on ADBE @ 35.30, option @ 2.32
symbol:ADBE1418a40 2014 JAN $40 call - current bid/ask $ 3.15/ 3.30

12/15/12 new stop loss @ 33.75
12/13/12 ADBE reports earnings.

Current Target:$ 44.00
Current Stop loss: 33.75
Play Entered on: 12/05/12
Originally listed on the Watch List: 11/03/12


American Intl. Group - AIG - close: 34.74

Comments:
12/22/12: AIG is up for the week but for the most part shares have been consolidating sideways. If you look more closely it seems like AIG is churning sideways between resistance in the $35.75 area and its bullish trend of higher lows. Yet most of the momentum indicators are starting to roll over. It might be time to expect a new pullback in AIG. I would look for support in the $33.00-32.00 area. I am not suggesting new positions at this time.

Please note: that I am adjusting our exit strategy for the 2013 calls. Our 2013 Jan $30 calls expire in about a month. I am suggesting we go ahead and exit these calls now on Monday morning. I'd rather book a gain now than see it fade. We still have the 2014 call position.

Earlier Comments:
Our plan was to keep our initial position size small to limit our risk. We will plan on exiting our 2014 calls when shares hit $42.50.

- Suggested Positions - (small positions @ first)
May 18, 2012 - entry price on AIG @ 28.25, option @ 3.40
symbol: AIG1319A30 2013 JAN $30 call - current bid/ask $ 4.80/ 4.95

- or -

May 18, 2012 - entry price on AIG @ 28.25, option @ 4.20
symbol: AIG1418A35 2014 JAN $35 call - current bid/ask $ 4.70/ 4.85

12/22/12 Exit the 2013 calls immediately on Monday morning
current bid is at $4.80
12/15/12 readers may want to exit our 2013 calls now.
12/08/12 move the target for the 2013 calls to $37.00
11/02/12 AIG gapped down following its earnings report
10/06/12 adjusting our exit targets. Plan on exiting our 2013 calls when AIG hits $39.00. We'll exit our 2014 calls when AIG hits $42.50
09/08/12 Treasury has announced an $18 billion sale of AIG stock
08/18/12 new stop loss @ 29.45
06/16/12 new stop loss @ 26.95
05/18/12 triggered at $28.25
05/05/12 The U.S. government is planning to sell 164 million shares at $30.50 and AIG will probably gap down on this news.
Move the trigger down to $28.25, and move the stop loss to $25.75.
04/28/12 adjust buy-the-dip trigger to $30.00 and stop to $27.40

Current Target:$ 2013 call: $37.00, 2014 calls: $42.50
Current Stop loss: 29.45
Play Entered on: 05/18/12
Originally listed on the Watch List: 04/07/12


Citigroup - C - close: 39.49

Comments:
12/22/12: Citigroup is a watch list candidate that has graduated to our active trade list. Financial stocks continued to rally this past week and Citigroup broke out to new 2012 highs. Our plan was to wait for C to close above $38.50 and then buy calls the next day. Shares of C closed at $39.15 on Dec. 17th. Our trade opened on the 18th with Citigroup opening at $39.21 and our option opening at $3.02. I would still consider new positions now.

- Suggested Positions - (small positions)
DEC 18, 2012 - entry price on C @ 39.21, option @ 3.02
symbol: C1418a45 2014 JAN $45 call - current bid/ask $ 3.30/ 3.40

Chart of C:

Current Target:$ 47.50-50.00range
Current Stop loss: 34.65
Play Entered on: 12/18/12
Originally listed on the Watch List: 12/08/12


CONSOL Energy Inc. - CNX - close: 33.15

Comments:
12/22/12: The coal industry received some mixed news this past week. Coal demand across the globe is expected to rise 2.6% for the next six years in a row. Yet demand in the U.S. is expected to retreat. Shares of CNX produced a failed rally near $35.00 the next day. For the week the action in CNX looks like a potential top or a lower high. I remain very cautious here. I am not suggesting new positions at this time.

Earlier Comments:
We want to keep our position size small. Our long-term target is $42.50.

- Suggested Positions - (small positions)
NOV 09, 2012 - entry price on CNX @ 32.50, option @ 3.24
symbol: CNX1418a40 2014 JAN $40 call - current bid/ask $ 2.62/ 2.73

12/22/12 action this past week is potentially bearish. stay cautious!
12/02/12 readers may want to exit early now
11/09/12 triggered on a dip at $32.50
11/03/12 adjust the trigger down to $32.50, stop to $29.75
10/27/12 adjust the trigger down to $33.00

Current Target: $42.50
Current Stop loss: 29.75
Play Entered on: 11/09/12
Originally listed on the Watch List: 10/13/12


Cree, Inc. - CREE - close: 33.86

Comments:
12/22/12: Shares of CREE are virtually unchanged for the week. Yet the action on Friday with its close beneath $34 and its 10-dma is short-term bearish. I am still expecting a pullback, probably toward the $32-30 zone. I am not suggesting new positions at this time.

Thankfully the option bid/ask spread for our 2014 calls has narrowed significantly and is much more tradeable.

- Suggested Positions - (small positions)
NOV 01, 2012 - entry price on CREE @ 29.85, option @ 3.80
symbol:CREE1418a35 2014 JAN $35 call - current bid/ask $ 5.45/ 5.55

12/15/12 new stop loss @ 29.45
12/15/12 bid/ask spread on our 2014 calls is too wide!
12/02/12 new stop loss @ 28.45

Current Target:$ 39.00
Current Stop loss: 29.45
Play Entered on: 11/01/12
Originally listed on the Watch List: 10/20/12


Expedia Inc. - EXPE - close: 59.59

Comments:
12/22/12: The rally in EXPE ran out of gas midweek and the stock reversed. Then on Friday the big news was EXPE spending $628 million to buy a majority stake in a German hotel booking and search website Trivago. The acquisition news failed to have much impact on EXPE's stock.

I am reiterating my cautious comments from a week ago. EXPE still looks vulnerable here. At the moment I would wait for a close above $62.00 before considering new bullish positions.

Earlier Comments:
I would consider this a more aggressive, higher-risk trade because EXPE can be so volatile. We will want to keep our position size small to limit our risk.

- Suggested Positions -
NOV 29, 2012 - entry price on EXPE @ 61.84, option @ 6.00
symbol: EXPE1418a74.48 '14 JAN $74.48 call - current bid/ask $4.70/5.10

12/13/12 EXPE began trading ex-dividend (52cents). The option strike on our 2014 calls moved from $75.00 to $74.48.

Current Target: $79.00
Current Stop loss: 54.40
Play Entered on: 11/29/12
Originally listed on the Watch List: 11/24/12


First Solar Inc. - FSLR - close: 30.92

Comments:
12/22/12: After four weeks of gains FSLR finally hit some profit taking. Shares had actually been doing okay and consolidating sideways but Thursday's session produced an "inside day" and Friday's market wide sell-off produced a gap down in FSLR. The stock is now under short-term support at its 10-dma. I fully expect a correction lower, probably into the $30-28.00 range. I am not suggesting new positions at this time. We will raise our stop loss up to $25.75.

Earlier Comments:
FYI: Readers will be interested to hear that there seem to be rumors that FSLR might be a takeover candidate and that could be helping fuel gains.

- Suggested Positions -
NOV 28, 2012 - entry price on FSLR @ 26.20, option @ 5.00
symbol: FSLR1418a30 2014 JAN $30 call - current bid/ask $6.70/7.15

12/22/12 new stop loss @ 25.75, FSLR looks poised for more profit taking
12/15/12 readers may want to take profits early. The bid on our call is up to $8.15.
12/08/12 new stop loss @ 24.40

Current Target: $39.75
Current Stop loss: 25.75
Play Entered on: 11/28/12
Originally listed on the Watch List: 11/10/12


General Electric - GE - close: 20.88

Comments:
12/22/12: I cautioned readers a week ago that GE might be due for a pullback. The stock was hit with some profit taking this week with selloffs on Tuesday, Wednesday and then the market's widespread weakness on Friday. The decline this past week erased nearly three weeks of gains.

The stock managed a bounce at technical support of its simple 200-dma on Friday morning but technical indicators are all rolling over. The $20.50-20.00 zone should be support but I am not suggesting new positions at this time.

- Suggested Positions -
NOV 14, 2012 - entry price on GE @ 20.25, option @ 0.42
symbol: GE1418a25 2014 JAN $25 call - current bid/ask $0.48/0.50

12/14/12 GE increased its dividend to 19 cents
11/24/12 new stop loss @ 19.75
11/14/12 triggered at $20.25
11/10/12 adjust the trigger down to $20.25, just above the 200-dma, stop to $19.25
10/27/12 move the buy-the-dip trigger down to $20.50
10/20/12 adjust the buy-the-dip trigger to $21.00 and our stop to $19.45

Current Target: $27.50
Current Stop loss: 19.75
Play Entered on: 11/14/12
Originally listed on the Watch List: 09/22/12


SPDR Gold ETF - GLD - close: 160.33

Comments:
12/22/12: The GLD was a watch list candidate. We have been expecting a correction toward what should be significant support near $160 and its long-term trend line of higher lows. Gold hit some significant profit taking this past week. On Thursday gold sold off following the better than expected U.S. GDP numbers. The gold bugs are rushing out to defend their precious metal. Technically the Fed's QE programs should keep the dollar weak and that should mean strength in gold but gold can be a volatile instrument to trade.

Our plan was to buy calls on a dip at $160.00. The GLD gapped open lower on Thursday at $159.87, triggering our trade. Thursday's low was $158.39. Currently we have a stop loss at $154.40. More aggressive traders may want to put their stop under the $150 level instead. The short-term trend is still down. More conservative traders may want to wait for a new close above $162.00 before considering new positions. Our long-term target is the $190-200 zone.

- Suggested Positions -
DEC 20, 2012 - entry price on GLD @ 159.87, option @ 2.60
symbol: GLD1418a200 2014 JAN $200 call - current bid/ask $2.37/2.48

12/08/12 removed the 2013 call. Only use the 2014 call
11/03/12 Adjust the entry trigger down to $160.00 and the stop to $154.40
10/27/12 adjust the entry trigger to $162.00 and the stop to $154.90
10/20/12 adjust the buy-the-dip trigger to $163.00, stop to $157.75
adjust the 2013 call from Jan. $175 to June $175
09/15/12 adjust the trigger to $165.50, stop to $159.00.
09/08/12 adjust the buy-the-dip trigger to $164.00 (up from $162)

Chart of GLD:

Current Target: $190.00-200.00 zone
Current Stop loss: 154.40
Play Entered on: 12/20/12
Originally listed on the Watch List: 09/01/12


Juniper Networks - JNPR - close: 20.17

Comments:
12/22/12: JNPR is another watch list candidate that has graduated to the active play list. We were waiting for JNPR to closed above $20.25 since the $20.00 level has been round-number resistance. JNPR closed at $20.26 on Dec. 18th. Our trade opened on the 19th at $20.39 with the option opening at $1.84.

JNPR held up well on Friday given the market's weakness and traders bought the dip at the simple 10-dma. Yet I want to point out that JNPR is up five weeks in a row. Bears could argue that JNPR is overbought here. You may want to start with small positions to limit risk. We are starting this play with a stop loss at $18.75. Our long-term target is $24.75.

- Suggested Positions -
DEC 19, 2012 - entry price on JNPR @ 20.39, option @ 1.84
symbol: JNPR1418a25 2014 JAN $25 call - current bid/ask $1.62/1.69

Chart of JNPR:

Current Target: $24.75
Current Stop loss: 18.75
Play Entered on: 12/19/12
Originally listed on the Watch List: 12/15/12


Lennar Corp. - LEN - close: 38.46

Comments:
12/22/12: LEN managed to rally to new multi-year highs early in the week. Yet the stock was unable to breakout past round-number resistance at the $40.00 level. I am not suggesting new positions with LEN sitting just beneath resistance.

Currently our stop loss is at $33.90. More conservative traders may want to move theirs closer to $35.00 instead.

Earlier Comments:
I do think the $40.00 level is likely resistance and LEN will probably see a pullback on its initial test of $40.00. Keep in mind that we also have more than a year for our 2014 calls to work.

- Suggested Positions -
(target for 2013 calls was hit at $36.00 on 09/14/2012)
AUG 17, 2012 - entry price on LEN @ 32.72, option @ 2.07
symbol: LEN1319A35 2013 JAN $35 call - exit $3.70 (+78.7%)

- or -

AUG 17, 2012 - entry price on LEN @ 32.72, option @ 3.39
symbol: LEN1418A40 2014 JAN $40 call - current bid/ask $5.20/5.40

10/20/12 new stop loss @ 33.90, adjust exit target on 2014 calls to $44.00
09/24/12 LEN reported earnings, investors sell the news
09/22/12 new stop loss @ 33.40
09/15/12 new stop loss @ 31.40
09/14/12 2013 call target hit at $36.00, option @ 3.70 (+78.7%)
...

Current Target: $ 36.00(2013 calls), $44.00 (2014 call)
Current Stop loss: 33.90
Play Entered on: 08/17/12
Originally listed on the Watch List: 08/11/12


L-3 Communications - LLL - close: 77.77

Comments:
12/22/12: LLL has been showing some relative strength in recent days. Investors either believe that the politicians in Washington will get a fiscal cliff deal done or investors do not expect the defense spending cuts will impact LLL that badly. Right now the stock has rallied toward resistance near $78 and looks poised to breakout soon.

I remain cautious due to the fiscal cliff issue. Readers may want to seriously consider raising their stops closer to the $75 area. I am not suggesting new positions.

- Suggested Positions - (small positions)
NOV 05, 2012 - entry price on LLL @ 75.64, option @ 4.40
symbol: LLL1418a80 2014 JAN $80 call - current bid/ask $ 4.60/ 5.00

Current Target:$ 85.00
Current Stop loss: 71.85
Play Entered on: 11/05/12
Originally listed on the Watch List: 10/20/12


Motorola Solutions - MSI - close: 54.58

Comments:
12/22/12: MSI seems to be quietly consolidating sideways. The stock has been churning in a narrow range for almost four weeks now. Readers may want to wait for a dip back toward the $52 level, which should be support, before considering new bullish positions.

Our long-term target is $65.00. Currently the Point & Figure chart is bullish and is forecasting at $70 target.

- Suggested Positions -
NOV 26, 2012 - entry price on MSI @ 54.11, option @ 2.93
symbol: MSI1418a60 2014 JAN $60 call - current bid/ask $ 2.56/ 2.70

Current Target:$65.00
Current Stop loss: 49.75
Play Entered on: 11/26/12
Originally listed on the Watch List: 11/17/12


Nokia Corp. - NOK - close: 3.99

Comments:
12/22/12: NOK posted strong gains early in the week but gave a lot of it back on Friday. NOK made it to $4.35 on Wednesday. By Friday's close shares had pulled back to round-number support near $4.00. This is an area that should be bolstered by technical support with its 10-dma and 300-dma.

Our long-term target remains $4.95 but readers may want to seriously consider taking some money off the table now. I am raising our stop loss to $3.40.

I am not suggesting new positions at the moment.

Earlier Comments:
The plan was to buy NOK the stock or the 2014 calls.

- Suggested Positions - (small positions)
NOV 20, 2012 - entry price on NOK @ 2.97, option @ 0.78
symbol: NOK1418a3 2014 JAN $3 call - current bid/ask $ 1.41/ 1.45

- or -

Buy NOK stock: entry @ 2.97

12/22/12 new stop loss @ 3.40
12/15/12 new stop loss @ 3.25
12/08/12 new stop loss @ $2.95

Current Target:$ 4.95
Current Stop loss: 3.40
Play Entered on: 11/20/12
Originally listed on the Watch List: 11/17/12


Starbucks Corp. - SBUX - close: 53.60

Comments:
12/22/12: SBUX had climbed to new four-month highs but then gave it back with Friday's decline. Nimble traders could try and launch new positions on a dip near what should be support at the $52 level.

- Suggested Positions -
DEC 07, 2012 - entry price on SBUX @ 53.43, option @ 3.80
symbol:SBUX1418a60 2014 JAN $60 call - current bid/ask $ 3.70/ 3.80

Current Target:$ 62.00
Current Stop loss: 47.75
Play Entered on: 12/07/12
Originally listed on the Watch List: 12/02/12


Southern Copper Corp - SCCO - close: 37.61

Comments:
12/22/12: After two weeks of churning sideways it looks like SCCO is about to correct lower. This past week has created a bearish engulfing candlestick reversal pattern on the weekly chart. I would expect shares to correct toward the $36.00 level soon. I am not suggesting new positions at this time.

Earlier Comments:
The plan was to keep our position size small to start.

- Suggested *SMALL* Positions -
NOV 06, 2012 - entry price on SCCO @ 35.78, option @ 2.30
symbol:SCCO1418a40 2014 JAN $40 call - current bid/ask $ 2.40/ 2.75

12/22/12 SCCO looks poised to correct lower toward $36.00
11/24/12 new stop loss @ 33.25
11/06/12 trade opened on gap down at $35.78, below our trigger.
(gap down was due to SCCO trading ex-dividend)

Current Target: $44.75
Current Stop loss: 33.25
Play Entered on: 11/06/12
Originally listed on the Watch List: 10/20/12


SIRIUS XM Radio - SIRI - close: 2.95

Comments:
12/22/12: SIRI managed to eke out a gain for the week. The stock spent most of its time bouncing around the $2.90-3.00 range. We did expect the $3.00 level to act as round-number resistance so I'm not surprised to see SIRI pause here. I am not suggesting new positions at current levels.

- Suggested Positions -
OCT 04, 2012 - entry price on SIRI @ 2.75, option @ 0.38
symbol:SIRI1418A3 2014 JAN $3.00 call - current bid/ask $ 0.42/ 0.45

- or -

Buy the Stock: Entry @ $2.75 on Oct. 4th, 2012

12/15/12 new stop loss @ 2.57
12/06/12 SIRI announces a stock buyback program and 5-cent dividend
11/03/12 new stop loss @ 2.45
10/20/12 warning! SIRI is up five weeks in a row and growing overbought. The stock could see a sell-off on its earnings report

Current Target: $ 3.90
Current Stop loss: 2.57
Play Entered on: 10/04/12
Originally listed on the Watch List: 09/29/12


Teck Resources - TCK - close: 36.09

Comments:
12/22/12: TCK continues to climb, posting its fifth weekly gain in a row. While the trend is up, it does seem like momentum is slowing. Broken resistance near $34.00 should be new support. Readers may want to wait for a dip or a bounce near $34.00 as our next bullish entry point.

- Suggested Positions -
DEC 10, 2012 - entry price on TCK @ 35.19, option @ 3.40
symbol: TCK1418a40 2014 JAN $40 call - current bid/ask $ 3.60/3.75

Current Target: $43.75
Current Stop loss: 31.75
Play Entered on: 12/10/12
Originally listed in the New Plays 12/08/12


Valero Energy - VLO - close: 34.14

Comments:
12/22/12: VLO managed to hit new multi-year highs this past week. Yet VLO has not convincingly broken out past what is probably resistance at its September (2012) high near $34.50ish. After a multi-week bounce from its November lows it may be time for a dip or a sideways consolidation. Just be forewarned that if VLO pulls back too sharply it will start to look like a potential bearish double top pattern. I am not suggesting new positions at this time.

- Suggested Positions -
NOV 23, 2012 - entry price on VLO @ 31.25, option @ 3.30*
symbol: VLO1418a35 2014 JAN $35 call - current bid/ask $ 4.30/ 4.40

12/15/12 new stop loss @ 29.75
11/23/12 trade opened on gap open higher at $31.25
*Entry price is an estimate since the option did not trade at the time our play opened.

Current Target: $39.75
Current Stop loss: 29.75
Play Entered on: 11/23/12
Originally listed on the Watch List: 11/10/12


CLOSED Plays


Bank of America - BAC - close: 11.29

Comments:
12/22/12: Target achieved, finally!

We've had this BAC trade a long time. The stock has shown exceptional strength over the last few weeks. I set two exit targets for us. The plan was to exit our position from November 23rd at $10.90 and exit the August position at $11.50. BAC hit both this past week.

On Dec. 17th BAC hit our $10.90 exit target. The bid on our 2013 Jan $10 calls was at $1.00 (+185.7%).

On Dec. 20th, BAC hit our $11.50 exit target. The bid on our 2013 Jan $10 calls was at $1.55 (+3.3%).

- Suggested Positions -

AUG 29, 2011 - entry price on BAC @ 8.10, option @ 1.50
symbol: BAC1319A10 2013 JAN $10 call - exit $1.55 (+3.3%)
(No stop loss on this position)

(2nd Position, bought the dip at $5.15)

NOV 23, 2011 - entry price on BAC @ 5.15, option @ 0.35
symbol: BAC1319A10 2013 JAN $10 call - exit @ $1.00 (+185.7%)
(no stop loss on this position)

12/20/12 exit target hit at $11.50 for Aug.29th position
12/17/12 exit target hit at $10.90 for Nov.23rd position
12/15/12 new stop loss @ 9.85
12/15/12 assigning an $11.50 exit target for the Aug. 2011 position
12/08/12 assigning a $10.90 exit target for the Nov. 2011 position
11/10/12 no new positions at this time.
09/08/12 BAC is breaking out. Consider buying 2014 calls on a dip near the $8.50-8.40 area
07/21/12 BAC reported earnings this past week and investors have decided to sell the news. The stock looks vulnerable here and readers may want to exit early!
05/19/12 BAC has pulled back to the 61.8% retracement
03/17/12 BAC has broken out from its multi-week trading range. Broken resistance near $8.30 should be new support.
...look for earlier comments in prior updates...

Chart of BAC:

Current Target: *see play details
Current Stop loss: see details above
Play Entered on: 08/29/11
Originally listed in the New Plays 08/27/11


Discover Financial - DFS - close: 38.50

Comments:
12/22/12: I cautioned readers that DFS could be volatile around its earnings report. The company missed estimates by four cents and naturally the stock suffered for it. DFS reported on Thursday morning before the bell. The stock reacted by gapping down. DFS broke through potential support at its 100-dma and the $38 level. Shares hit our stop loss at $37.75 on Thursday morning. We were fortunate and closed our call position at breakeven.

- Suggested Positions -
(Closed on Sept. 27th)
JUL 05, 2012 - entry price on DFS @ 35.28, option @ 2.15
symbol: DFS1319A37 2013 JAN $37 call - exit $3.70 (+72.0%)

- or -

JUL 05, 2012 - entry price on DFS @ 35.28, option @ 3.40
symbol: DFS1418A40 2014 JAN $40 call - exit $3.40 (- 0.0%)

12/20/12 stopped out at $37.75
12/15/12 new stop loss @ 37.75
12/02/12 new stop loss @ 36.95
11/03/12 new stop loss @ 36.45
09/29/12 new stop loss @ 35.75
09/27/12 hits our $39.75 target to exit 2013 calls (option @ $3.70)
09/27/12 DFS beats Wall Street's earnings estimates
09/22/12 more conservative traders may want to exit right now or before DFS reports earnings on Sep 27th.
08/25/12 new stop loss @ 34.75
08/25/12 adjusted targets to $39.75 (2013 calls), $44 (2014 calls)
08/18/12 new stop loss @ 33.45
...see prior updates for early comments.

Chart of DFS:

Current Target: $ $44.00 for the 2014s
Current Stop loss: 37.75
Play Entered on: 07/05/12
Originally listed on the Watch List: 06/02/12