Editor's Note:

The stock market reacted very positively to news that our politicians in Washington managed to put together a deal to address the fiscal cliff. Stocks saw widespread gains.

You may want to consider taking some profits off the table and/or adjusting your stop losses on current positions.

Our watch list was very successful with four stocks graduating to our active trade list (ADI, AKAM, ANR, and URBN).


Closed Plays



None. No closed plays this week.



Play Updates


Adobe Systems - ADBE - close: 38.13

Comments:
01/05/13: I found the action in ADBE this past week a bit disappointing. The stock did tag new multi-year highs but it didn't keep them. Shares do look poised for more gains. Investors may want to raise their stops toward the $35 area.

- Suggested Positions -
DEC 05, 2012 - entry price on ADBE @ 35.30, option @ 2.32
symbol:ADBE1418a40 2014 JAN $40 call - current bid/ask $ 3.35/3.50

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


Analog Devices - ADI - close: 42.52

Comments:
01/05/13: ADI is a watch list candidate that has graduated to our active trade list. The plan was to wait for a close above $42.80 and then buy calls the next day. ADI surprised us on Wednesday with a big move from $42 to $44 and the stock closed at the $44.00 level. Our trade opened on Thursday morning with ADI's gap down at $43.60. At this point ADI looks poised to test the $42 level again. Readers could use a dip near $42.00 or wait for a bounce off the $42 level as our next bullish entry point.

- Suggested Positions -
JAN 03, 2013 - entry price on ADI @ 43.60, option @ 3.10
symbol: ADI1418a45 2014 JAN $45 call - current bid/ask $ 2.45/2.60

Chart of ADI:

Current Target:$ 49.75
Current Stop loss: 39.80
Play Entered on: 01/03/13
Originally listed on the Watch List: 12/22/12


American Intl. Group - AIG - close: 36.30

Comments:
01/05/13: AIG added a dollar for the week. Most of that was on the gap open higher on Wednesday morning. I would not be surprised to see AIG fill the gap with a dip back to $35.50 before moving higher again.

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 - exit @ $5.00 (+47.0%)

- or -

May 18, 2012 - entry price on AIG @ 28.25, option @ 4.20
symbol: AIG1418A35 2014 JAN $35 call - current bid/ask $ 5.20/ 5.35

12/24/12 closed our 2013 call position at the open.
Our exit was at $5.00 (+47.0%)
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


Akamai Technology - AKAM - close: 40.43

Comments:
01/05/13: AKAM is another watch list candidate that has graduated to our play list. The plan was to wait for shares to close above resistance at $42.00. The market's huge rally on Wednesday left AKAM at $42.16. Our trade opened the next day with the stock's gap down at $41.89. AKAM's performance these last two days has been disappointing. Broken resistance at $40.00 is holding up as support for now but if AKAM is sinking with the market in rally mode what will the stock do when the market corrects?

Nimble traders could buy calls on a bounce off the $40.00 level. More conservative traders may want to wait for a new close above $42.00 before considering new positions.

- Suggested Positions -
JAN 03, 2013 - entry price on AKAM @ 41.89, option @ 3.60
symbol:AKAM1418a50 2014 JAN $50 call - current bid/ask $ 2.91/3.00

Chart of AKAM:

Current Target:$ 52.50
Current Stop loss: 37.75
Play Entered on: 01/03/13
Originally listed on the Watch List: 12/31/12


Alpha Natural Resources - ANR - close: 10.38

Comments:
01/05/13: ANR is another watch list candidate that has graduated to our active play list. The plan was to wait for shares to close above $10.15 and then buy calls the next day. ANR closed exactly at $10.15 on Thursday. Previously I said "above" $10.15 so technically the trade did not open on Friday morning. However, Friday's close at $10.38 meets our requirement for "above $10.15". That means the newsletter's official entry will be Monday morning.

After months of consolidating sideways ANR has finally built a bottom and is now breaking through major resistance near the $10.00 level. Our long-term target is $18.00.

- Suggested Positions -
JAN 07, 2013 - entry price on ANR @ --.--, option @ -.--
symbol: ANR1418a10 2014 JAN $10 call - current bid/ask $ 2.52/2.53

01/04/13 ANR meets our entry requirement with a close "above" $10.15. Our trade will open on Monday morning (Jan. 7th)

Chart of ANR:

Current Target:$ 18.00
Current Stop loss: 8.90
Play Entered on: 01/07/13
Originally listed on the Watch List: 12/31/12


Citigroup - C - close: 42.43

Comments:
01/05/13: Citigroup was added to the "conviction buy list" at Goldman Sachs this past week. That along with strength in the financial sector helped push C to a new 52-week high. The breakout past resistance at $40.00 is good news. I am raising our stop loss to $37.35.

- 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 $ 4.35/ 4.45

01/05/13 new stop loss @ 37.35

Current Target:$ 47.50-50.00range
Current Stop loss: 37.35
Play Entered on: 12/18/12
Originally listed on the Watch List: 12/08/12


CONSOL Energy Inc. - CNX - close: 32.43

Comments:
01/05/13: The stock market was exploding higher on Wednesday thanks to the fiscal cliff deal. Yet natural gas stocks were floundering. CNX really underperformed. That was likely due to a drop in natural gas prices. The stock recovered with a bounce on Thursday and Friday but CNX continues to look troubled.

I would seriously consider an early exit right now and just focus elsewhere. I'm going to give CNX one more week to improve or we'll drop it. Please note our new stop loss at $30.45. 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 $ 1.89/ 1.97

01/05/13 new stop loss @ $30.45, if CNX doesn't improve we'll likely drop it next weekend
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: 30.45
Play Entered on: 11/09/12
Originally listed on the Watch List: 10/13/12


Cree, Inc. - CREE - close: 34.36

Comments:
01/05/13: The market's widespread rally lifted CREE straight to resistance at $35.00 and the stock stalled. Investors may want to raise their stop loss closer to the $32 level. I am not suggesting new positions at this time.

- 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/ 5.60

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: 64.46

Comments:
01/05/13: It was a good week for EXPE with a rally to new all-time, record highs. Shares are nearing what could be round-number resistance at $65.00. I would not be surprised to see a little pullback here. Please note our new stop loss at $57.40.

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 $6.20/6.70

01/05/13 new stop loss @ 57.40
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: 33.59

Comments:
01/05/13: FSLR shined last week with a surge to new multi-month highs. The stock hit some profit taking on Friday. We are raising our stop loss to $27.75. More conservative traders might want to adjust your stop closer to 429.00 instead. I am not suggesting new positions at this time.

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 $8.00/8.55

01/05/13 new stop loss @ 27.75
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: 27.75
Play Entered on: 11/28/12
Originally listed on the Watch List: 11/10/12


General Electric - GE - close: 21.20

Comments:
01/05/13: GE posted a gain for the week but I would be cautious here. It looks like the rally failed near $21.50 and a trend of lower highs. I would expect shares to churn sideways until the company reports earnings on January 18th.

- Suggested Positions -
NOV 14, 2012 - entry price on GE @ 20.25, option @ 0.42
symbol: GE1418a25 2014 JAN $25 call - current bid/ask $0.44/0.45

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: 160.44

Comments:
01/05/13: It was a volatile week for gold prices and the GLD. Midweek there was news in the FOMC minutes. The minutes from the last meeting revealed that some of the fed governors are starting to think that maybe the Federal Reserve should slow down or halt some of its QE programs in late 2013. That's a lot sooner than previously expected. The U.S. dollar rallied on this news and that sparked selling in gold prices.

The GLD is still hovering near its long-term supporting trend line of higher lows. However, a close under $158.00 would look like a bearish breakdown. Currently our stop loss is at $154.40. More conservative traders may want to raise their stop. I am not suggesting new positions at this time. The GLD has developed a multi-week trend of lower highs. A close above the 50-dma might be the bullish signal for 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 $2.28/2.39

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)

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


Honeywell Intl. - HON - close: 66.33

Comments:
01/05/13: HON produced a strong week with a rally to new 12-year highs. The all-time high was set back in 1999 when HON was trading in the $68.00-68.65 area. That level could be short-term resistance for the stock. I am not suggesting new positions at this time. We will raise our stop loss up to $59.90.

Our long-term target is $74.50. FYI: The Point & Figure chart is bullish with a long-term $86 target.

- Suggested Positions -
DEC 31, 2012 - entry price on HON @ 62.50, option @ 4.40
symbol: HON1418a65 2014 JAN $65 call - current bid/ask $5.90/6.05

01/05/13 new stop loss @ 59.90

Current Target: $74.50
Current Stop loss: 59.90
Play Entered on: 12/31/12
Originally listed on the Watch List: 12/22/12


Juniper Networks - JNPR - close: 20.38

Comments:
01/05/13: The rally in JNPR stalled at resistance near $20.70. A failure here might look like a short-term bearish double top. On the other hand a breakout could spark more short covering. I would wait for a close above $20.75 before initiating new bullish positions.

- Suggested Positions -
DEC 19, 2012 - entry price on JNPR @ 20.39, option @ 1.84
symbol: JNPR1418a25 2014 JAN $25 call - current bid/ask $1.53/1.58

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: 40.23

Comments:
01/05/13: Good news! The market's rally has lifted LEN past major resistance at the $40.00 level. This is a new multi-year high for the stock. Unfortunately, it's not a very convincing breakout yet. LEN struggled with $40 most of the week.

The company is scheduled to report earnings on January 15th, before the opening bell. Wall Street is expecting a profit of 45 cents a share. More conservative traders may want to take profits before LEN announces just in case they disappoint.

I am not suggesting new positions at this time. We will raise our stop loss to $35.75.

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 $5.85/6.05

01/05/13 new stop loss @ 35.75
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: 35.75
Play Entered on: 08/17/12
Originally listed on the Watch List: 08/11/12


L-3 Communications - LLL - close: 77.71

Comments:
01/05/13: LLL continues to hold up very well considering the risk that Congress might pass new defense spending cuts. For the moment business is safe with the sequestration spending cuts postponed until March. However, the fact that this issue is looming above the defense sector could limit further gains. Shares of LLL are currently hovering just beneath resistance near $78.00.

Readers may want to seriously consider an early exit now. I am not suggesting new positions. We are raising our stop loss up to $73.85.

- 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 $ 4.10/ 4.50

01/05/13 new stop loss @ 73.75. readers may want to just exit early now!

Current Target:$ 85.00
Current Stop loss: 73.85
Play Entered on: 11/05/12
Originally listed on the Watch List: 10/20/12


Motorola Solutions - MSI - close: 56.28

Comments:
01/05/13: MSI rallied to new multi-year highs. Yet if the market stalls or dips I would not be surprised to see MSI dip toward the $55.00 level. Nimble traders could wait for a bounce off $55.00 again before considering new positions.

FYI: MSI is scheduled to report earnings on January 23rd.

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 $ 2.97/ 3.15

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: 4.18

Comments:
01/05/13: NOK made some progress with a decent rebound these last few days. Currently there is short-term resistance near $4.20 and the December high at $4.35. There is no change from my prior comments. I am not suggesting new positions at this time.

Our long-term target remains $4.95 but readers may want to seriously consider taking some money off the table now.

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 $ 1.55/ 1.56

- 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: 55.69

Comments:
01/05/13: SBUX is up four days in a row and hitting new multi-month highs. The relative strength is encouraging but SBUX is now testing resistance at the $56.00 level. I would not be surprised to see a pullback here. Look for new short-term support near $54.00.

We are raising our stop loss to $49.85. More conservative traders may want to place their stop loss closer to $52.00 instead.

- Suggested Positions -
DEC 07, 2012 - entry price on SBUX @ 53.43, option @ 3.80
symbol:SBUX1418a60 2014 JAN $60 call - current bid/ask $ 4.20/ 4.30

01/05/13 new stop loss @ 49.85

Current Target:$ 62.00
Current Stop loss: 49.85
Play Entered on: 12/07/12
Originally listed on the Watch List: 12/02/12


Southern Copper Corp - SCCO - close: 39.08

Comments:
01/05/13: SCCO is hovering just beneath resistance near the $39.00 level. The stock looks pretty good considering headlines this past week that some of its miners in Peru are threatening to go on strike if negotiations don't go well on January 15th.

The $39-40 area is resistance so I am not suggesting new positions at this time. We will raise our stop loss to $34.75.

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 $ 2.70/ 3.00

01/05/13 new stop loss @ 34.75
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: 34.75
Play Entered on: 11/06/12
Originally listed on the Watch List: 10/20/12


SIRIUS XM Radio - SIRI - close: 3.10

Comments:
01/05/13: Hmm... investors have a decision to make. Do you hold on or do you sell now and book gains? This past week saw news that Liberty Media Corp (LMCA) received permission from the FCC to purchase a majority stake in SIRI. That means LMCA is now in control with more than 50% ownership of SIRI stock. What does that mean for SIRI? There has been some speculation that LMCA might try some sort of spinoff to help book its profits in SIRI's stock price. Shares of SIRI are hitting new four-year highs. The trend for SIRI is definitely up and the breakout above resistance at $3.00 is bullish.

You may want to exit early now. The newsletter is going to hold on and see what happens. However, we will take a more defensive approach. I am moving our stop loss up to $2.75. We will move our exit target down to $3.45. 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 $ 0.52/ 0.54

- or -

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

01/05/13 new stop loss on SIRI at $2.75, adjust target to $3.45
01/04/13 LMCA gets permission to take a majority stake in SIRI
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: $ 3.45
Current Stop loss: 2.75
Play Entered on: 10/04/12
Originally listed on the Watch List: 09/29/12


Teck Resources - TCK - close: 37.74

Comments:
01/05/13: TCK has rallied to new eight-month highs. I would hesitate to chase it. The $35.00 level remains decent support. We are raising our stop loss up to $33.85. I am not suggesting new positions at the moment.

- Suggested Positions -
DEC 10, 2012 - entry price on TCK @ 35.19, option @ 3.40
symbol: TCK1418a40 2014 JAN $40 call - current bid/ask $ 4.00/4.15

01/05/13 new stop loss @ 33.85

Current Target: $43.75
Current Stop loss: 33.85
Play Entered on: 12/10/12
Originally listed in the New Plays 12/08/12


Urban Outfitters - URBN - close: 41.39

Comments:
01/05/13: Many of the retail names have been suffering due to worries that the holiday shopping season may not have been as strong as hoped for. That doesn't seem to be the case for URBN. The stock has rallied to new all-time, record highs. We had URBN on our watch list. The plan was to wait for shares to close above $40.75 and then buy calls the next day. URBN closed at $40.98 on January 2nd. Our trade opened on the 3rd with URBN at $41.22.

Readers might want to wait for a dip back into the $40.75-40.00 zone as their entry point. We have a stop loss at $37.85. Our long-term target is $48.00.

- Suggested Positions -
JAN 03, 2013 - entry price on URBN @ 41.22, option @ 4.20
symbol:URBN1418a45 2014 JAN $45 call - current bid/ask $ 4.10/4.40

Chart of URBN:

Current Target: $48.00
Current Stop loss: 37.85
Play Entered on: 01/03/13
Originally listed on the Watch List: 12/15/12


Valero Energy - VLO - close: 35.31

Comments:
01/05/13: Strength in oil, the energy sector, and positive analyst comments helped push VLO to new four-year highs. Last week's action is definitely bullish but I am not suggesting new positions. Oil could see a pullback in the next few weeks. VLO should have support near $32 and its 100-dma. I am raising our stop loss to $30.85.

- Suggested Positions -
NOV 23, 2012 - entry price on VLO @ 31.25, option @ 3.30*
symbol: VLO1418a35 2014 JAN $35 call - current bid/ask $ 4.60/ 4.70

01/05/13 new stop loss @ 30.85
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: 30.85
Play Entered on: 11/23/12
Originally listed on the Watch List: 11/10/12