Option Investor
Newsletter

Daily Newsletter, Thursday, 3/1/2012

Table of Contents

  1. Market Wrap
  2. New Plays
  3. In Play Updates and Reviews

Market Wrap

Dow Flirts with 13,000 Again

by Thomas Hughes

Click here to email Thomas Hughes
Yesterday's barrage of economic data continued today with jobless claims, PCE and auto sales. The news, while viewed as positive, failed to spark a significant rally.

The markets were bombarded by economic data and testimony from Ben Bernanke for the last two days. The news continued with the release of jobless data which was positive and supports the recent trend in the job market. The news however failed to spark any real buying in the markets. All the major indexes were up in the pre trading and opened higher but more news throughout the morning, and statements from Fed Chairman Ben Bernanke did not support the positive outlook. The chairman also failed to inspire any confidence of further easing of monetary policy. Many economists and traders had been expecting more from the federal reserve and the lack has been blamed for yesterdays market decline.

Some bright spots in the today's data include lower unemployment claims, increasing auto sales and a surprise gain in Chinese manufacturing. The recent trend of decreasing unemployment was reinforced by today's data. Initial claims decreased as well as the total number of people receiving unemployment benefits. The job market is being watched very closely as a meter of the improving economy. Today's reported improvements coupled with China's unexpected gain in orders for export goods gave investors reason to hope the world economy would expand at a greater rate than forecast. The renewed hope led oil to trade higher, closing in on the $110 price level.



Today's economic data seemed to put a positive spin on sentiment on but did not result in higher equity prices. The mix of data was a bit confusing, with positive news balanced by negative. The European markets had been trading higher throughout the day but after the string of releases, and on top of all of yesterday's news, ended the day off of their highs.

Initial jobless claims for the week ending 2/18/2012 were revised up by 2000 to 353,000. The advance number for new claims in the week ending 2/25/2012 fell by 2000 to 351,000, holding in line with the recent downward trend in unemployment. The four week moving average of initial claims dropped by 5,500 to 354,000, the lowest level since March, 2008. Continuing claims fell by 2000 as well to 3.4 million in the week ending 2/18/2012. As of the week ending 2/11/2012 there were 7.5 million total people claiming some form of unemployment.




Unemployment seems to have reached a peak in late 2011 and has been receding since. The real question though is the actual employment rate. Are the recent declines due to people finding jobs or are job seekers simply falling off the books when they can not find work. The unemployment rate will be a key metric to watch. The next release is scheduled for March 9 th.

In other economic headlines Personal Income is up by .3% and Spending is up by .2%. These numbers are both on the light side, expectations were for an increase in each of .4%. Construction spending decreased by .1% as well, a number in line with expectations and no surprise. The weather this year, particularly in the south east could help boost construction activity. Orders for Durable goods also fell and by record numbers. Forecasts were for a drop of 1.8% but the actual number came in far weaker. Orders dropped by 4% to the lowest level in 3 years.

Personal Consumption Expenditures prices rose by .2% in January and and 2.4% from the year ago period. This is slightly below analysts forecasts and the lowest reading of PCE inflation since April. The Institute for Supply Management's index of national factory activity came in at a much lower than expected 52.4 compared to last months reading of 54.1. The ISM had been looking for an increase of .4 to 54.5. This, along with weak income gains and spending is casting doubts on the strength of the recovery.

The 30 year fixed rate mortgage fell in the last week by .5%. The current rate is 3.9% and near record lows. Recent buying activity in the real estate market has failed to boost prices. Home values actually declined in 18 of 20 cities tracked by the Case-Shiller Home-Price index. The biggest declines were seen in Atlanta, Chicago and Detroit.

The European debt crisis is still on the radar. A panel of major international banks, the International Securities and Derivatives Commission, ruled today that Greece had not defaulted and caused a “credit event”. The move was called a “bad precedent” by PIMCO's Bill Gross. The European Central Bank also issued a major injection of liquidity that temporarily boosted the market. After Ben Bernanke's statements quashing hopes for further quantitative easing the European markets reversed on Bernanke's statements and turned negative before finally finishing the day up, but off of the highs. The central bank's move will help in the short term but there are still many hurdles ahead.

The FDIC released some information today concerning strengthening in the US banking sector. The number of troubled banks declined in 2011 to 831 from over 860 total in 2010. Earnings among US banks increased by 24% in the fourth quarter of 2011 and more than 60% of all banks reported increased earnings for the quarter. These improvements were made on increased asset quality, higher deposit balances and higher loan originations.

Oil traded higher today on brighter prospects for the economy and concerns over Iran. Supply concerns mixed with higher than expected factory orders from China helped to support higher prices. Brent Crude traded to settle over $124 while light crude traded up $1.81 to settle at 108.88. Oil demand from China was expected to decline as their economy cooled in 2012. The newest data suggests that the previous estimates could be wrong. Brighter news here at home in the form of improved banking and declining joblessness boosted outlook for demand in the coming year. Gas prices are still rising but have not yet crossed the $4 mark for most states. The increased cost of fuel could balance the rise in expectations.

A reported explosion at a Saudi Pipeline was was the catalyst for a late spike in oil prices. At the time of this writing Saudi officials were denying the claims.

Autos February US Auto Sales were also released today with some big surprises here as well. Toyota (TM )and General Motors (GM) both beat estimates while Ford (F) missed. Ford's February sales increased by 14.4% but were estimated at 18.3%. General Motors beat negative expectations with a 1.1% gain in sales and Toyota led with a 12.4% sales increase. The troubled Japanese automaker had been projected to increase sales by only 5.6% in the month. These numbers are line with 2011's results and the expected trend in 2012. GM and Ford have both been increasing sales and gaining market share over their Asian based competition. It is looking like Toyota will not give up without a fight, Ford and GM will have to continue improving their business and balance sheets in order to keep their competitive edge.

Precious Metals Buyers flooded back to gold and silver today after yesterday's 5% drop. The move came after further testimony from Bernanke gave no signs of more quantitative easing. Yesterday's drop was dashed by quashed hopes of global easing, a move seen by many as the way to get the economy rolling again. US gold prices rose more than 0.7% in today's trading.

Stock to Watch Chain store retailers hit it big in the recent quarter. A string of positive surprises sent the retail indexes higher throughout the day. The retail Spyder (XRT) made new highs to close up 1.16% at $59.56. Several factors went into the strong sales. Warmer weather and the improving job market are the number one contributors. Valentines spending was also included in these numbers.

Retail Spyder XRT

Gap same store sales led the charge. Gap comp sales were up 4% versus an expected decline of -1.4%. The stock lived up to its name today and gapped up to trade as high as 10%. Gap ended the day at $25.05, an increase of over 7%. Target sales jumped 7%, Macy's sales are up 4.6%, Limited up 8% and Nordstrom's sales are up 10.2% compared to an expected 5.6% gain.

Gap Stores Inc

Wal Mart raised its divided today by 9%. The current payout is $1.59 per share annually, up from the previous $1.45, and at the current prices yeilds about 2.75%. Wal Mart has a long history of dividend increases. Management has said that “core US business is on track”.

Wal Mart Stores

Research in Motion (RIMM) got pounded today. The stock lost more than 4% to close at a new 2012 low of $13.58. Analyst Peter Misek of Jefferies warned today that there is at least a 50% chance that Research in Motion will negatively pre warn on earnings scheduled to be released at the end of this month. Weakening demand for the companies high tech smart phones and its lower end models is putting the companies current guidance at risk. Mr. Misek thinks the company may even miss the low end of the guidance. Increased competition from Apple's iPhone and other phones based on the Android system are hurting market share and sales worldwide. The iPhone 5 is supposed to seriously impact the potential success of the Blackberry 10 slated to be released later this year.

Research In Motion

Apple is also going to be offering a cheaper version of its iPad as early as next week. The company is expected to re-launch a less expensive version of the iPad 2 in order to compete with the lower end tablets and readers powered by Android. This move will put pressure on Amazon and other tablet makers. The super cheap models like the Kindle Fire may be the only ones able to gain a foothold against Apple and the iPad. Apple is set up to dominate the tech market on several levels. The iPhone and iPad lines have been gaining success and will keep on pressuring rivals Research in Motion and Amazon. The stock traded up to all time highs today but bearish pressure throughout the day brought the stock down from its intra-day peak to a new closing high of $544.47.

Apple

Financial stocks also gained in today's trading following upgrades by Nomura. The investment group raised price targets and earnings estimates for four of the world's largest financial institutions. Bank of America, JP Morgan, Citigroup and Goldman Sachs all gained more than 2% in today's trading. The financial Spyder (XLF) traded up to 7 month highs today and closed up 1.22% at $14.94.

Financial Spyder

GM traded up today to close at $26.47. The stock is building support upon its 30 day exponential moving average and looks like it will wipe out resistance at $27.50. A move above this level will leave the stock open to further short term gains and could take the stock as high as $30.

General Motors

Ford is also moving up from its 30 day EMA and on strong volume. Volume over the last two days has been about double the average for the last 30 days of trading. The stock is moving up to resistance at $12.50 and is forming a bullish triangle. A break out here could take the stock over $14, continued strength in sales and positive earnings news will be key for this move.

Ford Motor Company

Toyota (TM ) has been moving up since the beginning of the year but on extremely choppy trading. The sales news today helped to support the stock which moved up 0.44% from yesterday's close. Toyota still faces many challenges on an international basis but its US market is improving. It will be important to keep an eye on production levels and sales going forward.

Toyota Motors

Today's Market Recap

The markets were a bit quiet today, trading in a fairly tight range on low volume. The Dow flirted with 13,000 throughout the day, trading over the bench mark number for some time in the morning and then again in the afternoon. The Financial, retail and materials sectors were the leaders of the day while consumer staples was the laggard. During the afternoon trading prices declined bringing the Dow down to yesterdays closing number before a small bounce kept the index in positive territory for the day by 0.22% but failed to close above 13,000.

Dow Jones

The Dow ($DJI) is in much the same shape as the S&P. The Dow is now trading at a resistance level comparable to the 1400 mark on the S&P chart. The index opened basically inline with yesterday's close, traded higher, crossed 13,000 and then declined during the afternoon to close shy of the target by 20 points. The bull move has weak volume, which I consider to be very important in any bull movement. The index needs to close over 13,000 with some significant volume for me to be convinced it will continue higher. Momentum is also divergent, giving me further reason to suspect the current bull market.

Dow Jones Average

The S&P is still trending up and trading well above its 30 day exponential moving average. The index is trading above 1360, which has been noted as an important resistance level. I see the index trading below resistance at 1400,a level which is in line with an a major pivot point set during the 2008 crash. I am going to be watching 1400 more closely than 1360. Volume is also lacking from the move and it is possible that the S&P could be approaching a top. I think some caution is in order at this point in the rally.

S&P 500

The Nasdaq continued its trend upward today and made a new high of 2,995.13. On short term charts it looks extended and indicators could be pointing to a correction. On the long term charts the index is showing some strength. Improving domestic data and now heightened expectations from China and Asia could support a continuation of the upward trend.

Nasdaq

Things to watch out for in Friday's trading are rising oil prices and technical resistance on the Dow Jones index. The domestic and global economies are showing some resilience but the rising cost of energy could derail gains made last year and in the first part of this year. Earnings will also continue to drive stocks. The big names have already reported for the current quarter but it will soon be time for some of the earlier reporting companies to start releasing information. US companies will have to increase revenue, margins and earnings in order to continue the bull trend.


New Plays

Financials

by James Brown

Click here to email James Brown

Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trading ideas and watch list candidates:

(bullish candidates) MS, ITUB, FIO, LM, RAI, ODFL, IACI, SLXP, PCYC, TSLA, CALM, XHB, NI


NEW BULLISH Plays

American Intl. Group - AIG - close: 29.45 change: +0.23

Stop Loss: 27.75
Target(s): 34.50
Current Gain/Loss: unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Like a phoenix rising from the ashes AIG is taking flight. Shares were crushed during the 2008 financial crisis. The company did a 1:20 reverse split back in 2009. Trading this stock is not for the faint of heart with so much volatility (just look at a weekly chart).

Lately AIG has produced a relatively steady bullish trend of higher lows. I am suggesting small bullish positions tomorrow morning but only if both AIG and the S&P 500 index open positive. More conservative traders might want to wait for AIG to actually close over the $30.00 level before considering new positions. We'll use a stop loss at $27.75. Our multi-week target is $34.50. FYI: The Point & Figure chart for AIG is bullish with a long-term $42.50 target.

Do not enter position unless AIG and the S&P 500 are both positive at the open

- small positions -

Suggested Position: buy AIG stock @ (the open)

- or -

buy the Apr $30 call (AIG1221D30) current ask $1.20

Annotated chart:

Entry on March xx at $ xx.xx
Earnings Date 05/07/12 (unconfirmed)
Average Daily Volume = 6.1 million
Listed on March 01, 2011



In Play Updates and Reviews

ZUMZ Hits Our Target

by James Brown

Click here to email James Brown

Editor's Note:
Shares of ZUMZ hit our conservative target today as it traded to new multi-year highs. We also saw AVY and CTCT get stopped out as they broke down under support.

Current Portfolio:


BULLISH Play Updates

Archer-Daniels-Midland Co - ADM - close: 31.52 change: +0.32

Stop Loss: 29.75
Target(s): 34.00
Current Gain/Loss: + 0.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
03/01 update: ADM delivers a +1.0% bounce and recovers most of yesterday's pullback. The correction may not be over yet. I am not suggesting new positions at this time. More conservative traders may want to start raising their stop loss.

current Position: Long ADM stock @ $31.21

- or -

Long Mar $32 call (ADM1217C32) Entry $0.47

Entry on February 15 at $31.21
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 5.6 million
Listed on February 14, 2011


Discover Financial Services - DFS - close: 30.67 change: +0.66

Stop Loss: 29.40
Target(s): 31.50
Current Gain/Loss: + 8.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
03/01 update: DFS continues to show relative strength. The stock added +2.1% today. I am suggesting we exit our March $28 calls at the opening bell tomorrow. The current bid on these calls is $2.65 (+140%). Obviously more aggressive traders may want to hold on but March options expire in two weeks. Our exit target for DFS is $31.50. I am not suggesting new positions at this time.

Current Position: Long DFS stock @ $28.15

- or -

Long MAR $28 call (DFS1217C28) Entry $1.10

03/01/12 prepare to exit our March $28 calls at the open tomorrow. current bid is at $2.65
02/28/12 new stop loss @ 29.40
02/25/12 new stop loss @ 28.45
02/16/12 new stop loss @ 27.95
02/15/12 new stop loss @ 27.75
02/10/12 triggered at $28.15
02/08/12 new trigger @ 28.15, stop loss 27.25
02/07/12 still not open. Adjust strategy to buy a dip at $28.30, stop loss at $27.40
02/06/12 not open yet. try again.

Entry on February 10 at $28.15
Earnings Date 03/22/12 (unconfirmed)
Average Daily Volume = 6.2 million
Listed on February 04, 2011


Digital River - DRIV - close: 17.61 change: -0.04

Stop Loss: 17.45
Target(s): 21.50
Current Gain/Loss: - 4.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/01 update: DRIV is not cooperating. The intraday bounce failed and shares look poised to breakdown under the bottom of its trading range and hit our stop loss at $17.45 tomorrow. More aggressive traders might want to consider bearish positions under $17.50 and target the 50-dma. I am not suggesting new positions at this time.

Earlier Comments:
We want to keep our position size small to limit our risk.

(small positions)

current Position: Long DRIV stock @ $18.50

- or -

Long Mar $18 call (DRIV1217c18) Entry $1.00

02/25/12 we may want to consider an early exit to cut our losses.

Entry on February 17 at $18.50
Earnings Date 04/30/12 (unconfirmed)
Average Daily Volume = 727 thousand
Listed on February 13, 2011


Energy XXI Ltd. - EXXI - close: 38.32 change: +0.89

Stop Loss: 36.45
Target(s): 42.50
Current Gain/Loss: - 0.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
03/01 update: There was no follow through on yesterday's breakdown under $38.00. Shares of EXXI rebounded to the tune of +2.3%. While the close back above $38.00 is positive today's session created an "inside day", which suggests indecisive by traders. I am not suggesting new positions at this time.

Earlier Comments:
The plan was to keep our position size small to limit our risk. Our multi-week target is $42.50. FYI: The Point & Figure chart for EXXI is bullish with a long-term $62 target.

(small positions)

current Position: Long EXXI stock @ $38.43

- or -

Long Mar $40 call (EXXI1217C40) Entry $1.00

Entry on February 17 at $38.43
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on February 16, 2011


First Cash Financial - FCFS - close: 42.34 change: +0.08

Stop Loss: 41.95
Target(s): 49.00
Current Gain/Loss: - 3.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/01 update: The action in FCFS was bearish (again). The stock saw an intraday rally but it failed near $44 and FCS closed on its lows near the bottom of its recent trading range. Odds are growing quickly that FCFS will breakdown under the $42 level soon. Readers may want to abandon ship immediately. I am not suggesting new positions. We will raise our stop loss to $41.95.

current Position: Long FCFS stock @ $44.00

- or -

Long Mar $45 call (FCFS1217C45) Entry $1.05

03/01/12 the intraday reversal is bearish. readers may want to exit early immediately. New stop loss at $41.95

Entry on February 17 at $44.00
Earnings Date 04/18/12 (unconfirmed)
Average Daily Volume = 351 thousand
Listed on February 16, 2011


Graco Inc. - GGG - close: 51.72 change: +0.54

Stop Loss: 48.95
Target(s): 54.50
Current Option Gain/Loss: + 2.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/01 update: GGG inched higher with another +1% gain but shares were struggling with the $52.00 level as resistance all day long. I am not suggesting new positions at this time.

Earlier Comments:
The plan was to keep our position size small to limit our risk. Our target is $54.50. FYI: The Point & Figure chart for GGG is bullish with a long-term $77 target.

(small positions)

current position: Long GGG stock @ $50.25

02/27/12 triggered at $50.25
02/25/12 trade did not open. Adjust entry to buy a dip at $50.25
02/23/12 trade did not open, try again.
02/22/12 trade did not open, try again.

Entry on February 27 at $50.25
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 414 thousand
Listed on February 21, 2012


The Hain Celestial Group - HAIN - close: 41.62 change: +0.78

Stop Loss: 38.95
Target(s): 44.75
Current Gain/Loss: + 1.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
03/01 update: HAIN outperformed again this time with a +1.9% gain. The stock is challenging its all-time highs set three weeks ago near $42.00. I am not suggesting new positions at this time.

(small positions)

current Position: Long HAIN stock @ $40.85

02/29/12 triggered at $40.85
02/27/12 trade did not open. Adjusting entry strategy to buy HAIN at $40.85 with a stop loss at $38.95
02/25/12 trade did not open. Try again

Entry on February 29 at $40.85
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 430 thousand
Listed on February 23, 2011


Jos. A. Bank Clothiers - JOSB - close: 52.30 change: +0.81

Stop Loss: 49.75
Target(s): 54.00
Current Gain/Loss: + 3.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
03/01 update: Retail-related names were showing strength today and JOSB added +1.5%. I am not suggesting new positions at this time.

Earlier Comments:
Further gains could spark a short squeeze. The most recent data listed short interest at 19.8% of the 27.5 million-share float.

current Position: long JOSB stock @ $50.75

- or -

Long Mar $50 call (JOSB1217C50) Entry $1.90

02/18/12 adjusted exit target to $54.00.
02/14/12 new stop loss @ 49.75

Entry on February 13 at $50.75
Earnings Date 03/29/12 (unconfirmed)
Average Daily Volume = 301 thousand
Listed on February 11, 2011


NYSE Euronext - NYX - close: 29.57 change: -0.10

Stop Loss: 28.95
Target(s): 34.75
Current Gain/Loss: - 1.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/01 update: Hmm... the NYX did not participate in the market's rally today. That's a caution signal. Shares look poised to drop toward $29.00 now. I am not suggesting new positions at this time.

Earlier Comments:
We want to keep our position size small. Our multi-week target is $34.75. FYI: The Point & Figure chart for NYX is bullish with a $41.00 target.

(small positions)

current Position: Long NYX stock @ $30.05

- or -

Long Mar $30 call (NYX1217C30) Entry $0.55

02/29/12 triggered at $30.05
02/28/12 adjusted trigger to $30.05 and stop to $28.95
02/25/12 adjust entry point strategy to buy a dip at $30.25 and adjust stop loss to $28.75
02/23/12 not open yet, try again.

Entry on February 29 at $30.05
Earnings Date 04/30/12 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on February 22, 2011


Charles Schwab - SCHW - close: 13.91 change: +0.03

Stop Loss: 12.49
Target(s): 14.75
Current Gain/Loss: + 4.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/01 update: The rally in SCHW might have stalled at the $14.00 level. Shares drifted sideways in a narrow range all day long. There is no change from my prior comments. The stock is arguably short-term overbought. Don't be surprised to see a dip back into the $13.50-13.25 zone.

Earlier Comments:
Our multi-week target is $14.75. FYI: The Point & Figure chart for SCHW is bullish with a $19.00 target.

current Position: Long SCHW stock @ $13.25

- or -

Long Apr $13 call (SCHW1221D13) entry $0.59

Entry on February 27 at $13.25
Earnings Date 04/16/12 (unconfirmed)
Average Daily Volume = 15.9 million
Listed on February 25, 2011


Teck Resources Ltd. - TCK - close: 40.07 change: +0.10

Stop Loss: 39.49
Target(s): 43.95
Current Gain/Loss: - 3.1%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
03/01 update: There was no follow through on yesterday's bearish reversal move in TCK but the bounce today was very anemic. Shares continue to look vulnerable here to more selling. More conservative traders might want to inch up their stop loss.

I am not suggesting new positions at this time.

current Position: Long TCK stock @ $41.35

- or -

Long Apr $42 call (TCK1221D42) Entry $1.94

02/29/12 trade opened on gap open higher at $41.35, which was above our trigger at $41.30.

Entry on February 29 at $41.35
Earnings Date 02/09/12
Average Daily Volume = 3.0 million
Listed on February 28, 2011


United States Oil Fund (ETF) - USO - close: 41.75 change: +0.83

Stop Loss: 39.90
Target(s): 43.50
Current Gain/Loss: + 3.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
03/01 update: As expected traders bought the dip and oil continues to rally. The USO outperformed with a +2.0% gain. The stock is now challenging resistance near $42.00. I am raising our stop loss to $39.90.

Our target to exit is still $43.50 but longer-term traders could aim for the $45.00 area.

Earlier Comments:
We do not want to use the USO for long-term positions. This ETF is constantly rolling over its futures positions over time, which can have a negative impact on the share price. FYI: The Point & Figure chart for USO is bullish with a long-term $58.00 target.

(small positions!)

current Position: Long the ETF @ $40.25

- or -

Long April $40 call (USO1221D40) Entry $2.10

03/01/12 new stop loss @ 39.90
02/29/12 new stop loss @ 39.75
02/25/12 new stop loss @ 39.40

Entry on February 21 at $40.25
Earnings Date --/--/--
Average Daily Volume = 8.8 million
Listed on February 18, 2011


VimpelCom - VIP - close: 12.31 change: +0.14

Stop Loss: 11.75
Target(s): 13.25
Current Gain/Loss: unopened
Time Frame: up to its March earnings report
New Positions: Yes, see below

Comments:
03/01 update: VIP is holding up reasonably well and posted a +1.1% gain. I am adjusting our entry point strategy. We will plan to open small bullish positions tomorrow morning but only if both VIP and the S&P 500 index open positive. I am raising our stop loss to $11.75.

Earlier Comments:
VIP is due to report earnings in mid March and we do not want to hold over the report. Keep in mind that VIP is prone to gap open each morning as shares adjust to trading overseas. FYI: The Point & Figure chart for VIP is bullish with a long-term $19.00 target.

Do not enter position unless VIP and the S&P 500 are both positive at the open

Suggested Position: buy VIP stock @ (the open)

03/01/12 adjusted entry point strategy. New stop loss @ 11.75
02/28/12 trade did not open. New trigger: buy a dip at $12.00
02/27/12 trade did not open. try again.

Entry on February xx at $ xx.xx
Earnings Date 03/13/12 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on February 25, 2011


Zumiez Inc. - ZUMZ - close: 31.42 change: +0.19

Stop Loss: 29.75
Target(s): 33.00 or 34.50
Current Gain/Loss: +14.1%
Time Frame: up to the early March earnings report
New Positions: see below

Comments:
03/01 update: ZUMZ gapped open higher as expected. Shares hit our conservative target at $33.00. The stock actually spiked to $33.84 before paring its gains. I would not be surprised to see a dip back toward $32.00 before ZUMZ continues higher.

I am not suggesting new positions at this time. Our aggressive target remains $34.50.

NOTE: ZUMZ is due to report earnings in early March. We do not have a confirmed date yet and we do not want to hold over the report. I suspect we have less than two weeks left for this trade.

current Position: Long ZUMZ stock @ 28.75

- or -

buy the Mar $30 call (ZUMZ1217C30) Entry $2.35

03/01/12 conservative target hit at $33.00 (+14.7%)
bid on the March $30 call @ $3.30 (+40.4%)
02/29/12 ZUMZ announced better than expected same-store sales growth of +14.2%. We will adjust our conservative exit target to $33.00. Aggressive target is still $34.50. New stop loss @ 29.75
02/28/12 ZUMZ hit our entry point for new positions at $31.05
March $30 calls entered.
02/25/12 new stop loss @ 29.25
02/24/12 ZUMZ did not meet our new entry point conditions.
02/16/12 new stop loss @ 28.90
02/15/12 exited Feb. $30 calls. bid @ $0.55 (-45%)
02/14/12 prepare to exit Feb. $30 calls at the close tomorrow
02/11/12 new stop loss @ 28.45
02/08/12 new stop loss @ 27.90
02/01/12 Trade opened with ZUMZ gapping higher at $28.75

chart:

Entry on February 01 at $28.75
Earnings Date 03/12/12 (unconfirmed)
Average Daily Volume = 627 thousand
Listed on January 31, 2011


BEARISH Play Updates

None. We do not have any active bearish trades.


CLOSED BULLISH PLAYS

Avery Dennison - AVY - close: 29.91 change: -0.59

Stop Loss: 29.75
Target(s): 33.40
Current Gain/Loss: - 4.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
03/01 update: AVY did not participate in the market's widespread rally today. Instead the stock underperformed with a -1.9% decline on above average volume. That's usually a bad sign. Shares also broke down under what should have been support near $30.00 and its 200-dma. Our stop loss was hit at $29.75.

closed Position: Long AVY stock @ 31.05, exit $29.75 (- 4.1%)

- or -

Apr $30 call (AVY1221D30) Entry $1.65 exit $0.85 (-48.8%)

03/01/12 AVY underperformed and broke down under support. Our stop loss was hit at $29.75

chart:

Entry on February 25 at $31.05
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on February 23, 2011


Constant Contact, Inc. - CTCT - close: 30.00 change: -0.24

Stop Loss: 29.45
Target(s): 34.75
Current Gain/Loss: - 6.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/01 update: CTCT underperformed the market today with a -0.8% decline. Shares did not participate in the market's widespread rally. The stock hit an intraday low of $29.20. Our stop was hit at $29.45.

closed Position: Long CTCT stock @ $31.55 exit $29.45 (- 6.6%)

- or -

Apr $30 call (CTCT1221D30) Entry $2.85 exit $1.50*(-47.3%)

03/01/12 CTCT underperformed the market and hit our stop at $29.45
*exit price on the option is an estimate since the option did not trade at the time CTCT hit our stop loss.

chart:

Entry on February 28 at $31.55
Earnings Date 04/30/12 (unconfirmed)
Average Daily Volume = 662 thousand
Listed on February 27, 2011