The markets suffered some profit taking on Friday but losses were generally mild.


BULLISH Play Updates

Cisco Systems Inc. - CSCO - close: 24.40 change: -0.55 stop: 23.95

Uh-oh! CSCO broke out to new highs on Thursday only to reverse on us Friday with a 2.2% decline. Technically the move on Friday is a bearish engulfing candlestick (reversal) pattern. Now normally these reversals need to see confirmation first but it's still a warning sign for us! CSCO should have support near bottom of its short-term trading range at $24.00. Aggressive and nimble traders could try and jump in on a dip or a bounce near $24.00. At this point I'd rather wait for a new relative high over $25.10.

Our first target to take profits is at $27.40. The goal is a little optimistic since we plan to exit ahead of the early February earnings report. We want to keep our positions small to reduce risk.

Annotated chart:

Entry on   January 14 at $25.05 
Change since picked:     - 0.65 (small positions)   
Earnings Date          02/03/10 (confirmed)         
Average Daily Volume:        34 million      
Listed on   January 09, 2009    


CSX Corp. - CSX - close: 50.04 change: -0.51 stop: 49.45 *new*

CSX broke down under round-number support a $50.00 on an intraday basis but managed to recover before the closing bell. The stock found some temporary support at the rising 30-dma. The week-long correction in the railroad stocks is frustrating but it's probably healthy for the longer-run and eliminates any overbought conditions. While I see this dip near $50.00 as a new entry point to buy the stock we are out of time. The markets are closed on Monday and CSX reports earnings on January 19th after the closing bell. We will plan to exit on the 19th at the close to avoid holding over the earnings report. I'm raising our stop loss to $49.45, just under Friday's low.

Annotated chart:

Entry on   January 12 at $50.71 
Change since picked:     - 0.67   			
Earnings Date          01/19/10 (confirmed)    
Average Daily Volume:       2.6 million 
Listed on   January 12, 2009    


Diana Shipping Inc. - DSX - close: 16.09 change: +0.04 stop: 14.95

DSX continues to churn sideways in the $15.75-16.50 zone. Short-term technicals are mixed due to lack of movement. I am still suggesting that readers wait for a dip or a bounce near $15.50 before initiating new positions. This sector and this stock can be volatile. I do consider this an aggressive, higher-risk trade. We want to keep positions small. Our first target is $17.90.

Annotated chart:

Entry on   January 09 at $16.44 /gap higher entry
Change since picked:     - 0.35 (small positions)
Earnings Date          02/18/10 (unconfirmed)    
Average Daily Volume:       1.5 million       
Listed on   January 09, 2009    


Fifth Third Bancorp - FITB - close: 11.36 change: -0.41 stop: 10.49

It was a painful session for the banks. Investors were disappointed with JPM's earnings report. The company beat earnings but revenues missed and JPM had significantly raised their loan loss reserves. That's generally bad news for the rest of the industry. Shares of FITB spiked lower Friday morning but managed to pare its losses by the closing bell. I would look for a dip or a bounce closer to $11.00 as a new bullish entry point. More conservative traders may want to tighten their stops toward $11.00.

Our plan was to use small positions on FITB. This is going to be a very short-term trade. We'll plan to exit ahead of the January 21st earnings report just to be safe. Our first target is $13.00.

Annotated chart:

Entry on   January 13 at $11.43 (small positions)/gap down entry
Change since picked:     - 0.07   			
Earnings Date          01/21/10 (confirmed)    
Average Daily Volume:      12.7 million 
Listed on   January 09, 2009    


Home Depot - HD - close: 28.57 change: +0.27 stop: 27.80

Dow-component HD displayed some relative strength. Traders bought the dip at $28.00 and its 50-dma on Friday morning and they jumped in again to buy the dip Friday afternoon. Volume was above average, which is encouraging but I remain very cautious here. HD still has a two-week trend of lower highs to worry about. I'm not suggesting new positions at this time.

Our first target is $30.60. Our second target is $32.45. We'll plan to exit ahead of the February earnings report. FYI: The P&F chart is very bullish with a $44 target.

Annotated chart:

Entry on  December 14 at $28.82 *gap higher entry 
Change since picked:     - 0.25   			 
Earnings Date          02/23/10 (unconfirmed)     
Average Daily Volume:      15.7 million      
Listed on  December 12, 2009    


Hologic Inc. - HOLX - close: 15.37 change: +0.06 stop: 14.40

HOLX also displayed some relative strength and added 0.4%. The stock's rally stalled near its 100-dma. Volume was close to double the norm, which is a positive sign considering the gain. I would still consider new bullish positions on dips near $15.10-15.00. More conservative traders may want to consider a slightly tighter stop near $14.75ish. I'm leaving our stop at $14.40. Our first target is $16.45. Watch the 100-dma as potential resistance. I would keep positions small.

Annotated chart:

Entry on   January 13 at $15.15   (small positions)
Change since picked:     + 0.22   			  
Earnings Date          02/01/10 (unconfirmed)      
Average Daily Volume:       2.7 million      
Listed on   January 04, 2009    


Potlatch Corp. - PCH - close: 32.10 change: -0.17 stop: 31.49

There is little change in shares of PCH. The stock remains in its $31.75-33.00 trading range. If you were looking for an entry point this dip toward support at the bottom of the range could work for you but I would use a very tight stop loss. Our first target to take profits is at $33.60. Our second target is $35.75.

Annotated chart:

Entry on  November 16 at $30.30 
Change since picked:     + 1.80 
Earnings Date          02/11/10 (unconfirmed) 
Average Daily Volume:       503 thousand     
Listed on  November 11, 2009    


Renolds American - RAI - close: 53.81 change: -0.21 stop: 52.45

RAI briefly tagged a new 52-week high before paring its gains and closing in the red. Shares remain in their sideways trading range. I'll repeat my comments from Thursday. If shares can truly breakout past $54.00 it could herald a new leg higher. We're planning to exit at $55.90 but more aggressive traders could aim higher.

Annotated chart:

Entry on  November 14 at $50.32  
Change since picked:     + 3.49  
                       /sell half @ 53.15 (+5.6%) 
Earnings Date          02/11/10 (unconfirmed)     
Average Daily Volume:       1.6 million      
Listed on  November 14, 2009    


Starbucks Corp. - SBUX - close: 23.27 change: -0.28 stop: 22.25 *new*

Shares of SBUX didn't make much progress on Friday. The stock opened higher but spent the rest of the day consolidating lower. SBUX reports earnings on January 20th so that doesn't give us much time. I am raising our stop loss to breakeven at $22.25. I'm not suggesting new positions. We plan to exit ahead of the earnings report. Our target to exit is $24.90.

Annotated chart:

Entry on  December 10 at $22.25   
Change since picked:     + 1.02   
Earnings Date          01/20/10 (confirmed) 
Average Daily Volume:      10.9 million    
Listed on  November 30, 2009    


Sigma Designs - SIGM - close: 11.35 change: -0.21 stop: 10.95

Our play on SIGM has been triggered. As expected the stock continued to correct lower and shares hit $11.25 dipping near its 40 and 50-dma. Our trigger to buy shares of SIGM was hit at $11.30 so the play is now open. Cautious traders will want to wait for a bounce first. Look for a move back above $11.50 before initiating new trades. The plan was to use small positions to keep our risk down. Our first target to take profits is at $12.95.

Annotated chart:

Entry on   January 15 at $11.30 
Change since picked:     + 0.05   			  
Earnings Date          03/04/10 (unconfirmed)      
Average Daily Volume:       392 thousand  
Listed on   January 09, 2009    


Seagate Technology - STX - close: 17.77 change: -0.57 stop: 17.45

Shares of STX hit support near $17.50 for the fourth time in three weeks. This time support was underpinned by the rising 30-dma. On a short-term basis the rally in STX looks like it's in trouble. More conservative traders may want to exit early. I am not suggesting new positions at this time. STX is due to report earnings on January 20th after the closing bell. We plan to exit ahead of the earnings report. Our target to exit is $19.75. The plan was to keep positions small to limit our risk.

Annotated chart:

Entry on  December 19 at $17.83 /gap open higher (small positions)
Change since picked:     - 0.06  			     
Earnings Date          01/20/10 (confirmed)        
Average Daily Volume:       8.2 million     
Listed on  December 19, 2009    


Vishay Intertechnology - VSH - close: 8.77 change: -0.32 stop: 8.20

It was a painful session for VSH. Traders were taking profits ahead of the long weekend and VSH gave up 3.5% erasing the two-day bounce. The overall bullish trend remains unchanged. Readers could use this dip as a new entry point but if you're patient we might get a better entry point on a dip near $8.60-8.50 before the stock rebounds. More conservative traders may want to up their stops toward $8.50ish. Our target is $9.95. The plan was to keep positions small to limit our risk.

Annotated chart:

Entry on   January 08 at $ 8.85 (small positions)
Change since picked:     - 0.08   			
Earnings Date          02/09/10 (unconfirmed)    
Average Daily Volume:       1.1 million 
Listed on   January 05, 2009    


Wright Express Corp. - WXS - close: 32.82 change: -0.18 stop: 30.95

WXS held up reasonably well. Shares only lost 0.5% on Friday. The trend is still bullish. Traders can choose to wait for another dip near $32.00 or wait for a new relative high over $33.40 for their next entry point.

Our first target is $35.90. I'm setting a longer-term target at $39.50 but we want to sell the majority of our position at $35.90. We will plan to exit ahead of the February earnings report.

Annotated chart:

Entry on  December 21 at $32.30   
Change since picked:     + 0.52   
Earnings Date          02/10/10 (unconfirmed)
Average Daily Volume:       209 thousand   
Listed on  December 19, 2009    


BEARISH Play Updates

Best Buy - BBY - close: 38.93 change: -0.42 stop: 41.26

Shares of BBY continue to underperform. The stock lost another 1% and closed near multi-week lows. However, the stock is also very close to technical support at the rising 200-dma. I've been warning readers to expect a bounce at the 200-dma. Just wait for the bounce to roll over in the $40-41 zone and then we can reconsider new bearish positions. Alternatively you can wait for a breakdown under the 200-dma near $38.45 as our next entry point. Our first target is $35.25.

Annotated chart:

Entry on   January 12 at $38.95 (small positions)
Change since picked:     - 0.02   			
Earnings Date          03/25/10 (unconfirmed)    
Average Daily Volume:       8.0 million      
Listed on   January 02, 2009    


CLOSED BULLISH PLAYS

Sonoco Products - SON - close: 29.72 change: -0.36 stop: 29.20

I am giving up on SON. Shares broke some short-term support levels. Longer-term the trend is still up and I would keep it on your watch list but I'm suggesting we exit early and close our current trade.

chart:

Entry on  December 26 at $30.31    
Change since picked:     - 0.59 (small positions) closed early (-1.9%)
Earnings Date          02/04/10 (unconfirmed)     
Average Daily Volume:       343 thousand    
Listed on  December 26, 2009