Editor's Note:
A WSJ article that SLE might sell or break up the company pushed the stock to new three-year highs. SLE hit our first target to take profits. Aside from SLE it was a relatively quiet option expiration Friday.

-James

Current Portfolio:


BULLISH Play Updates

Alcoa Inc - AA - close: 14.56 change: +0.10

Stop Loss: 12.90
Target(s): 14.95, 15.95
Current Option Gain/Loss: +10.4%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
12/18 update: The rebound in AA continued and shares closed at new eight-month highs above the $14.50 mark. We are raising our stop loss to $13.45 since the $13.50 level and the 50-dma should offer some support. I am not suggesting new bullish positions at these levels. Our first target to take some money off the table is $14.95.

Current Position: Long AA stock @ 13.18

chart:

Entry on November 16 at $13.18
Earnings Date 01/10/11 (unconfirmed)
Average Daily Volume: 26.1 million
Listed on November 6th, 2010


Automatic Data Processing - ADP - close: 46.86 change: +0.01

Stop Loss: 45.95
Target(s): 49.75, 52.50
Current Option Gain/Loss: unopened
Time Frame: 10 to 12 weeks
New Positions: Yes, see trigger

Comments:
12/18 update: It was a very quiet Friday for ADP. Shares traded in a narrow range and closed virtually unchanged for the session. The stock looks poised to breakout higher from its recent consolidation. The high on December 7th was $47.17. I am suggesting a trigger to open bullish positions at $47.25. If triggered we'll use a stop loss at $45.95. Our first target is $49.75. While the trend is up ADP doesn't move super fast so this could take several weeks.
FYI: The Point & Figure chart for ADP is forecasting a bullish price target of $66.00.

Buy-the-breakout Trigger @ $47.25

Suggested Position: Buy ADP stock @ $47.25

- or -

Buy the 2011 February $50.00 call (ADP1119B50)

*Note: just because the Feb. $50 calls are cheap don't go overboard and buy too many. They're cheap for a reason. ADP may not hit $50 by Feb. expiration.

chart:

Entry on December xx at $xx.xx
Earnings Date 01/26/11 (unconfirmed)
Average Daily Volume: 2.8 million
Listed on December 16th, 2010


Alaska Air Group - ALK - close: 57.49 change: +0.97

Stop Loss: 54.90
Target(s): 59.75
Current Option Gain/Loss: + 4.7%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
12/18 update: Wow! ALK was showing relative strength on Friday. The XAL airline index rose +0.19%. ALK rallied +1.7% to close at new ten-year highs. While this relative strength is encouraging I remain somewhat cautious on ALK. Aggressive traders may want to consider raising their exit target but you'll also need to give this play more time. I am not suggesting new bullish positions at this time.

Current Position: Long ALK stock @ $54.91

- or -

Long the 2011 January $60 calls (symbol: ALK1122A60) entry @ $1.60

chart:

Entry on November 22 at $54.91
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume: 331 thousand
Listed on November 20th, 2010


American Express - AXP - close: 44.01 change: -0.56

Stop Loss: 41.95
Target(s): 47.50, 49.85
Current Option Gain/Loss: - 1.0%
Time Frame: 10 to 12 weeks
New Positions: Yes, see below

Comments:
12/18 update: MasterCard and Visa continued to sink on Friday following Thursday's big losses. AXP also trended lower on Friday even though AXP doesn't issue debit cards. This drop in AXP toward support near $44.00 looks like a bullish entry point to buy this stock (or calls). On Thursday night I wrote buy the dip and AXP opened at $44.49 on Friday morning.

Buy the dip! Current Position: Long AXP stock @ $44.49

- or -

Long the 2011 April $45 calls (AXP1116D45) Entry @ $2.72

chart:

Entry on December 17 at $44.49
Earnings Date 01/20/11 (unconfirmed)
Average Daily Volume: 9.0 million
Listed on December 2nd, 2010


Popular Inc. - BPOP - close: 2.86 change: -0.03

Stop Loss: 2.69
Target(s): 3.40, 3.95
Current Option Gain/Loss: - 4.6%
Time Frame: 12 to 16 weeks
New Positions: see below

Comments:
12/18 update: Hmm... BPOP continues to underperform. The stock has now fallen to its 50-dma. I am raising our stop loss to $2.74. We are not suggesting new bullish positions at this time. Cautious traders may want to exit now. The breakout past $3.00 a few days ago now looks like a bull-trap pattern.

Current Position: Long BPOP stock @ $3.00

- or -

Long the 2011 April $3.00 calls (BPOP1116D3) Entry @ $0.34

12/18: New stop loss @ 2.75

chart:

Entry on December 14 at $ 3.00
Earnings Date 01/20/11 (unconfirmed)
Average Daily Volume: 11.7 million
Listed on December 11th, 2010


Companhia Brasileira de Distribuicao - CBD - close: 40.60 change: -0.52

Stop Loss: 36.75
Target(s): 44.95, 49.00
Current Option Gain/Loss: + 0.8%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
12/18 update: CBD delivered a quiet session on Friday with shares trading in a narrow range. Bears could argue that the action this past week looks like a short-term bearish double top near $41.20. I would argue that the bigger picture is still bullish. Readers could still use dips into the $40.00-38.00 zone as a bullish entry point but you might be better off waiting for the dip and then initiating new positions on the bounce.

FYI: We have a wide stop because CBD can be so volatile. Bear in mind this is a higher-risk trade.

Current Position: Long CBD stock @ $40.25

chart:

Entry on November 23 at $40.25
Earnings Date 03/02/11 (unconfirmed)
Average Daily Volume: 608 thousand
Listed on November 20th, 2010


City National Corp. - CYN - close: 61.14 change: +0.74

Stop Loss: 54.75
Target(s): 60.00, 64.00
Current Option Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/18 update: The relative strength in CYN is encouraging but sadly we're still sitting on the sidelines. I am about ready to give up on CYN and look for a new candidate elsewhere. Short-term CYN is overbought and due for a correction. We want to wait for a dip to $57.00 before initiating positions. However, should CYN find support near $58.00 we could re-evaluate our entry point strategy. If CYN doesn't begin to correct lower soon I'll drop it as a candidate. FYI: The Point & Figure chart is bullish with a $83 target.

Trigger @ $57.00

Suggested Position: buy CYN stock @ $57.00

- or -

Buy the 2011 February $60 calls (cyn1119B60)*

*Caution: most of the option spreads on CYN seem a little too wide. I consider the options a more aggressive trade. You may want to keep your position size small.

chart:

Entry on December xx at $xx.xx
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume: 223 thousand
Listed on December 4th, 2010


JB Hunt Transport Services - JBHT - close: 39.60 change: -0.47

Stop Loss: 36.75
Target(s): 40.70, 43.75
Current Option Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Comments:
12/18 update: The recent bounce in JBHT seems to be failing near $40.00. Big picture the trend is up and we are waiting to buy JBHT on a dip at the $38.00 mark.

FYI: A week ago the NASDAQ announced they were removing JBHT from the NASDAQ-100 index and this removal takes place on Dec. 20th. Firms should start selling shares of JBHT to make room for those stocks being added to the index.

Trigger to buy the dip at $38.00

Suggested Position: Buy JBHT stock @ 38.00

- or -

Buy the 2011 February $40 calls (JBHT1119B40)

chart:

Entry on December xx at $xx.xx
Earnings Date 01/28/11 (unconfirmed)
Average Daily Volume: 1.2 million
Listed on December 13th, 2010


Microsoft Corp. - MSFT - close: 27.90 change: -0.09

Stop Loss: 25.70
Target(s): 27.45, 29.00
Current Gain/Loss: + 9.2%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
12/18 update: It looks like this very impressive rally in MSFT could be losing steam. Shares failed to close over the $28.00 mark on Friday. After a +12% rally from its late November lows it's time for some profit taking. We should expect a correction toward the $27.00-26.50 zone. I am raising our stop loss to $25.70.

Current Position: Long MSFT stock @ 25.55

- or -

Buy the 2011 January $25.00 calls (symbol: MSFT1122A25) Entry @ $1.39

12/18/10 new stop @ 25.70
12/14/10 Target hit @ 27.45 (+7.4%), option @ $2.55 (+83.4%)
12/11/10 New stop @ 25.45
11/29/10 New stop @ 24.70

chart:

Entry on November 17 at $25.55
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume: 68.4 million
Listed on November 15th, 2010


Starbucks Corp. - SBUX - close: 32.79 change: +0.20

Stop Loss: 30.75
Target(s): 34.75
Current Option Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Comments:
12/18 update: SBUX has rallied back toward its 2010 highs but we don't want to buy it here. Let's wait for the next dip. We will adjust our buy-the-dip entry point from $31.25 to $31.75 and raise our stop loss to $30.75. If triggered our target remains at $34.75.

FYI: SBUX is currently in a legal battle with Kraft Foods (KFT) over distribution of SBUX's ground coffee brand but investors seem to be ignoring it.

Trigger @ $31.75 <-- new trigger

Suggested Position: Buy SBUX stock @ $31.25

- or -

Buy the 2011 January $32.00 call (SBUX1122A32)
Buy the 2011 April $33.00 call (SBUX1116D33)

chart:

Entry on December xx at $xx.xx
Earnings Date 01/20/11 (unconfirmed)
Average Daily Volume: 7.1 million
Listed on December 8th, 2010


SAKS Inc. - SKS - close: 11.60 change: -0.07

Stop Loss: 10.90
Target(s): 13.95, 14.95
Current Option Gain/Loss: - 3.1%
Time Frame: 10 to 12 weeks
New Positions: No

Comments:
12/18 update: SKS has spent the last four days trading sideways in a 40-cent range. I remain cautious following the failed rally on Dec. 13th. Conservative traders may want to consider inching up their stop loss. I am not suggesting new bullish positions at this time.

Suggested Position: Long SKS stock @ $11.98

- or -

Buy the 2011 February $12.50 calls (SKS1119B12.5) Entry @ $0.65

chart:

Entry on December 13 at $11.98
Earnings Date 02/22/11 (unconfirmed)
Average Daily Volume: 3.1 million
Listed on December 11th, 2010


Sara Lee Corp - SLE - close: 17.26 change: +0.87

Stop Loss: 15.45
Target(s): 17.00, 17.90
Current Option Gain/Loss: +10.8%
Time Frame: 10 to 12 weeks
New Positions: no

Comments:
12/18 update: Target achieved. Friday was shaping up to be a very quiet day for SLE with the stock trading inside a 15-cent range. That all changed very late in the session when word got out that SLE was considering selling the company. The Wall Street Journal reported that SLE was considering breaking up the company and/or selling a significant portion of their business to Brazilian meat producer JBS. The late afternoon spike on this news pushed shares of SLE to an intraday high of $17.62. Our first target was hit at $17.00. The April $15 calls were trading near $2.00 at the time (they hit $2.15 intraday).

I am not suggesting new positions at this time. We will raise our stop loss to $15.45. Given the possibility that SLE could rally higher on this potential takeover news I am raising our final exit price from $17.90 to $19.75.

Current Position: Long SLE stock @ $15.68

- or -

Long the 2011 April $15.00 calls (SLE1116D15) Entry @ $1.35

12/18/10 New stop @ 15.45, New final target @ 19.75
12/17/10 Target Hit @ 17.00 (+8.4%), option @ $2.00 (+48.1%)

chart:

Entry on December 8 at $15.68
Earnings Date 02/03/11 (unconfirmed)
Average Daily Volume: 7.6 million
Listed on December 7th, 2010


Sony Corp. - SNE - close: 35.39 change: -0.20

Stop Loss: 33.75
Target(s): 36.50, 39.00
Current Option Gain/Loss: unopened
Time Frame: 10 to 12 weeks
New Positions: Yes, see trigger

Comments:
12/18 update: There is no change from my prior comments on SNE. The trend is up but we're waiting for a dip into the $34.50-34.00 zone. Officially our entry point to launch bullish positions is at $34.50. I am raising our stop loss to $33.75.

Trigger @ $34.50

Suggested Position: Buy SNE stock
- or -
Buy the 2011 APRIL $35 calls (SNE1116D35)

chart:

Entry on December xx at $xx.xx
Earnings Date 02/03/11 (unconfirmed)
Average Daily Volume: 888 thousand
Listed on November 23rd, 2010


Trimble Navigation - TRMB - close: 40.08 change: +0.44

Stop Loss: 36.40
Target(s): 41.00, 43.00
Current Option Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Comments:
12/18 update: After three days of losses TRMB managed a little bounce. We still don't want to open positions yet. The stock remains somewhat overbought. Broken resistance near $38.00 should offer some support. I'm suggesting a trigger to launch bullish positions at $38.50.

Trigger @ $38.50

Suggested Position: Buy TRMB stock @ $38.50

- or -

Buy the 2011 February $40.00 calls (TRMB1119B40) current ask $2.35

chart:

Entry on December xx at $xx.xx
Earnings Date 02/02/11 (unconfirmed)
Average Daily Volume: 435 thousand
Listed on December 4th, 2010


Ternium S.A. - TX - close: 39.18 change: +0.06

Stop Loss: 35.85
Target(s): 43.00, 45.00
Current Option Gain/Loss: unopened
Time Frame: 12 to 14 weeks
New Positions: Yes, see trigger

Comments:
12/18 update: TX was showing relative strength on Friday with an unexpected and unexplained +5.25% rally. The breakout past resistance at $40.00 is bullish. Sadly we're not in this play yet. We wanted to buy the dip at $38.25. I would not chase this move. I'm leaving the entry point at $38.25 for now but we will re-evaluate possible changes if we see a correction toward the $40-39 zone.
FYI: The Point & Figure chart for TX is forecasting a bullish target of $48.

Buy-the-Dip Trigger @ $38.25

Suggested Position: Buy TX stock

Note: TX does have options but the spreads are horrendously wide so I'm not suggesting any calls on this trade.

chart:

Entry on December xx at $xx.xx
Earnings Date 02/23/11 (unconfirmed)
Average Daily Volume: 295 thousand
Listed on December 14th, 2010


Wells Fargo & Co - WFC - close: 29.96 change: -0.06

Stop Loss: 27.90
Target(s): 29.25, 31.90
Current Option Gain/Loss: +11.4%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
12/18 update: WFC hovered around the $30.00 mark as investors waited for the December options expiration to pass. The action in the banking indices looks bullish but I would still wait for a bigger pull back in WFC before considering new bullish positions. Currently our final exit target is $31.90 but aggressive traders could aim high (given enough time).

Current Position: Long WFC stock @ $26.88

- or -

Long the 2011 January $27.50 call (WFC1122A27.5) Entry @ $1.16

12/09: New stop loss @ $27.90
12/08: Target Hit $29.25 (+8.8%), Option @ $2.30 (+98.2%)

chart:

Entry on November 30 at $26.88
Earnings Date 01/19/11 (unconfirmed)
Average Daily Volume: 32.7 million
Listed on November 29th, 2010


World Wrestling Entertainment - WWE - close: 14.28 change: +0.07

Stop Loss: 13.75
Target(s): 14.95, 16.40
Current Option Gain/Loss: + 1.2%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
12/18 update: Entry point alert! I have been suggesting readers look for a dip toward $14.00 as our next entry point. WWE slipped to $14.03 on Friday and bounced. If you missed it I would still consider new positions now at current levels.

Suggested Position: Long WWE stock @ $14.10

- or -

Buy the 2011 April $15.00 calls (WWE1116D15), entry @ $0.45

*Note: The call options on WWE have very large spreads, making them a higher-risk trade.

chart:

Entry on December 13 at $14.10
Earnings Date 02/10/11 (unconfirmed)
Average Daily Volume: 242 thousand
Listed on December 9th, 2010