Editor's Note:
The stock market continues to march higher as we move deeper into earnings season. Big cap tech titan MSFT reports earnings on Thursday night. We do not want to hold over the announcement.

-James

Current Portfolio:


BULLISH Play Updates

BE Aerospace Inc. - BEAV - close: 39.55 change: +0.65

Stop Loss: 37.75
Target(s): 43.40
Current Gain/Loss: + 1.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/26 update: The rebound in BEAV continues. Shares are now above short-term resistance at $39.00 again and face round-number resistance at $40.00. The trend of higher lows is still intact. Strong volume on today's rally is encouraging. We can initiate new positions here but keep your position size small to limit your risk.

- (small positions to limit risk) -

Current Position: BEAV stock @ $38.89

- or -

Long the 2011 February $40.00 calls (BEAV1119B40) Entry @ $1.35

01/15: new stop loss @ 37.75

Entry on January 11 at $38.89
Earnings Date 02/01/11 (unconfirmed)
Average Daily Volume: 542 thousand
Listed on January 10th, 2010


Walt Disney Co. - DIS - close: 39.44 change: -0.42

Stop Loss: 37.85
Target(s): 39.90, 42.50
Current Gain/Loss: + 3.1%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
01/26 update: DIS is fading from resistance near $40.00. I am not suggesting new positions at this time.

Our first target has already been hit. We're currently aiming for $42.50.

- Current Positions -

Long DIS stock @ 38.25

- or -

Long the 2011 February $40.00 calls (DIS1119B40) Entry @ $0.45

- or -

Long the 2011 April $40.00 calls (DIS1116D40) Entry @ $1.10

01/19: Consider an early exit from the option positions.
01/15: New stop loss @ 37.85
01/05: 1st Target Hit. Stock @ 39.90 (+4.3%)
01/05: 1st Target Hit. Feb. call @ $1.20 (+166%). April call @ 1.80 (+63.6%)
01/05: new stop loss @ 37.49
01/04: Play triggered @ 38.25

Entry on January 4 at $38.25
Earnings Date 02/08/11 (confirmed)
Average Daily Volume: 8.6 million
Listed on December 25th, 2010


FLIR Systems Inc. - FLIR - close: 30.50 change: +0.56

Stop Loss: 28.90
Target(s): 30.90, 33.00
Current Option Gain/Loss: + 4.8%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
01/26 update: FLIR displayed relative strength with a +1.8% gain and a breakout over resistance near 430.00. Shares hit $30.74 intraday. Our first target is $30.90. Readers could buy this breakout but if you do keep your position size small. Honestly, I'm starting to think there are better candidates than FLIR for our money right now.

Current Position: Long FLIR stock @ $29.10

- or -

Long the 2011 April $30.00 calls (FLIR1116D30) Entry @ $1.60

01/25: New stop @ 28.90
01/19: Consider an early exit from the option position (bid $1.30)
01/15: New stop loss @ 28.49
01/10: FLIR provided another entry point near $28.50
01/08: New stop loss @ 27.90

Entry on December 22 at $29.10
Earnings Date 02/09/11 (confirmed)
Average Daily Volume: 1.6 million
Listed on December 18th, 2010


Hansen Natural Corp. - HANS - close: 56.00 change: +0.70

Stop Loss: 53.40
Target(s): 59.50
Current Gain/Loss: + 0.8%
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
01/26 update: The market strength allowed HANS to tag another high, this time at $56.66. Shares opened at $55.54 (our entry point). I would still consider new positions here or on a dip toward the 10-dma (currently near $54.70). Our target is $59.50. Small positions only to limit our risk.

- Small Positions to limit our risk -

Current Position: HANS stock @ $55.54

- or -

Long the March $60 calls (HANS1119C60) Entry @ $1.50

01/26 the CBOE listed the MAR $60 call's open @ $1.50

Entry on January 26 at $55.54
Earnings Date 02/24/11 (unconfirmed)
Average Daily Volume: 654 thousand
Listed on January 25th, 2010


Microchip Technology - MCHP - close: 37.43 change: +0.11

Stop Loss: 35.95
Target(s): 39.95
Current Gain/Loss: +1.1%
Time Frame: 2 weeks
New Positions: Yes, see below

Comments:
01/26 update: MCHP hit another new two-year high intraday at $37.65. There is no change from my prior comments. Our plan was to use small positions to limit our risk. I would still consider new positions on a dip near the 10-dma. Our first target is $39.90. We will plan to exit ahead of the February 2nd earnings report.

small bullish positions

Current Position: MCHP stock @ $37.00

- or -

Long the 2011 February $38 call (MCHP1119B38) Entry @ $0.55

01/25 The CBOE listed the call option's open at $0.55

Entry on January 25 at $37.00
Earnings Date 02/02/11 (unconfirmed)
Average Daily Volume: 1.6 million
Listed on January 24th, 2010


Microsoft Corp. - MSFT - close: 28.78 change: +0.33

Stop Loss: 27.85
Target(s): 27.45, 29.75
Current Gain/Loss: +12.6%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
01/26 update: This is it! Tomorrow is our last day for this trade. We want to exit on Thursday at the closing bell to avoid holding over the company's earnings release. Wall Street expects to see a profit of 68 cents a share. Please note our new stop loss at $27.95.

Current Position: Long MSFT stock @ 25.55

01/26/11 New stop loss @ 27.95, exit tomorrow
01/19/11 New stop loss @ 27.85
01/15/11 New stop loss @ 27.49
01/14/11 Follow up. Exit Jan $25 calls @ 3.25 (+133.9%)
01/13/11 Plan to exit our January calls tomorrow at the close.
01/06/11 raised final exit target to $29.75
01/06/11 new stop loss @ 26.95
12/25/10 new stop @ 25.95
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

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


NASDAQ OMX Group - NDAQ - close: 24.51 change: +0.21

Stop Loss: 23.49
Target(s): 26.50
Current Gain/Loss: + 2.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/26 update: The NDAQ is still drifting higher. There is no change from my prior comments. We're cautiously bullish but reluctant to open new positions. It was our plan to keep positions very small to limit our risk.

Current Position: Long NDAQ stock @ $24.00

01/22: New stop loss @ 23.49

Entry on January 19 at $24.00
Earnings Date 02/02/11 (unconfirmed)
Average Daily Volume: 1.5 million
Listed on January 18th, 2010


SXC Health Solutions - SXCI - close: 46.62 change: +0.98

Stop Loss: 43.40
Target(s): 49.00
Current Gain/Loss: + 5.2%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
01/26 update: SXCI was showing relative strength. The stock added +2% and closed at new all-time highs. There is no change from my prior comments. Readers might want to consider a tighter stop closer to $44. I'm not suggesting new bullish positions at this time.

NOTE: Buying the options is a higher-risk trade. The calls on SXCI have wider than normal spreads put option traders at a disadvantage here.

Suggested Positions: Long SXCI stock @ $44.31

- or -

Long the 2011 February $45.00 calls (SXCI1119B45) Entry @ $1.44

01/22: New stop loss @ 43.40, Consider an early exit.
01/19: New stop loss @ 42.65

Entry on January 10 at $44.31
Earnings Date 03/03/11 (unconfirmed)
Average Daily Volume: 292 thousand
Listed on January 8th, 2010


UnitedHealth Group - UNH - close: 40.25 change: -0.37

Stop Loss: 36.90
Target(s): 42.00
Current Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Comments:
01/26 update: The early morning rally in UNH failed at resistance near $41.00. There is no change from my prior comments. We're still waiting for a pull back toward support near $38.00. I am suggesting we launch bullish positions on a dip at $38.10 with a stop loss at $36.90. Our multi-week target is the $42.00 level.

Buy-the-Dip Trigger @ $38.10

Suggested Position: Buy UNH stock @ $38.10

- or -

Buy the 2011 March $40 calls (UNH1119C40) current ask $1.74

Entry on January xx at $xx.xx
Earnings Date 01/20/11 (unconfirmed)
Average Daily Volume: 5.9 million
Listed on January 20th, 2010


WellCare Health Plans, Inc. - WCG - close: 30.75 change: +0.12

Stop Loss: 29.85
Target(s): 33.75, 37.75
Current Gain/Loss: - 0.0%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
01/26 update: We're back to breakeven. Shares are still trying to bounce from support near $30.00. I would be tempted to launch new positions here. Keep your position size small to limit your risk. Readers could inch up their stops closer to the $30.00 mark.

Keep in mind that investors will have to decide whether or not they are willing to take the risk of holding over WCG's earnings report in late February.

Current Position: WCG stock @ $30.75

- or -

Long the 2011 March $35.00 calls (WCG1119C35) Entry @ $0.60

01/15: new stop loss @ 29.85
01/06: Play triggered @ 30.75.

Entry on January 6 at $30.75
Earnings Date 02/17/11 (unconfirmed)
Average Daily Volume: 410 thousand
Listed on January 4th, 2010


BEARISH Play Updates

Endo Pharmaceuticals - ENDP - close: 34.00 change: +0.08

Stop Loss: 35.75
Target(s): 31.00
Current Gain/Loss: unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Comments:
01/26 update: ENDP rallied to $34.26 intraday before fading back toward the $34 level. There is no change from my Monday night comments. The plan is to open bearish positions on a bounce at $34.50. We'll try and limit our risk with a stop loss at $35.75. If triggered our first target is $31.00.

Trigger @ $34.50

Suggested Position: Short ENDP stock @ 34.50

- or -

Buy the 2011 February $35 PUT (ENDP1119N35)

Entry on January xx at $xx.xx
Earnings Date 02/22/11 (unconfirmed)
Average Daily Volume: 1.3 million
Listed on January 24th, 2010


Informatica Corp. - INFA - close: 43.79 change: +1.39

Stop Loss: 44.25
Target(s): 39.00, 36.00
Current Gain/Loss: + 3.7%
Time Frame: 4 trading days
New Positions: see below

Comments:
01/26 update: Uh-oh! The market's rally today inspired a rebound in INFA. Shares closed above their 50-dma but still below resistance near $44.00. Unfortunately we're almost out of time. The plan is to exit positions tomorrow (Thursday) at the closing bell to avoid holding over earnings. More aggressive traders might want to consider holding over the announcement given the stock's big run up. Shares could see some post-earnings sell-the-news, profit taking sort of move tomorrow. Obviously that depends on what the results are.

Our plan was to use small positions to limit our risk.

small positions

Current Position: Short INFA stock @ 42.20

- or -

Long the February $40 PUT (INFA1119N40) Entry @ $0.85

01/24 CBOE listed the PUT's opening price at $0.85

Entry on January 24 at $42.20
Earnings Date 01/27/11 (confirmed)
Average Daily Volume: 907 thousand
Listed on January 22nd, 2010


Reliance Steel - RS - close: 53.79 change: +1.77

Stop Loss: 55.05
Target(s): 45.05
Current Gain/Loss: + 4.6%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
01/26 update: I didn't see any news on RS this morning so the sharp move higher looks like short covering. Shares have rallied to resistance near $54.00 and on healthy volume. If this stock breaks out past $55.00 I would be tempted to open bullish positions. For now I'm not suggesting any positions. Let's wait and see if the resistance near $54.00 holds or not. Our stop is at $55.05. There is potential support near $48 but I'm targeting a drop toward the $45 level and its 200-dma. We do not want to hold over the earnings in mid February.

Current Position: Short RS stock @ $51.41

- or -

Long the February $50 PUT (RS1119N50) Entry @ $1.35

01/24 CBOE listed the $50 PUT opening price at $1.35

Entry on January 24 at $51.41
Earnings Date 02/17/11 (unconfirmed)
Average Daily Volume: 654 thousand
Listed on January 22nd, 2010