Editor's Note:
ANN and SXCI were both upgraded today. The move in SXCI was substantial and we want to go ahead and exit our call options for a gain. We had planned to exit our MSFT and INFA trades at the close today. Meanwhile ENDP hit our trigger to open bearish positions.

-James

Current Portfolio:


BULLISH Play Updates

Ann Taylor Stores Corp. - ANN - close: 22.30 change: +0.24

Stop Loss: 20.80
Target(s): 24.00, 25.00
Current Gain/Loss: - 1.8%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
01/27 update: Love them or hate them the timing of Wall Street's upgrades and downgrades can either be a boon or a curse. This morning ANN was upgraded from a "hold" to a "buy". Unfortunately that sent the stock gapping open higher. Our entry point was the morning print at $22.73. Shares faded from their morning gains. I would still consider new positions here or on dips near $21.00. Remember, this is a higher-risk trade. Our first target is $24.00. Keep your position size small to limit our risk.

Small Bullish Positions

Current Position: ANN stock @ $22.73

- or -

Long the 2011 February $24 calls (ANN1119B24) Entry @ $0.50

01/27 Entry point at $22.73, gap open on broker upgrade.

Entry on January 27 at $22.73
Earnings Date 03/11/11 (unconfirmed)
Average Daily Volume: 2.5 million
Listed on January 26th, 2010


BE Aerospace Inc. - BEAV - close: 39.70 change: +0.15

Stop Loss: 37.75
Target(s): 43.40
Current Gain/Loss: + 2.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/27 update: Hmmm... BEAV failed at the $40.25 area for the second day in a row. I would expect a pull back toward the $39 or $38 level soon. No new positions at this time.

- (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: 39.46 change: +0.02

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:
01/27 update: Thursday was a quiet day for DIS with the stock trading sideways in a narrow range. 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: 30.64 change: +0.14

Stop Loss: 28.90
Target(s): 30.90, 33.00
Current Option Gain/Loss: + 5.2%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
01/27 update: FLIR almost hit our first target today with a rise to $30.88. Broken resistance near $30.00 should now act as new short-term support. I am reluctant to open new positions. (FYI: The April $30 call hit $1.85 intraday)

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: 55.65 change: -0.35

Stop Loss: 53.40
Target(s): 59.50
Current Gain/Loss: + 0.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/27 update: HANS delivered a quiet session. I strongly suspect that if we're patient we'll see another entry point on a dip near $54.50 soon. 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: 37.89 change: +0.46

Stop Loss: 35.95
Target(s): 39.95
Current Gain/Loss: +2.4%
Time Frame: 2 weeks
New Positions: see below

Comments:
01/27 update: Our trade in MCHP suddenly got a lot more exciting but more on that in a moment. The SOX semiconductor index outperformed the market with a +1.8% gain. MCHP tried to keep up but only rose +1.2%. This is a new two-year high but I want to point out that MCHP has potential resistance in the $38.25 area.

Now to the exciting part. Previously we thought MCHP was going to report earnings in early February. Unfortunately that date was unconfirmed. MCHP actually reported earnings tonight, Jan. 27th, after the closing bell. Wall Street was expecting a profit of 57 cents a share. The company delivered 58 cents on revenues that also beat the street's expectations. Guidance was only inline with consensus.

At the moment I am not seeing any after hours action in MCHP. However, just meeting or slightly beating earnings estimates has not been good enough lately. I would expect MCHP to see some profit taking tomorrow. The question is will this profit taking breakdown through support near $36.00? I am not suggesting new positions at this time.

small bullish positions

Current Position: MCHP stock @ $37.00

- or -

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

01/27 MCHP unexpectedly reports earnings
01/25 The CBOE listed the call option's open at $0.55

Entry on January 25 at $37.00
Earnings Date 01/27/11 (confirmed)
Average Daily Volume: 1.6 million
Listed on January 24th, 2010


NASDAQ OMX Group - NDAQ - close: 25.21 change: +0.70

Stop Loss: 23.85
Target(s): 26.50
Current Gain/Loss: + 5.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/27 update: NDAQ surged +2.8% to new 52-week highs on above average volume. I couldn't find any news to account for this relative strength. Currently our target to exit is $26.50 but readers may want to adjust that target down to $26.00. I am moving our stop loss higher to $23.85. It was our plan to keep positions very small to limit our risk.

Current Position: Long NDAQ stock @ $24.00

01/27: New stop loss @ 23.85
01/22: New stop loss @ 23.49

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


Oracle Corp. - ORCL - close: 32.92 change: +0.36

Stop Loss: 31.40
Target(s): 34.90
Current Gain/Loss: + 0.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/27 update: So far so good. ORCL opened at $32.62 and posted a +1.1% gain to set new multi-year highs. Nimble traders could have bought the dip at $32.16. I would still consider new bullish positions in the $32-33 zone.

Our target on ORCL is the $34.90 mark since $35.00 looks like the next level of resistance.

small positions

Current Position: ORCL stock @ $32.62

- or -

Long the 2011 March $33 calls (ORCL1119C33) Entry @ $0.80

01/27 The CBOE listed the open for our calls at $0.80

Entry on January 27 at $32.62
Earnings Date 03/24/11 (unconfirmed)
Average Daily Volume: 27 million
Listed on January 26th, 2010


SXC Health Solutions - SXCI - close: 48.54 change: +1.92

Stop Loss: 43.40
Target(s): 49.00
Current Gain/Loss: + 9.5%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
01/27 update: SXCI surged to new highs with a +4.1% gain thanks to an upgrade this morning. I blame a small float (60 million shares) for exaggerating the move. SXCI hit $48.93 intraday and our exit target has been $49.00. Please note that I am raising our stop loss to $44.90. Plus, I am suggesting we go ahead and exit our call position now! We will update them at tomorrow's open. 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

01/27: Exit Calls Now! Currently bid @ $3.50 (+143%)
01/27: New stop loss @ 44.90
01/22: New stop loss @ 43.40, Consider an early exit.
01/19: New stop loss @ 42.65

chart:

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: 42.29 change: +2.04

Stop Loss: 40.45
Target(s): 44.75
Current Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Comments:
01/27 update: It's days like today I'm tempted to use foul language when I see a move like UNH when we've been waiting for an entry point. Shares rallied +5% after breaking out past resistance near the $41.00 level.

I am suggesting we adjust our strategy. Buy a dip at $41.15. Use a stop loss at $40.45. Our target is $44.75.

Buy-the-Dip Trigger @ $41.15

Suggested Position: Buy UNH stock @ $41.15

- or -

Buy the 2011 March $42 calls (UNH1119C42)

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: 31.24 change: +0.49

Stop Loss: 29.85
Target(s): 33.75, 37.75
Current Gain/Loss: + 1.5%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
01/27 update: Strength in the healthcare sector helped WCG post a +1.5% gain. I would still be tempted to launch small positions here. 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: 34.32 change: +0.32

Stop Loss: 35.75
Target(s): 31.00
Current Gain/Loss: - 0.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/27 update: Our bearish play on ENDP is now open. Shares rallied to $34.54 late this afternoon. Our trigger to launch positions was hit at $34.50. I would still consider new positions right now. We'll try and limit our risk with a stop loss at $35.75. Our first target is $31.00.

Current Position: Short ENDP stock @ 34.50

- or -

Long the 2011 February $35 PUT (ENDP1119N35) Entry @ $1.30

chart:

Entry on January 27 at $34.50
Earnings Date 02/22/11 (unconfirmed)
Average Daily Volume: 1.3 million
Listed on January 24th, 2010


Reliance Steel - RS - close: 53.40 change: -0.39

Stop Loss: 55.05
Target(s): 45.05
Current Gain/Loss: + 3.8%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
01/27 update: There was no follow through on yesterday's big bounce but we remain at risk. I am not suggesting new bearish positions at this time. 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


CLOSED BULLISH PLAYS

Microsoft Corp. - MSFT - close: 28.87 change: +0.09

Stop Loss: 27.85
Target(s): 27.45, 29.75
Current Gain/Loss: +12.99%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
01/27 update: MSFT was another earnings surprise. The surprise was the company's earnings announcement right before the closing bell. Everyone was expecting the release after the market's close. MSFT delivered a profit of 77 cents a share, which was 9 cents better than expected. Revenues also outpaced estimates at $19.9 billion for the quarter. The stock briefly rallied to $29.46 before reversing and giving back its late day gains.

It was our plan to exit positions tonight at the closing bell.

Closed Position: Long MSFT stock @ 25.55

01/27/11 Exit at the close. MSFT @ 28.87 (+12.99%)
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

chart:

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


CLOSED BEARISH PLAYS

Informatica Corp. - INFA - close: 42.57 change: -1.22

Stop Loss: 44.25
Target(s): 39.00, 36.00
Current Gain/Loss: + 0.8%
Time Frame: 4 trading days
New Positions: see below

Comments:
01/27 update: INFA is seeing some volatility ahead of its earnings report. After yesterday's big bounce the stock immediately reversed after hitting $44.14 this morning. The move looks bearish but we already had plans to exit positions tonight at the closing bell to avoid holding over INFA's earnings announcement. Our plan was to use small positions to limit our risk.

small positions

Closed Position: Short INFA stock @ 42.20, Exit @ 42.57 (+0.8%)

- or -

February $40 PUT (INFA1119N40) Entry @ $0.85, Exit @ $1.00 (+17.6%)

01/27 Planned Exit on Thursday
01/27 Exit INFA @ 42.57 (-0.8%), Exit option @ $1.00 (+17.6%)
01/24 CBOE listed the PUT's opening price at $0.85

chart:

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