Editor's Note:
We're seeing a lot of bearish reversals across the market. If the market sees any follow through lower it's going to be painful for the bulls. I am suggesting an early exit in several candidates tonight.

-James

Current Portfolio:


BULLISH Play Updates

Walt Disney Co. - DIS - close: 38.85 change: -0.61

Stop Loss: 37.85
Target(s): 39.90, 42.50
Current Gain/Loss: + 1.5%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
01/29 update: Readers might want to exit our DIS play early. The company is due to report earnings on February 8th, after the closing bell. That gives us seven trading days since we do not want to hold over the earnings announcement. The next seven trading days are likely to be troublesome for the market. While DIS should have support near $38.00 there is no guarantee it will hold. Thus readers might want to exit all of their positions now.

Speaking of exiting positions the newsletter will close the February $40 call and April $40 call positions now. I am not suggesting new positions at this time.

- Current Positions -

Long DIS stock @ 38.25

- or -

2011 February $40 calls (DIS1119B40) Entry @ $0.45, Exit @ 0.38 (-15.5%)

- or -

2011 April $40 calls (DIS1116D40) Entry @ $1.10, Exit @ 1.02 (-7.2%)

01/29: Exit call positions. Feb call @ 0.38 (-15.5%) April call @ 1.02 (-7.2%)
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

chart:

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: 30.63 change: -0.01

Stop Loss: 29.75
Target(s): 30.90, 33.00
Current Option Gain/Loss: + 5.2%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
01/29 update: Target achieved. FLIR spiked to $31.20 on Friday but eventually gave back all of its gains. Our first target to take profits was hit at $30.90. The April $30 calls were trading near $2.00 at the time. I am suggesting we go ahead and completely exit any remaining call positions now (currently bidding $1.80 +12.5%). We'll maintain the remainder our stock position but raise our stop loss to $29.75. This gives the $30.00 level a chance to act as support.

Current Position: Long FLIR stock @ $29.10

- or -

2011 April $30 calls (FLIR1116D30) Entry @ $1.60, exit @ 1.80 (+12.5%)

01/29 Exit remaining call positions. option @ 1.80 (+12.5%)
01/29: New stop loss @ 29.75
01/28: 1st Target Hit @ 30.90 (+6.1%), option @ $2.00 (+25%)
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

chart:

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: 55.15 change: -0.50

Stop Loss: 53.40
Target(s): 59.50
Current Gain/Loss: - 0.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/29 update: HANS garnered some positive analyst comments on Friday and received a $71 price target. Yet the early morning spike in HANS faded and shares closed in the red. Even the strongest stock can turn lower if the market is in correction mode. Just to be safe I want to exit our call positions now to limit our losses. I am not suggesting new positions at this time. More conservative traders may want to exit their stock positions too. Small positions only to limit our risk.

- Small Positions to limit our risk -

Current Position: HANS stock @ $55.54

- or -

March $60 calls (HANS1119C60) Entry @ $1.50, Exit @ $1.15 (-23.3%)

01/29 Exit call positions early. @ $1.15 (-23.3%)
01/26 the CBOE listed the MAR $60 call's open @ $1.50

chart:

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


Oracle Corp. - ORCL - close: 32.00 change: -0.92

Stop Loss: 31.40
Target(s): 34.90
Current Gain/Loss: - 1.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/29 update: Warning! ORCL produced a bearish engulfing (reversal) candlestick pattern on Friday. The stock should have some support near $31.50 but I am not suggesting new positions at this time. More conservative traders will want to exit their call positions now just to be safe and limit losses. No new positions at this time. Let's see if ORCL confirms this bearish reversal or not.

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

01/29 Consider an early exit, especially the calls.
01/27 The CBOE listed the open for our calls at $0.80

chart:

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


UnitedHealth Group - UNH - close: 40.93 change: -1.36

Stop Loss: 40.45
Target(s): 44.75
Current Gain/Loss: - 0.5%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
01/29 update: Warning! UNH has reversed sharply with Friday's -3.2% loss. Shares hit our newly adjusted buy-the-dip entry point at $41.15. Yet given the market's sell-off on Friday I'm not sure we want to be long any more. The trade is open and we have a stop loss at $40.45 but I am not suggesting new positions at this time. I would strongly encourage readers to exit their call positions even though we just opened them. Odds are good we could get stopped out on Monday.

Current Position: UNH stock @ $41.15

- or -

Long the 2011 March $42 calls (UNH1119C42) Entry @ $1.20

chart:

Entry on January 28 at $41.15
Earnings Date 01/20/11 (unconfirmed)
Average Daily Volume: 5.9 million
Listed on January 20th, 2010


BEARISH Play Updates

Endo Pharmaceuticals - ENDP - close: 33.53 change: -0.79

Stop Loss: 35.75
Target(s): 31.00, 30.10
Current Gain/Loss: - 2.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/29 update: ENDP gave up -2.3% after failing at the $34.50 level. I would still consider new bearish positions now. More conservative traders might want to consider a tighter stop loss. I am adding a secondary target at $30.10. 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: 52.19 change: -1.21

Stop Loss: 55.05
Target(s): 45.05
Current Gain/Loss: + 1.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/29 update: RS has failed three days in a row at the $54.00 level. I am suggesting new bearish positions now at current levels. More conservative traders may want to move their stop loss closer to the $54 mark. 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

01/29 New entry point for bearish positions.
01/24 CBOE listed the $50 PUT opening price at $1.35

chart:

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

Ann Taylor Stores Corp. - ANN - close: 21.85 change: -0.45

Stop Loss: 20.80
Target(s): 24.00, 25.00
Current Gain/Loss: - 3.8%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
01/29 update: The RLX retail index has reversed from a bullish breakout to a bearish breakdown. If we're not going to see support from the sector then we don't want to own ANN. This stock still has support near $21 and its 200-dma but I'm betting it will fail. You can keep ANN on your watch list for a drop toward the $18 area. I'm suggesting an early exit now. It was our plan to keep your position size small to limit our risk. This was a higher-risk trade.

Small Bullish Positions

Closed Position: ANN stock @ $22.73, exit @ $21.85 (-3.8%)

- or -

2011 February $24 calls (ANN1119B24) Entry @ $0.50, exit @ 0.20 (-60%)

01/29 Exit early. ANN @ 21.85 (-3.8%) option @ 0.20 (-60%)
01/27 Entry point at $22.73, gap open on broker upgrade.

chart:

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: 38.24 change: -1.46

Stop Loss: 37.75
Target(s): 43.40
Current Gain/Loss: - 1.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/29 update: We want to exit our BEAV trade early. Shares were struggling with the $40 level and Friday's market drop pulled BEAV back down to recent support near $38.00. We only have a few days left before BEAV reports earnings on Feb. 3rd so I'm suggesting an early exit now.

- (small positions to limit risk) -

Closed Position: BEAV stock @ $38.89, exit @ 38.24 (-1.6%)

- or -

2011 Feb. $40 calls (BEAV1119B40) Entry @ $1.35, Exit @ 0.65 (-51.8%)

01/29: Exit Early. BEAV @ 38.24 (-1.6%), option @ 0.65 (-51.8%)
01/15: new stop loss @ 37.75

chart:

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


Microchip Technology - MCHP - close: 36.89 change: -1.00

Stop Loss: 35.95
Target(s): 39.95
Current Gain/Loss: -0.3%
Time Frame: 2 weeks
New Positions: see below

Comments:
01/29 update: It's time to abandon ship. MCHP spiked higher to $38.25 on Friday morning but the stock could hold it and reversed (On Thursday I warned you $38.25 was resistance). Shares have produced a bearish reversal on both the daily and weekly charts. The low was $36.65. I am suggesting an early exit now.

small bullish positions

Closed Position: MCHP stock @ $37.00, exit @ 36.89 (-0.3%)

- or -

2011 February $38 call (MCHP1119B38) Entry @ $0.55, exit 0.25 (-54.5%)

01/29 Exit Early. MCHP @ 36.89 (-0.3%) Option @ 0.25 (-54.5%)
01/27 MCHP unexpectedly reports earnings
01/25 The CBOE listed the call option's open at $0.55

chart:

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: 24.50 change: -0.71

Stop Loss: 23.85
Target(s): 26.50
Current Gain/Loss: + 2.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/29 update: Watch out! NDAQ completely reversed Thursday's big gains. The overall trend is still up but I'm suggesting an early exit anyway. NDAQ is due to report earnings on Feb. 2nd and we don't want to hold over the announcement. Let's exit now. It was our plan to keep positions very small to limit our risk.

closed Position: Long NDAQ stock @ $24.00, exit @ 24.50 (+2.0%)

01/29: Exit early @ $24.50 (+2.0%)
01/27: New stop loss @ 23.85
01/22: New stop loss @ 23.49

chart:

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


SXC Health Solutions - SXCI - close: 46.79 change: -1.75

Stop Loss: 43.40
Target(s): 49.00
Current Gain/Loss: + 5.6%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
01/29 update: The market's sell-off on Friday cut our SXCI gains almost in half. Shares spiked to $49.00 Friday morning but only made it to $48.92 before reversing. Our target to exit was $49.00. Unfortunately, I'm giving up and suggesting an early exit now. On Thursday I suggested an early exit on the call option position. It looks like they opened at $4.00 on Friday.

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.

Closed Positions: Long SXCI stock @ $44.31, exit $46.79 (+5.6%)

01/29: Exit early. SXCI stock @ 46.79 (+5.6%)
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


WellCare Health Plans, Inc. - WCG - close: 30.06 change: -1.18

Stop Loss: 29.85
Target(s): 33.75, 37.75
Current Gain/Loss: - 2.2%
Time Frame: 10 to 12 weeks
New Positions: see below

Comments:
01/29 update: I am suggesting an early exit out of our WCG play. Shares briefly dipped under support at $30.00 but only hit $29.91 intraday. The $30.00 level could still hold as support but I doubt it. Shares have arguably formed a bearish head-and-shoulders pattern over the last four weeks. Let's cut our losses now.

Closed Position: WCG stock @ $30.75, exit @ 30.06 (-2.2%)

- or -

2011 March $35 calls (WCG1119C35) Entry @ $0.60, Exit @ 0.35 (-41.6%)

01/29: Early Exit @ 30.06 (-2.2%), option @ 0.35 (-41.6%)
01/15: new stop loss @ 29.85
01/06: Play triggered @ 30.75.

chart:

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