Editor's Note:
Stocks quickly rebound to close at new two-year highs (again). The Dow Jones Transportation Index broke out past resistance near the 5,250 level.

-James

Current Portfolio:


BULLISH Play Updates

Alcoa Inc - AA - close: 17.59 change: +0.19

Stop Loss: 16.25
Target(s): 18.50, 19.75
Current Gain/Loss: - 0.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/16 update: Given the strength in other material names I was disappointed in AA's rally but the stock's +1% gain today did outperform the S&P 500's +0.6%. The 19-cent bounce erased yesterday's loss. I would still consider new positions here but a dip near $17.25 would be more attractive. Our upside targets are $18.50 and $19.90. The early 2010 high near $17.60 could be short-term resistance but the trend for AA looks pretty healthy.

Current Position: Long AA stock @ $17.65

- or -

Long the March $17.00 calls (AA1119C17) Entry @ $0.98

02/14 AA hits our breakout trigger @ 17.65, Stop @ 16.25

Entry on February 14 at $17.65
Earnings Date 04/11/11 (unconfirmed)
Average Daily Volume: 41 million
Listed on February 2nd, 2010


Adobe Systems Inc. - ADBE - close: 34.69 change: +0.75

Stop Loss: 32.45
Target(s): 37.45
Current Gain/Loss: + 2.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/16 update: Our new play in ADBE was a strong performer on Wednesday. Shares opened at $34.00 and settled with a +2.2% gain and a new multi-month high. Intraday the stock hit $35.18. You can buy ADBE now or wait for a dip near $34.00 as your entry point. More conservative traders may want to consider a slightly higher stop loss. Our target is the $37.45 mark. FYI: The Point & Figure chart for ADBE is bullish with a $49.00 target.

Current Position: Long ADBE stock @ $34.00

- or -

Long the April $35 calls (ADBE1116D35) Entry @ $1.34

Entry on February 16 at $34.00
Earnings Date 03/22/11 (unconfirmed)
Average Daily Volume: 5.0 million
Listed on February 15th, 2010


Autodesk, Inc. - ADSK - close: 43.84 change: +1.13

Stop Loss: 39.90
Target(s): 46.00
Current Gain/Loss: + 4.1%
Time Frame: 2 weeks
New Positions: see below

Comments:
02/16 update: ADSK was also showing some relative strength. Shares rallied to $44.44 intraday and settled with a +2.6% gain. Volume was decent. The $43.00 level should now be short-term support. I am raising our stop loss to $40.75 since we only have a few days left. ADSK is due to report earnings on Feb. 23rd (now confirmed) and we do not want to hold over the announcement.

Current Position: Long ADSK stock @ 42.10

- or -

Long the March $45 call (ADSK1119C45) Entry @ $0.90

Entry on February 9 at $42.10
Earnings Date 02/23/11 (unconfirmed)
Average Daily Volume: 2.5 million
Listed on February 7th, 2010


AnnTaylor Stores - ANN - close: 23.97 change: +0.30

Stop Loss: 20.95
Target(s): 25.90, 27.85
Current Gain/Loss: + 0.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/16 update: I am growing more dissatisfied with ANN's performance. Shares did outperform the market today with a +1.2% gain but I'm worried what our opportunity cost might be if our money is tied up in ANN when it could be used somewhere else. I'm not suggesting new bullish positions at this time.

Our targets are $25.90 and $27.85. FYI: The P&F chart is still long-term bullish in spite of the January correction.

Small Positions

Current Position: Long ANN stock @ $23.86

- or -

Long the March $22.50 calls (ANN1119C22.5) Entry @ $2.35

Entry on February 14 at $23.86
Earnings Date 03/11/11 (confirmed)
Average Daily Volume: 3.0 million
Listed on February 8th, 2010


BMC Software - BMC - close: 50.48 change: +0.04

Stop Loss: 46.70
Target(s): 54.50
Current Gain/Loss: + 2.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/16 update: BMC is still consolidating sideways with traders buying the dips near $50.00. I don't see any changes from my prior comments. Our first target is $54.50.

FYI: The Point & Figure chart for BMC is bullish with a $78 target.

Current Position: Long BMC stock @ 49.30

- or -

Long the March $50 call (BMC1119C50) Entry @ $1.40

Entry on February 11 at $49.30
Earnings Date 05/05/11 (unconfirmed)
Average Daily Volume: 1.9 million
Listed on February 10th, 2010


Garmin Ltd. - GRMN - close: 32.29 change: -0.23

Stop Loss: 31.65
Target(s): 35.95
Current Gain/Loss: - 2.1%
Time Frame: six trading days
New Positions: see below

Comments:
02/16 update: Uh-oh! We need to be careful here. With only a few days left before earnings we do not want to see GRMN underperforming the market. Shares lost -0.7% on Wednesday. Readers may want to consider an early exit now to cut their losses. I am not suggesting new positions!

GRMN is due to report earnings on Feb. 23rd and we do not want to hold over the report. FYI: The most recent data listed short interest at 19% of the 106 million-share float.

Open Small Positions

Current Position: Long GRMN stock @ $33.01

- or -

Long the March $34 calls (GRMN1119C34) Entry @ $1.23

Entry on February 14 at $33.01
Earnings Date 02/23/11 (confirmed)
Average Daily Volume: 1.1 million
Listed on February 12th, 2010


Hansen Natural Corp. - HANS - close: 57.26 change: +0.31

Stop Loss: 53.75
Target(s): 59.50
Current Gain/Loss: + 3.1%
Time Frame: just a couple of weeks left.
New Positions: see below

Comments:
02/16 update: HANS is still slowly melting higher. Shares added +0.5% vs. the S&P 500's +0.6% and the NASDAQ composite's +0.7%. I am not suggesting new positions at this time. Small positions only to limit our risk.

- Small Positions to limit our risk -

Current Position: HANS stock @ $55.54

02/12 New stop loss @ 53.75
01/29 Exit call positions early. @ $1.15 (-23.3%)
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


Home Depot - HD - close: 37.86 change: +0.17

Stop Loss: 36.25
Target(s): 39.95
Current Gain/Loss: + 1.0%
Time Frame: 5 trading days
New Positions: see below

Comments:
02/16 update: The slow rally in HD has now hit resistance near $38.00. Will it hold or will HD breakout higher? We want to close this trade on Friday, unless shares hit our target first ($39.95).

Current Position: Long HD stock @ $37.47

- or -

Long the March $38 calls (HD1119C38) Entry @ $0.74

Entry on February 14 at $37.47
Earnings Date 02/22/11 (confirmed)
Average Daily Volume: 9.8 million
Listed on February 12th, 2010


Kennametal Inc. - KMT - close: 41.09 change: -0.09

Stop Loss: 39.90
Target(s): 44.90
Current Gain/Loss: - 0.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/16 update: KMT's performance today was disappointing but volume was very light on the session. Readers may want to wait for a dip closer to the 50-dma (near $40.25) before considering new bullish positions. I am expecting the $45 level to offer some overhead resistance so we'll set our exit target at $44.90.

If you study the chart you'll note that the big down days in late January and early February had some huge volume. That is a worrisome sign so we want to keep our positions small to limit our risk. KMT does have options but they don't have a lot of volume so I'm going to stick to the stock itself.

- Small Bullish Positions -

Suggested Position: Buy KMT stock @ current levels

Entry on February 15 at $41.35
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume: 960 thousand
Listed on February 14th, 2010


Lincare Holdings Inc. - LNCR - close: 29.20 change: +0.31

Stop Loss: 26.90
Target(s): 29.90, 31.75
Current Gain/Loss: + 2.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/16 update: LNCR has broken out past short-term resistance at the $29.00 mark. I am not suggesting new bullish positions at this time.

Previously I cautioned readers that LNCR will probably see some resistance near $29.25 and the $30.00 levels. Today the rally stalled at $29.30.

FYI: The Point & Figure chart for LNCR is bullish with a $40 target. Plus, investors will be interested to note that LNCR has relatively high short interest. The most recent data listed short interest at 11.6% of the 86-million share float. With the recent breakout this stock could see a short squeeze.

- Small Bullish Positions -

Current Position: Long LNCR stock @ 28.37

- or -

Long the March $29.00 calls (LNCR1119C29) Entry @ $0.75

02/12 Adjusted entry point to current levels.

Entry on February 14 at $28.37
Earnings Date 04/19/11 (unconfirmed)
Average Daily Volume: 932 thousand
Listed on February 9th, 2010


Oracle Corp. - ORCL - close: 33.11 change: +0.35

Stop Loss: 31.65
Target(s): 34.90
Current Gain/Loss: + 1.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/16 update: ORCL managed to outpace the rally in the NASDAQ composite today. There is no change from my prior comments. I would look to open new positions near $32.00.

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

small positions to limit our risk.

Current Position: ORCL stock @ $32.62

- or -

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

02/12 New stop loss @ 31.65
02/10 ORCL is improving. This looks like a new entry point.
01/29 Consider an early exit, especially the calls.
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


Solutia Inc. - SOA - close: 25.45 change: +0.16

Stop Loss: 23.65
Target(s): 27.25, 29.50
Current Gain/Loss: + 0.7%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
02/16 update: SOA briefly hit a new all-time high (25.74) before paring its gains. I would still consider new positions on dips near the $25 area.

Current Position: Long SOA stock @ $25.25

- or -

Long the March $25 calls (SOA1119C25) Entry @ $1.35

- or -

Long the June $25 calls (SOA1118F25) Entry @ $2.50

Entry on February 11 at $25.25
Earnings Date 01/26/11
Average Daily Volume: 1.7 million
Listed on February 10th, 2010


The TJX Companies - TJX - close: 49.42 change: +0.12

Stop Loss: 47.45
Target(s): 52.00, 54.50
Current Gain/Loss: + 0.3%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
02/16 update: I remain cautious on TJX. The trade is not performing as expected and we're starting to see some bearish signals, like the MACD on the daily chart. We don't have a lot of time left before earnings. I am reluctant to open new bullish positions at this time. That probably sounds odd after TJX just hit our trigger to open positions yesterday. With the S&P 500 breaking out to new two-year highs we do not want to see TJX struggling with resistance near $50.00. The action on February 11th is starting to look like a bull-trap pattern. I am inclined to close this play early and look elsewhere in the retail space for bullish candidates.

Current Position: long TJX stock @ $49.25

- or -

Long the March $50.00 calls (TJX1119C50) entry @ $1.00

02/15 Triggered @ 49.25
02/12 New trigger @ 49.25, New stop loss @ 47.45

Entry on February 15 at $49.25
Earnings Date 02/23/11 (unconfirmed)
Average Daily Volume: 3.4 million
Listed on February 5th, 2010


Toll Brothers - TOL - close: 21.90 change: +0.44

Stop Loss: 20.49
Target(s): 23.45
Current Gain/Loss: + 1.9%
Time Frame: 6 trading days
New Positions: see below

Comments:
02/16 update: Housing stocks were strong performers today after some encouraging economic data this morning. TOL spiked toward short-term resistance at $22.00 this morning, swooned midday, and then made another rush attempt at $22 this afternoon. I would still consider new bullish positions in the $21.50 area.

There is a chance TOL could see some short covering. The most recent data listed short interest at 13% of the 145 million-share float. Our target is $23.45 but that might be a little too optimistic given our timeframe.

- Small Positions -

Current Position: Long TOL stock @ $21.49

- or -

Long the March $22.50 calls (TOL1119C22.5) Entry @ $0.50

Entry on February 14 at $21.49
Earnings Date 02/23/11 (confirmed)
Average Daily Volume: 2.6 million
Listed on February 12th, 2010


UnitedHealth Group - UNH - close: 42.50 change: +0.47

Stop Loss: 41.25
Target(s): 44.75
Current Gain/Loss: + 3.2%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
02/16 update: UNH has looked like it was going to roll over into a correction for days. It's nice to see some relative strength on Wednesday. Yet I remain cautious and would not open new positions here.

Current Position: UNH stock @ $41.15

02/12: New stop loss @ 41.25
02/12: Exit the call options early (bid $1.47 +22.5%)
02/08: New stop loss @ 40.75

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