Editor's Note:
Word that the Moody's rating agency might downgrade parts of Europe put investors on the defensive. Meanwhile an earnings warning from tech giant Intel (INTC) didn't help matters.

We are removing IAU and NVDA from the newsletter with these trades unopened.

-James

Current Portfolio:


BULLISH Play Updates

AutoNation Inc. - AN - close: 36.78 change: -0.12

Stop Loss: 34.75
Target(s): 39.50
Current Gain/Loss: + 6.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/12 update: AN is holding up reasonably well. The stock recovered off its morning lows to close down -0.3% versus a -1.5% drop in the S&P 500. A breakout past resistance near $37.00 could herald the next leg higher.

Earlier Comments:
Our multi-week target is $39.50. More conservative traders may want to exit in the $37.75 region instead.

current Position: Long AN stock @ $34.45

- or -

Long Jan $35 call (AN1221A35) Entry $1.95

12/03/11 new stop loss @ 34.75
11/30/11 new stop loss @ 33.45

Entry on November 22 at $34.45
Earnings Date 02/02/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on November 21, 2011


Activision Blizzard, Inc. - ATVI - close: 12.12 change: -0.12

Stop Loss: 11.69
Target(s): 13.45
Current Gain/Loss: - 1.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
12/12 update: ATVI retested support near $12.00 again before paring its losses -1%. I am a bit reluctant to launch new positions with the major market indices looking so vulnerable.

current Position: Long ATVI stock @ $12.30

- or -

Long FEB $13 call (ATVI1218B13) Entry $0.42

12/10/11 new stop loss @ 11.69
11/30/11 trade open. ATVI gaps higher at $12.30
11/29/11 ATVI gapped open lower. Trade not open yet.

Entry on November 30 at $12.30
Earnings Date 02/09/12 (unconfirmed)
Average Daily Volume = 14.9 million
Listed on November 28, 2011


Brocade Communications - BRCD - close: 5.52 change: -0.03

Stop Loss: 5.17
Target(s): 6.45
Current Gain/Loss: + 5.1%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
12/12 update: BRCD also recovered off its morning lows and limited its losses to just three cents. Lack of any serious profit taking here is definitely positive. I am raising our stop loss to $5.17. I am not suggesting new positions at this time.

Earlier Comments:
Keep in mind that the simple 200-dma near $5.40 could still be technical resistance. I expect this trade to take many weeks to play out but we're aiming for $6.75. We'll make adjustments to our exit strategy as needed.

current Position: Long BRCD stock @ $5.25

- or -

Long 2012JAN $5.50 call (BRCD1221A5.5) Entry $0.37

12/12/11 new stop loss @ 5.17
12/10/11 new stop loss @ 5.12
12/05/11 new stop loss @ 4.98
12/03/11 new stop loss @ 4.84

Entry on November 28 at $5.25
Earnings Date 02/16/12 (unconfirmed)
Average Daily Volume = 8.6 million
Listed on November 26, 2011


Fuel Systems Solutions, Inc. - FSYS - close: 17.51 change: -0.07

Stop Loss: 16.85
Target(s): 20.50
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
12/12 update: We see a similar story here. FSYS gapped open lower but traders bought the dip this morning and FSYS pared its losses significantly by the closing bell.

I am suggesting we open small bullish positions if FSYS can trade at $18.10 or higher.

Earlier Comments:
We want to keep our position size small to limit our risk.

Trigger @ 18.10 (small positions)

Suggested Position: buy FSYS stock @ $18.10

- or -

buy the 2012Jan $20 call (FSYS1221A20)

12/10/11 adjust strategy to use a trigger at $18.10

Entry on December xx at $ xx.xx
Earnings Date 03/05/12 (unconfirmed)
Average Daily Volume = 282 thousand
Listed on December 06, 2011


Kodiak Oil & Gas - KOG - close: 8.88 change: -0.30

Stop Loss: 8.45
Target(s): 9.45
Current Gain/Loss: +18.2%
Time Frame: two to three months
New Positions: see below

Comments:
12/12 update: Shares of KOG were downgraded this morning, which probably contributed to the stock's underperformance today (-3.2%). There is no change from my prior comments. More conservative traders may want to exit now to lock in a gain. Officially the newsletter is aiming for an exit at $9.45.

We are not suggesting new positions at this time.

current Position: Long the stock @ 7.51

12/10 new stop loss @ 8.45
12/05 KOG gapped higher at $9.13. Exit on the March $7.50 calls at $2.15 (+72%)
12/05 new stop loss @ 8.20
12/03 plan to exit our March $7.50 calls @ Monday's open (currently +60%)
12/01 Readers may want to exit now to lock in a gain (+18.3%). I am adjusting our exit target to $9.45
11/30 new stop loss @ 7.75
11/28 new stop loss @ 7.49
11/23 new stop loss @ 7.38
11/15 gap down at 7.41 and hit 7.21 before bouncing.
11/14 new stop loss @ 7.20
11/14 KOG announces plans to sell an additional 37.5 million shares of new stock
11/08 trade opened at $7.51.

Entry on November 08 at $ 7.51
Earnings Date 03/05/12 (unconfirmed)
Average Daily Volume = 6.6 million
Listed on November 5, 2011


Piper Jaffray Companies - PJC - close: 20.62 change: -1.20

Stop Loss: 20.75
Target(s): 25.75
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
12/12 update: Hmm... financials were underperformers today. PJC really showed some relative weakness with a -5.5% drop. I am tempted to remove this stock from the newsletter. Yet since we're still sitting on the sidelines it doesn't hurt to just wait and watch. We will leave our trigger to open bullish positions at $22.55. More nimble traders might want to consider buying a bounce off the $20.00 level with a very tight stop loss instead.

I would keep position size small to limit our risk.

Trigger @ 22.55 (small positions)

Suggested Position: buy PJC stock @ $22.55

- or -

buy the Jan $22.50 call (PJC1221A22.5)

Entry on December xx at $ xx.xx
Earnings Date 01/25/12 (unconfirmed)
Average Daily Volume = 207 thousand
Listed on December 07, 2011


Trinity Industries - TRN - close: 28.79 change: -0.98

Stop Loss: 28.75
Target(s): 34.75
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
12/12 update: Traders bought the dip in TRN near last week's lows. I don't see any changes from my weekend comments. I am suggesting we use a trigger to open bullish positions at $30.55. If triggered we'll aim for $34.75. More aggressive traders could aim higher.

Trigger @ $30.55

Suggested Position: buy TRN stock @ 30.55

- or -

buy the Jan $30 call (TRN1221A30)

Entry on December xx at $ xx.xx
Earnings Date 02/15/12 (unconfirmed)
Average Daily Volume = 703 thousand
Listed on December 10, 2011


BEARISH Play Updates

Broadcom Corp. - BRCM - close: 29.27 change: -1.02

Stop Loss: 31.20
Target(s): 26.00
Current Gain/Loss: + 4.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/12 update: An earnings warning from Intel (INTC) helped push most of the technology sector lower. BRCM fell -3.3% to set a new 52-week closing low. Last week's high was $31.14. I am lowering our stop loss to $31.20.

Readers may want to consider an early exit soon. BRCM is scheduled to hold their "analyst day" on December 14th. Conservative traders might want to exit prior to this event to avoid any unnecessary headline risk.

Our target is $26.00 although more aggressive traders could aim lower. FYI: The Point & Figure chart for BRCM is bearish with a $21.00 target.

Suggested Position: short BRCM stock @ $30.53

- or -

Long 2012Jan $28 PUT (BRCM1221M28) Entry $0.88

12/12/11 new stop loss @ 31.20
12/05/11 BRCM gapped open higher at $30.53.

Entry on December 05 at $ 30.53
Earnings Date --/--/-- (unconfirmed)
Average Daily Volume = 8.2 million
Listed on December 03, 2011


Ctrip.com Intl. - CTRP - close: 23.24 change: +0.04

Stop Loss: 25.05
Target(s): 20.25
Current Gain/Loss: - 1.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/12 update: Uh-oh! We do not want to see relative strength in our bearish candidates. CTRP gapped open lower at $23.00 (our new entry point) and spent the day bouncing sideways in the $23.00-23.50 zone before settling up four cents. The larger trend is still very negative but readers may want to hesitate on launching new positions.

Earlier Comments:
I do consider this an aggressive trade because CTRP is arguably still short-term oversold here six-days of losses (prior to Friday's bounce). We will use a stop loss at $25.05. You may want to use a tighter stop loss. We are aiming for $20.25. FYI: The Point & Figure chart for CTRP is bearish with a $9.00 target. Note: We want to keep our position size small to limit our risk. CTRP can be a volatile stock and short interest is nearing 10% of the float.

*Small Positions*

current Position: short CTRP stock @ 23.00

- or -

Long 2012Jan $22.50 PUT (CTRP1221M22.5) entry $1.40

12/12/11 CTRP gapped open lower @ 23.00

Entry on December 12 at $23.00
Earnings Date 02/13/12 (unconfirmed)
Average Daily Volume = 5.2 million
Listed on December 10, 2011


PACCAR Inc. - PCAR - close: 38.68 change: -1.42

Stop Loss: 40.55
Target(s): 32.50
Current Gain/Loss: + 1.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/12 update: PCAR produced a sharp spike lower to $37.79 before paring its losses. The stock underperformed with a -3.3% decline. Readers can use this move as a new entry point.

Earlier Comments:
More aggressive traders could place their stop above $41.30 instead. There is possible support near $36.75, near its November low, but we're aiming for $32.50.

(Small Positions)

current Position: short PCAR stock @ $39.11

- or -

Long 2012Jan $36 PUT (PCAR1221M36) Entry $0.80

Entry on December 09 at $39.11
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 2.7 million
Listed on December 08, 2011


AT&T Inc. - T - close: 29.01 change: -0.02

Stop Loss: 30.05
Target(s): 24.25 or 22.75
Current Gain/Loss: + 1.3%
Time Frame: 6 to 9 weeks or more
New Positions: see below

Comments:
12/12 update: Monday proved to be a quiet day for shares of AT&T. The stock hovered near the $29.00 level all session long. Readers can watch for a new failed rally near $29.40 or resistance near $29.50 as a new entry point for bearish positions.

current Position: short T stock @ 29.40

- or -

Long 2012Jan $27.50 PUT (T1221M27.5) Entry $0.31

- or -

Long Mar $26 PUT (T1217O26) Entry $0.42

Entry on December 07 at $29.40
Earnings Date 01/26/12 (unconfirmed)
Average Daily Volume = 23.4 million
Listed on November 26, 2011


CLOSED BULLISH PLAYS

iShares Gold ETF - IAU - close: 16.25 change: -0.43

Stop Loss: 16.85
Target(s): 19.75*
Current Gain/Loss: unopened
Time Frame: 6 to 9 weeks or more
New Positions: see below

Comments:
12/12 update: Gold prices took a dive today. The GLD fell -2.6% while IAU dropped -2.5%. This ETF actually gapped open lower near its 150-dma and closed there.

I am removing IAU from the newsletter. Our plan to open bullish positions at $17.25 is unlikely to happen any time soon. Today's drop looks like a breakdown under the eight-week trend of higher lows. However, I will point out that on a longer-term time horizon this dip to the rising 150-dma might actually be a bullish entry point. Traders bought the dip in the IAU at the 150-dma back in October, in September, and back in January of this year.

Trade Did Not Open!

chart:

Entry on December xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 5.0 million
Listed on December 03, 2011


NVIDIA Corp. - NVDA - close: 14.53 change: -0.37

Stop Loss: 14.35
Target(s): 15.95 or 16.95
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks,
New Positions: see below

Comments:
12/12 update: Our new entry point on NVDA was not triggered. This weekend we adjusted our plan to open bullish positions if both NVDA and the S&P 500 opened higher. Shares of NVDA gapped open lower this morning. The stock fell to new two-week lows.

I am temporarily giving up on NVDA as a candidate. We are dropping it from the newsletter with the trade unopened.

Trade Did Not Open!

12/12/11 Trade did not open. We are removing it from the newsletter
12/10/11 Adjusting our entry strategy. Open small bullish positions on Monday morning if NVDA meets our entry criteria. New stop loss @ 14.35.

chart:

Entry on December xx at $ xx.xx
Earnings Date 02/16/12 (unconfirmed)
Average Daily Volume = 18.5 million
Listed on December 03, 2011