Editor's Note:
The small cap Russell 2000 index lost -2.1% versus -1.2% in the S&P 500.

All of our Premier Investor trading candidates turned lower. Readers may want to double check their stop loss placement. The market might sink toward year-end.

-James

Current Portfolio:


BULLISH Play Updates

GlaxoSmithKline - GSK - close: 45.29 change: -0.45

Stop Loss: 44.40
Target(s): 49.25
Current Gain/Loss: - 1.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/28 update: GSK traded lower with the market to close down -0.98%. The stock did close near its lows for the session and that doesn't bode well for tomorrow. It looks like we could see GSK hit the $45.00 level soon. I would use a bounce off $45.00 as a new entry point.

NOTE: I can't explain the odd pricing in GSK today. My quote feed says the high for the day is $45.74. Yet if you look at the intraday chart GSK clearly traded over $46.05 this morning (which would be a new multi-year high).

Our multi-week target is $49.25 (GSK doesn't move very fast).
FYI: The Point & Figure chart for GSK is bullish with a $56 target.

current Position: long GSK stock @ 45.75

- or -

Long Feb $46 call (GSK1218B46) entry $1.05

Entry on December 23 at $45.75
Earnings Date --/--/?? (unconfirmed)
Average Daily Volume = 2.5 million
Listed on December 22, 2011


Lam Research - LRCX - close: 36.60 change: -0.51

Stop Loss: 34.75
Target(s): 39.75
Current Gain/Loss: - 1.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/28 update: Hmm... the combination of yesterday's intraday reversal lower and today's decline is a bit ominous for LRCX. I am not suggesting new positions at this time. More conservative traders may want to raise their stops. The $36.00 level might be very short-term support but it's the $35.00 level that LRCX needs to hold.

(small positions)

current Position: Long LRCX stock @ $37.02

- or -

Long 2012Jan $38 call (LRCX1221A38) entry $0.60

12/23/11 trade opened.
12/22/11 trade not open yet. try again.

Entry on December 23 at $37.02
Earnings Date 01/25/12 (unconfirmed)
Average Daily Volume = 4.0 million
Listed on December 21, 2011


PetMed Express Inc. - PETS - close: 10.01 change: -0.24

Stop Loss: 9.90
Target(s): 11.90
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
12/28 update: PETS did not see any follow through on yesterday's bounce. Instead the stock slipped back to round-number support near $10.00. We are on the sidelines waiting for further strength.

The plan is to open small bullish positions at $10.45. The stock could see a short squeeze due to the high amount of short interest. The most recent data listed short interest is almost 29% of the very small 19.8 million-share float.

Earlier Comments:
PETS has potential technical resistance at the simple 150-dma at $10.35. I would keep our position size small to limit our risk. The simple and exponential 200-dma could be significant overhead resistance and PETS struggled with resistance near $11.50 in the past.

NOTE: I would prefer to trade the stock over the options but we're listing the options as an alternative.

Trigger @ 10.45 (small positions)

Suggested Position: buy PETS stock @ $10.45

- or -

buy the Feb $10 call (PETS1218B10)

Entry on December xx at $ xx.xx
Earnings Date 01/24/12 (unconfirmed)
Average Daily Volume = 231 thousand
Listed on December 27, 2011


Ross Stores Inc. - ROST - close: 48.48 change: -0.49

Stop Loss: 45.75
Target(s): 51.75
Current Gain/Loss: + 0.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/28 update: ROST could not escape the market-wide profit taking today. Shares lost -1.0%. I don't see any changes from my prior comments.

Our exit target is $51.75. Yet more conservative traders may want to exit early near $50.00, which could be round-number, psychological resistance. Plus the $50 level is currently near the top of ROST's rising channel. I am not suggesting new positions at this time.

current Position: long ROST stock @ 48.05

- or -

Long 2012Jan $50 call (ROST1221A50) entry $0.45

12/24/11 adjusted target to $51.75

Entry on December 21 at $48.05
Earnings Date 03/19/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on December 20, 2011


Trinity Industries - TRN - close: 29.63 change: -0.81

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

Comments:
12/28 update: Our trade on TRN is still not open. Shares opened lower this morning, aborting our entry point. Now, with today's close under $30 and its 200-dma, the stock look poised to drop toward the $28.50-28.00 zone.

We will adjust our entry point strategy to open bullish positions at $30.85 but if the stock continues to fall this week then we'll likely drop it as a candidate this weekend.

FYI: The Point & Figure chart for TRN is currently bearish but a breakout past $31.00 would produce a new triple-top breakout buy signal.

*Trigger @ 30.85

Suggested Position: buy TRN stock @ $30.85

- or -

buy the Jan $30 call (TRN1221A30)

12/28/11 adjusted entry point strategy to use a trigger at $30.85

Entry on December xx at $ xx.xx
Earnings Date 02/15/12 (unconfirmed)
Average Daily Volume = 633 thousand
Listed on December 24, 2011


BEARISH Play Updates

PACCAR Inc. - PCAR - close: 36.83 change: -1.14

Stop Loss: 38.25
Target(s): 32.50
Current Gain/Loss: + 5.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/28 update: PCAR's oversold bounce is fading. Shares underperformed with a -3.0% decline today. Readers can use this as a new bearish entry point.

NOTE: Our 2012Jan $36 puts are now $35.30 puts thanks to the recent dividend.

(Small Positions)

current Position: short PCAR stock @ $39.11

- or -

Long 2012Jan $35.30 PUT (PCAR1221M35.3) Entry $0.80

12/22/11 readers may want to exit early now
12/19/11 new stop loss @ 38.25
12/17/11 new stop loss @ 39.05
12/15/11 thanks to a 70-cent dividend our 2012Jan $36 puts are now 35.30 puts.

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


Vera Bradley, Inc. - VRA - close: 31.82 change: -0.27

Stop Loss: 32.55
Target(s): 27.50
Current Gain/Loss: + 4.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/28 update: I remain cautious on VRA. The stock pared its morning decline with a midday rebound to close down -0.8%. I am not suggesting new positions at this time. More conservative traders may want to exit now.

Earlier Comments:
Traders need to keep in mind this is an aggressive, higher-risk trade. We want to keep our position size very small to limit risk. The most recent data listed short interest at almost 80% of VRA's very small 19.7 million share float. If there is some sort of unexpected rally in this stock it could spark a short squeeze and stops may not work very well in a fast market environment. I would suggest using put options in a situation like this to limit your risk but the spreads on the January puts are too wide. Our target is $27.50 although readers may want to take profits near $30.00 since it could prove to be round-number support. FYI: The Point & Figure chart for VRA is bearish with a $26 target.

(very small positions only!)

current Position: short VRA stock @ $33.17

12/24/11 new stop loss @ 32.55
12/21/11 new stop loss @ 34.05, readers may want to exit early now to lock in a gain.
12/19/11 new stop loss @ 35.25
12/15/11 this is an aggressive, higher-risk trade.

Entry on December 16 at $33.17
Earnings Date 12/07/11
Average Daily Volume = 796 thousand
Listed on December 15, 2011