Editor's Note:
The U.S. market managed to claw its way back from the Wednesday morning drop but any gains were very mild. The S&P 500 index closed up +0.01% (nearly unchanged) while the small cap Russell 2000 index declined -0.66%.

-James

Current Portfolio:


BULLISH Play Updates

Ball Corp. - BLL - close: 36.25 change: -0.07

Stop Loss: 39.00
Target(s): 34.95
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
01/04 update: It was a quiet day for BLL. The stock bounced around the $36.00-36.50 zone but couldn't breakout past $36.50. I don't see any changes from my prior comments.

Earlier Comments:
I am suggesting a trigger to open small bullish positions at $36.55 with a stop loss at $34.95. Our target is $39.00. More conservative traders may want to take profits early near $38.00 instead.
FYI: The Point & Figure chart for BLL is currently bearish but a rally past $37.00 would produce a brand new buy signal.

Trigger @ 36.55

Suggested Position: buy BLL stock @ 36.55

- or -

buy the Feb $35 call (BLL1221A35)

Entry on January xx at $ xx.xx
Earnings Date 01/26/12 (unconfirmed)
Average Daily Volume = 985 thousand
Listed on January 03, 2011


GlaxoSmithKline - GSK - close: 46.35 change: +0.07

Stop Loss: 44.90
Target(s): 49.25
Current Gain/Loss: + 1.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/04 update: GSK bounced off the $46.00 level this morning and spent the rest of the day drifting sideways. I am adjusting our stop loss to $44.90.

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

01/04/12 new stop loss @ 44.90

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: 36.65 change: -0.10

Stop Loss: 35.75
Target(s): 39.75
Current Gain/Loss: - 1.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/04 update: Yesterday's sell-off continued this morning but LRCX found support at $36.15. I remain cautious here. We are not suggesting new positions at this time.

(small positions)

current Position: Long LRCX stock @ $37.02

- or -

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

01/03/12 new stop loss @ 35.75
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: 10.17 change: -0.29

Stop Loss: 9.90
Target(s): 11.90
Current Gain/Loss: - 3.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/04 update: Warning! PETS underperformed the market today with a -2.7% decline. The combination of PETS's intraday reversal yesterday and today's follow through decline is not healthy. Readers may want to abandon ship right now with an early exit. I still see support at $10.00 so we're holding on. I am not suggesting new positions at this time.

Earlier Comments:
A breakout could spark a short squeeze. 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.

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.

(small positions)

current Position: Long PETS stock @ $10.59

- or -

Long Feb $10 call (PETS1218B10) entry $0.74

01/04/12 readers may want to exit early. PETS is not cooperating and the action looks bearish.
01/03/12 PETS gapped higher at $10.59, which is above our trigger at $10.45.

Entry on January 03 at $10.59
Earnings Date 01/24/12 (unconfirmed)
Average Daily Volume = 231 thousand
Listed on December 27, 2011


Starbucks Corp. - SBUX - close: 46.17 change: +0.89

Stop Loss: 43.75
Target(s): 49.75
Current Gain/Loss: + 0.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/04 update: The bounce in SBUX is good news. There was no follow through on yesterday's bearish reversal pattern. Plus, today's rebound (+1.9%) is a show of relative strength. I am not suggesting new positions at current levels.

Earlier Comments:
Broken resistance near $45.00 should be new support. The same can be said for the $44 level. Our multi-week target is $49.75. FYI: The Point & Figure chart for SBUX is bullish with a long-term $75 target.

current Position: long SBUX stock @ $46.08

- or -

Long FEB $47 call (SBUX1218B47) entry $1.56

Entry on December 29 at $46.08
Earnings Date 01/25/12 (unconfirmed)
Average Daily Volume = 5.1 million
Listed on December 28, 2011


Trinity Industries - TRN - close: 30.05 change: -0.42

Stop Loss: 28.75
Target(s): 34.75
Current Gain/Loss: - 3.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/04 update: TRN underperformed the market today with a -1.3% decline. The combination of today's weakness and yesterday's intraday pull back from its highs is not very encouraging. Shares are currently trading near prior resistance and what should be support in the $30 area with its 200-dma. Volume was strong today, which is another troubling sign. I am not suggesting new positions at this time.

current Position: Long TRN stock @ $31.08

- or -

Long Jan $30 call (TRN1221A30) entry $2.14

01/03/12 TRN gapped open higher at $31.08, which is above our trigger at $30.85
12/28/11 adjusted entry point strategy to use a trigger at $30.85

Entry on January 03 at $31.08
Earnings Date 02/15/12 (unconfirmed)
Average Daily Volume = 633 thousand
Listed on December 24, 2011


BEARISH Play Updates

EZchip Semiconductor - EZCH - close: 28.99 change: -0.41

Stop Loss: 30.10
Target(s): 25.50
Current Gain/Loss: - 2.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/04 update: There was no follow through on yesterday's bounce, which is good news for the bears. EZCH underperformed the market with a -1.39% decline. Readers may want to wait for a new relative low under $28.25 before initiating new positions.

Earlier Comments:
We want to keep our position size small to limit our risk. The $26.60 level has been support in the past but we're aiming for $25.50. More aggressive trades may want to aim for $23 over the next several weeks. FYI: The Point & Figure chart for EZCH is bearish with a $24 target.

Suggested Position: short EZCH @ 28.38

- or -

Long Jan $28 PUT (EZCH1221M28) entry $0.95

Entry on December 29 at $28.38
Earnings Date 02/08/12 (unconfirmed)
Average Daily Volume = 280 thousand
Listed on December 28, 2011


Kohl's Corp. - KSS - close: 47.36 change: -0.67

Stop Loss: 50.10
Target(s): 45.50
Current Gain/Loss: + 4.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/04 update: KSS continues to move lower. Shares broke through short-term support at $48.00 today and underperformed the market with a -1.3% decline. Volume was above average on today's decline, which is good news for the bears.

Tomorrow could be a volatile session for retailers. Several major retail chains will release their December same-store sales numbers. I am lowering our stop loss on KSS down to $50.10.

If you own the put options you may want to take profits immediately. Our put (bid) is up to $3.10 (+93.7%).

current Position: short KSS stock @ 49.60

- or -

Long 2012Jan $50 PUT (KSS1221M50) entry $1.60

01/04/12 new stop loss @ 50.10

Entry on December 30 at $49.60
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 4.4 million
Listed on December 29, 2011


Netgear Inc. - NTGR - close: 34.69 change: -0.82

Stop Loss: 34.60
Target(s): 30.25
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
01/04 update: There was no follow through on yesterday's bullish rebound in NTGR. That's good news for the bears yet I would not open positions now. Stick to the plan and wait for a new relative low. Currently we have at trigger to open bearish positions at $33.20.

Trigger @ 33.20

Suggested Position: short NTGR stock @ 33.20

- or -

buy the Jan $32 PUT (NTGR1221M32)

Entry on December xx at $ xx.xx
Earnings Date 02/09/12 (unconfirmed)
Average Daily Volume = 317 thousand
Listed on December 31, 2011