Editor's Note:
Same-store sales were disappointing for several major retailers. Our bearish play on KSS was a winner.

Elsewhere our TRN play was stopped out. The TGT trade has been opened.

-James

Current Portfolio:


BULLISH Play Updates

Ball Corp. - BLL - close: 36.27 change: +0.02

Stop Loss: 39.00
Target(s): 35.35
Current Gain/Loss: unopened
Time Frame: up to the earnings report (01/26)
New Positions: Yes, see below

Comments:
01/05 update: Please note that the time frame on our trade has been significantly adjusted. BLL is due to report earnings on January 26th. We do not want to hold over the announcement. That only provides about three weeks for BLL to move. Shares have been consolidating sideways this week.

We will leave our strategy unchanged but we want to keep our position size small. I am raising our stop loss to $35.35.

Earlier Comments:
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, stop loss @ 35.35

Suggested Position: buy BLL stock @ 36.55

- or -

buy the Feb $35 call (BLL1221A35)

01/05/12 adjusted stop loss to $35.35, plan to exit prior to earnings

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


GlaxoSmithKline - GSK - close: 46.13 change: -0.22

Stop Loss: 44.90
Target(s): 49.25
Current Gain/Loss: + 0.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/05 update: GSK hit some profit taking this morning. That's not surprising given the market-wide drop this morning. The good news is that investors were buying the dip at short-term support near its rising 10-dma. Readers could use this intraday bounce as an entry point and I would be tempted to raise the stop loss toward $45.50ish.

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: 37.37 change: +0.72

Stop Loss: 35.75
Target(s): 39.75
Current Gain/Loss: + 0.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/05 update: Shares of LRCX were upgraded this morning, which helped propel it to a +1.9% gain. I remain cautious on the stock. 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: 10.34 change: +0.17

Stop Loss: 9.90
Target(s): 11.90
Current Gain/Loss: - 2.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/05 update: PETS saw a nice bounce today after yesterday's sell-off. The stock rallied from its low of $10.08 to $10.51 before paring its gains. Shares still managed to outperform the major indices with a +1.6% advance today. While the intermediate trend is higher I remain cautious given the prior two-day reversal. 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: 46.36 change: +0.19

Stop Loss: 43.75
Target(s): 49.75
Current Gain/Loss: + 0.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/05 update: The stock market was weak this morning but traders bought the dip in SBUX near its 10-dma again. Shares ended the session up +0.4%. Readers might want to adjust their stop loss closer to $44.50 or even the $45.00 level. I am not suggesting new positions at current levels.

NOTE: SBUX is tentatively scheduled to report earnings in late January. Normally we prefer to exit prior to any earnings announcement.

Earlier Comments:
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


BEARISH Play Updates

EZchip Semiconductor - EZCH - close: 29.68 change: +0.69

Stop Loss: 30.10
Target(s): 25.50
Current Gain/Loss: - 4.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/05 update: Shares of EZCH are not cooperating. The stock outperformed today with a +2.3% gain. Shares are testing resistance near $30.00. Any follow through higher could hit our stop loss at $30.10. I am not suggesting new positions at this time.

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


Netgear Inc. - NTGR - close: 35.14 change: +0.45

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

Comments:
01/05 update: NTGR is still consolidating sideways although today's gain did outperform the major indices. 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


Target Corp. - TGT - close: 48.51 change: -1.49

Stop Loss: 50.50
Target(s): 46.05
Current Gain/Loss: - 1.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/05 update: TGT reported December same store sales growth of just +1.6% versus estimates for +3.3%. If that wasn't bad enough management issued an earnings warning. The stock gapped open lower at $48.00 and hit $47.25 before bouncing. Shares closed down -2.9% on the session. Unfortunately the gap down really hurts our entry point. Instead of launching positions at $49.45 as planned our entry is now $48.00. I am not suggesting new positions at this time. More conservative traders may want to exit early now to limit losses. We can expect TGT to try and fill the gap and that means a bounce back toward the $49.50 area. We will adjust our stop loss down to $50.50.

(small positions)

current Position: short TGT stock @ 48.00

- or -

Long Feb $50 PUT (TGT1218B50) entry $2.65

01/05/12 new stop loss @ 50.50
01/05/12 Our trade was opened on the gap down at $48.00 instead of our trigger at $49.45 thanks to TGT's missed same-store sales numbers and an earnings warning.

Entry on January 05 at $48.00
Earnings Date 02/22/12 (unconfirmed)
Average Daily Volume = 4.6 million
Listed on January 04, 2011


CLOSED BULLISH PLAYS

Trinity Industries - TRN - close: 30.08 change: +0.03

Stop Loss: 28.75
Target(s): 34.75
Current Gain/Loss: - 7.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/05 update: I could not find any news to account for the relative weakness in TRN this morning. As a matter of fact prior to the opening bell there was positive analyst comments on this stock. Yet TRN underperformed this morning with a spike down to $28.40 (below the 50-dma) before bouncing back to close just above the breakeven line. Our stop loss was hit at $28.75.

This was almost a worst case scenario with the trade opened on a gap higher and then stopped out on an intraday spike lower.

closed Position: Long TRN stock @ $31.08, exit 28.75 (- 7.5%)

- or -

Jan $30 call (TRN1221A30) entry $2.14 exit 0.65*(-69.6%)

*option exit price is an estimate. option didn't trade when we were stopped out.
01/05/12 stopped out at $28.75
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

chart:

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


CLOSED BEARISH PLAYS

Kohl's Corp. - KSS - close: 46.52 change: -0.84

Stop Loss: 50.10
Target(s): 45.50
Current Gain/Loss: + 8.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/05 update: Target exceeded.

It doesn't happen very often but sometimes a stock will gap open past our exit target. The market's reaction to KSS' earnings warning this morning pushed the stock to gap open lower at $45.26. Our exit target was $45.50.

closed Position: short KSS stock @ 49.60, exit 45.26 (+8.7%)

- or -

2012Jan $50 PUT (KSS1221M50) entry $1.60 exit 4.30 (+168.7%)

01/05/12 target exceeded. KSS gapped open under our exit target.
01/04/12 new stop loss @ 50.10

chart:

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