Editor's Note:
We were cautious going into Friday and had updated some stop losses on Thursday night. Friday's widespread market weakness was enough to hit stops on five of our trades. We also saw DFS hit our buy-the-dip entry point.

Current Portfolio:


BULLISH Play Updates

Autodesk, Inc. - ADSK - close: 37.53 change: -0.87

Stop Loss: 36.50
Target(s): 39.90
Current Gain/Loss: + 2.8%
Time Frame: exit prior to the Feb 23rd earnings announcement
New Positions: see below

Comments:
02/11 update: Ouch! ADSK underperformed the market on Friday. Shares gapped open lower at $37.76 and fell toward its simple 10-dma to spend the rest of the day drifting sideways. Shares lost -2.2% on the session. It wasn't that surprising to see some profit taking but I am concerned. If you look at the weekly chart the action last week looks like a potential top. Readers may want to exit early now or raise their stops.

It was our plan to exit our Feb. $37 calls at the open on Friday. The gap down really hurt. Our call position went from +52% to -0.5%. I am not suggesting new positions at this time.

current Position: Long ADSK stock @ 36.50

- or -

Feb $37 call (ADSK1218B37) Entry $1.08 exit $1.02 (- 0.5%)

02/10/12 closed Feb. $37 calls, bid @ $1.02 (-0.5%)
02/09/12 prepare to exit Feb. $37 calls, current bid $1.65 (+52.7%)
02/08/12 new stop loss @ 36.50
02/07/12 new stop loss @ 36.25
02/02/12 new stop loss @ 35.75
02/01/12 new stop loss @ 35.25
01/26/12 the action today looks like a potential top or bearish reversal. Be careful!

chart:

Entry on January 26 at $36.50
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 2.5 million
Listed on January 24, 2011


Discover Financial Services - DFS - close: 28.18 change: -0.71

Stop Loss: 27.25
Target(s): 31.50
Current Gain/Loss: + 0.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/11 update: Our buy the dip trigger in DFS has been hit at $28.15. Shares fell to their 10-dma on Friday and closed there. Readers may want to wait for signs of a bounce on Monday before initiating new positions. We have a stop loss at $27.25 but more conservative traders might want to raise their stop. Our multi-week target is $31.50.

Current Position: Long DFS stock @ $28.15

- or -

Long MAR $28 call (DFS1217C28) Entry $1.10

02/10/12 triggered at $28.15
02/08/12 new trigger @ 28.15, stop loss 27.25
02/07/12 still not open. Adjust strategy to buy a dip at $28.30, stop loss at $27.40
02/06/12 not open yet. try again.

chart:

Entry on February 10 at $28.15
Earnings Date 03/22/12 (unconfirmed)
Average Daily Volume = 6.2 million
Listed on February 04, 2011


Emulex Corp. - ELX - close: 10.76 change: -0.09

Stop Loss: 10.59
Target(s): 12.10
Current Gain/Loss: unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
02/11 update: ELX has spent almost a week consolidating sideways in the $10.80-11.10 zone. Now Friday's drop has left the stock under this trading range and under its 10-dma. If we do not see ELX recover on Monday we'll likely drop it as a bullish candidate.

Currently I am suggesting a trigger to open positions at $11.15 with a stop loss at $10.59. Our exit target is $12.10. We want to keep our position size small. The Point & Figure chart for ELX is bullish with a long-term $19.50 target.

Trigger @ $11.15 (small positions)

Suggested Position: buy ELX stock @ (trigger)

- or -

buy the Mar $11 call (ELX1217C11)

chart:

Entry on February xx at $ xx.xx
Earnings Date 04/25/12 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on February 07, 2011


Eaton Corp. - ETN - close: 51.44 change: -0.36

Stop Loss: 49.75
Target(s): 54.75
Current Gain/Loss: + 2.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/11 update: Our plan was to exit the Feb. $50 calls at the open on Friday. Unfortunately, ETN gapped open lower at $51.02. The bid on our Feb. $50 calls plunged from $1.95 to $1.10.

I am not suggesting new positions at this time.

current Position: Long ETN stock @ $50.25

- or -

FEB $50 call (ETN1218B50) Entry $1.00 exit $1.10 (+10%)

- or -

Long MAR $50 call (ETN1221C50) Entry $1.70

02/10/12 exited Feb $50 calls at the open. Bid @ $1.10 (+10%)
02/09/12 new stop loss @ 49.75
02/09/12 exit the Feb $50 calls at the open tomorrow, current bid is $1.95 (+95%).
02/06/12 new stop loss @ 48.40

chart:

Entry on February 03 at $50.25
Earnings Date 01/26/12
Average Daily Volume = 3.7 million
Listed on January 28, 2011


Flextronics Intl. Ltd. - FLEX - close: 6.97 change: -0.16

Stop Loss: 6.85
Target(s): 8.00
Current Gain/Loss: - 0.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/11 update: The upward momentum in FLEX has definitely stalled. Shares spent most of last week consolidating near the $7.00 area. I am not suggesting new positions at this time. Last week's low was $6.89 and we have a stop loss at $6.85. Don't forget that February options expire in five trading days.

Our multi-week target is $8.00. FYI: The Point & Figure chart for FLEX is bullish with a $9.00 target.

(small positions)

current Position: Long FLEX stock @ $7.03

- or -

Long Feb $7.00 call (FLEX1218B7) Entry $0.22

02/09/12 new stop loss @ 6.85
02/04/12 new stop loss @ 6.80
02/03/12 trade opened. FLEX opened at $7.03
02/02/12 not open yet. try again.

chart:

Entry on February 03 at $7.03
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 6.0 million
Listed on February 01, 2011


KB Home - KBH - close: 11.71 change: -0.27

Stop Loss: 10.75
Target(s): 13.50
Current Gain/Loss: + 5.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/11 update: KBH delivered big gains on Thursday so it wasn't a surprised to see a little profit taking on Friday. Shares are up significantly this year (+74%) and a lot of this move is probably short covering.

I am not suggesting new positions at this time. Nimble traders could buy a dip or a bounce near $11.00.

Earlier Comments:
A breakout higher could produced another short squeeze. The most recent data listed short interest at 41% of the 65 million-share float. Bear in mind that KBH can be a volatile stock. Readers may want to keep their position size small. Our exit target is $13.50. FYI: The Point & Figure chart for KBH is bullish with a long-term $20.00 target.

current Position: Long KBH stock @ $11.10

- or -

Long Mar $12 call (KBH1217C12) Entry $0.50

02/09/12 new stop loss @ 10.75

chart:

Entry on February 09 at $11.10
Earnings Date 04/05/12 (unconfirmed)
Average Daily Volume = 7.8 million
Listed on February 08, 2011


Marvell Technology - MRVL - close: 16.43 change: +0.00

Stop Loss: 15.75
Target(s): 19.00
Current Gain/Loss: - 2.1%
Time Frame: exit ahead of earnings on Feb. 23rd.
New Positions: see below

Comments:
02/11 update: Friday's action in MRVL is bearish. The stock gapped down and closed near its lows for the day. Shares are testing support near $16.00. If the market continues lower on Monday I would expect MRVL to hit our stop loss at $15.75. I'm not suggesting new positions at this time.

More conservative traders holding the February calls will want to seriously consider an early exit. February options expire in five trading days.

Earlier Comments:
Let's keep our position size small. Keep an eye on the $18.00 area as potential overhead resistance. FYI: The Point & Figure chart for MRVL is bullish with a $21.00 target.

(small positions)

current Position: Long MRVL stock @ 16.40

- or -

Long Feb $17 call (MRVL1218B17) Entry $0.25

- or -

Long May $17 call (MRVL1219E17) Entry $1.06

02/09/12 new stop loss @ 15.75
02/02/12 triggered at $16.40
01/28/12 adjusting our entry trigger to $16.40
01/27/12 MRVL issued an earnings warning

chart:

Entry on February 02 at $16.40
Earnings Date 03/23/12 (confirmed)
Average Daily Volume = 14.1 million
Listed on January 25, 2011


Smith & Wesson Holding Corp. - SWHC - close: 5.16 change: -0.10

Stop Loss: 4.90
Target(s): 5.60
Current Gain/Loss: + 6.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/11 update: Profit taking in SWHC continues but traders were buying the dip late Friday afternoon. The $5.00-4.90 zone should be support. I am not suggesting new positions at this time. More conservative traders may want to take profits now.

Earlier Comments:
I do consider this a very aggressive trade and we want to keep our position size small. FYI: The Point & Figure chart for SWHC is bullish with a long-term $10.25 target.

(Small Positions)

Suggested Position: long SWHC stock @ $4.83

02/08/12 big intraday dip and bounce, low was $4.93
02/04/12 new stop loss @ 4.90, adjust exit to $5.60
02/02/12 new stop loss @ 4.75
01/28/12 new stop loss @ 4.65
01/24/12 new stop loss @ 4.55

chart:

Entry on January 17 at $4.83
Earnings Date 03/12/12 (unconfirmed)
Average Daily Volume = 962 thousand
Listed on January 14, 2011


Zumiez Inc. - ZUMZ - close: 29.38 change: -0.48

Stop Loss: 28.45
Target(s): 32.25 or 34.50
Current Gain/Loss: + 2.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/11 update: ZUMZ gave up -1.6% on Friday but shares are still trading inside its short-term sideways consolidation. Plus the stock is still trading inside its larger, bullish channel. ZUMZ is actually sitting on the lower band and support side of this bullish channel near its simple 50-dma.

This is a pivotal spot for ZUMZ. A breakdown here would be bearish and could signal a drop toward the 200-dma. Meanwhile a bounce would be very bullish and could signal a run toward the upper band.

I am suggesting readers wait for ZUMZ to trade at $30.30 before considering new bullish positions. We are raising our stop loss tonight to $28.45.

Keep in mind that February options expire in five trading days.

Earlier Comments:
I am setting two different targets. Conservative traders can exit at $32.25. More aggressive traders can exit at $34.50.

current Position: Long ZUMZ stock @ 28.75

- or -

Long Feb. $30 call (ZUMZ1218B30) Entry $1.00

02/11/12 new stop loss @ 28.45
02/08/12 new stop loss @ 27.90
02/01/12 Trade opened with ZUMZ gapping higher at $28.75

chart:

Entry on February 01 at $28.75
Earnings Date 03/12/12 (unconfirmed)
Average Daily Volume = 627 thousand
Listed on January 31, 2011


BEARISH Play Updates

None. We do not have any active bearish trades.


CLOSED BULLISH PLAYS

Gulfport Energy - GPOR - close: 34.70 change: -1.21

Stop Loss: 34.75
Target(s): 37.00
Current Gain/Loss: + 1.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/11 update: On Thursday we decided to exit early and close our GPOR positions at Friday's closing bell. Unfortunately shares under performed the market with a -3.3% decline and hit our new stop loss at $34.75. Our potential gains fell from +5.8% to +1.7%.

closed Position: long GPOR stock @ 34.15, exit $34.75 (+1.7%)

- or -

FEB $35 call (GPOR1218B35) Entry $1.25, exit $0.75 (-40.0%)

02/10/12 stopped out at $34.75
02/09/12 prepare to exit positions at the close tomorrow
02/09/12 new stop loss @ 34.75
02/06/12 new stop loss @ 33.75
02/02/12 new stop loss @ 31.85
01/26/12 Trade finally opened. GPOR @ 34.15
01/25/12 trade did not open. try again.
01/24/12 trade did not open. try again.

chart:

Entry on January 26 at $34.15
Earnings Date 03/12/12 (unconfirmed)
Average Daily Volume = 522 thousand
Listed on January 23, 2011


J.P.Morgan Chase & Co - JPM - close: 37.86 change: -0.44

Stop Loss: 37.39
Target(s): 42.50
Current Gain/Loss: - 1.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/11 update: Thursday's bearish reversal pattern has now been confirmed with Friday's drop in JPM. Shares gapped open lower at $37.22. That was underneath our new stop loss at $37.39, closing our play immediately.

It certainly looks like JPM has formed a significant bottom with the lows in October and November last year. Yet shares might need to see a pull back toward the $36-35 area before moving much higher. I would keep JPM on your watch list.

Current Position: Long JPM stock @ $38.05, exit $37.22 (-1.7%)

- or -

Feb $38 call (JPM1218B38) Entry $1.00 exit $0.24 (-76.0%)

- or -

Mar $38 call (JPM1217C38) Entry $1.50 exit $0.91 (-39.3%)

02/10/12 stopped out on gap down at $37.22
02/09/12 new stop loss @ 37.39
02/09/12 prepare to exit Feb $38 calls at the close tomorrow
02/04/12 new stop loss @ 36.90
02/02/12 new stop loss @ 36.45
01/26/12 triggered at $38.05
01/24/12 still not open. adjust strategy to use a trigger @ 38.05
01/23/12 trade not open yet, S&P 500 opened negative. Try again.

chart:

Entry on January 26 at $38.05
Earnings Date 01/13/12
Average Daily Volume = 35.2 million
Listed on January 21, 2011


Morgan Stanley - MS - close: 19.66 change: -0.68

Stop Loss: 19.75
Target(s): 21.25
Current Gain/Loss: + 2.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/11 update: Ouch! MS plunged -3.3% on Friday. Shares hit our stop loss at $19.75. Our potential gains on the stock fell from +5.9% to +2.9%. It was our plan to exit the Feb. $20 calls at the opening bell. The gap down didn't help.

MS' close under $20.00 and its simple 10-dma is short-term bearish. I would expect a drop toward the 200-dma soon.

closed Position: Long MS stock @ $19.19, exit $19.75 (+2.9%)

- or -

FEB $20 call (MS1218B20) Entry $0.35 exit $0.44 (+25.7%)

- or -

APR $20 call (MS1221D20) Entry $1.16 exit $1.48 (+27.5%)

02/10/12 stopped out at $19.75
02/09/12 new stop loss @ 19.75, prepare to exit Feb. $20 calls tomorrow at the opening bell. Current bid is $0.67
02/08/12 new stop loss @ 19.25 . adjusted exit target to $21.25
02/06/12 readers may want to take profits on the Feb. 20 calls (+154%)
02/04/12 new stop loss @ 18.65
02/02/12 new stop loss @ 18.25
02/01/12 Trade opened on MS' gap open higher at $19.19, above our trigger of $19.05

chart:

Entry on February 01 at $19.19
Earnings Date 04/23/12 (unconfirmed)
Average Daily Volume = 25.5 million
Listed on January 28, 2011


Textainer Group Holdings - TGH - close: 30.98 change: -0.55

Stop Loss: 30.95
Target(s): 34.00
Current Gain/Loss: + 1.1%
Time Frame: exit prior to earnings on Feb. 14th
New Positions: see below

Comments:
02/11 update: We were planning to close our TGH positions at Friday's closing bell. However, the stock gapped open lower and broke down from its two-week trading range. TGH hit our stop loss at $30.95.

closed Position: Long TGH stock @ 30.60, exit $30.95 (+1.1%)

02/10/12 stopped out at $30.95
02/09/12 prepare to exit at the close tomorrow
02/07/12 new stop loss @ 30.95
02/04/12 new stop loss @ 30.80, exit prior to earnings (Feb 14th)
01/28/12 new stop loss @ 30.60
01/25/12 new stop loss @ 29.90
01/19/12 new stop loss @ 29.40
01/13/12 TGH hit our trigger at $30.60 and reversed in less than one second. I am suggesting caution here.

chart:

Entry on January 13 at $30.60
Earnings Date 02/14/12 (confirmed)
Average Daily Volume = 172 thousand
Listed on January 11, 2011


Metals & Mining ETF - XME - close: 53.25 change: -1.99

Stop Loss: 53.95
Target(s): 64.75
Current Gain/Loss: - 2.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/11 update: Friday was an ugly day for the metal and mining stocks. The XME underperformed with a -3.6% drop. Shares hit our stop loss at $53.95 pretty early on Friday morning.

Earlier Comments:
I do consider this an aggressive, higher-risk trade. We want to keep our position size small to limit our risk.

(small positions)

closed Position: Long XME @ $55.55 exit $53.95 (-2.8%)

- or -

MAR $60 call (XME1217C60) Entry $0.51 exit $0.20 (-60.7%)

02/10/12 stopped out at $53.95
02/09/12 trade opened this morning @ 55.55
02/08/12 not open yet. try again.
02/07/12 not open yet. try again.
02/06/12 not open yet. try again.

chart:

Entry on February 09 at $55.55
Earnings Date --/--/--
Average Daily Volume = 3.2 million
Listed on February 04, 2011