Editor's Note:
For the most part stocks delivered a widespread bounce on Monday. The majority of our trading candidates did participate in the rally. Tomorrow could be a real test with futures lower on Moody's downgrades for Europe tonight.

Don't forget that February options expire in four days.

Current Portfolio:


BULLISH Play Updates

Autodesk, Inc. - ADSK - close: 38.37 change: +0.84

Stop Loss: 36.50
Target(s): 39.90
Current Gain/Loss: + 5.1%
Time Frame: exit prior to the Feb 23rd earnings announcement
New Positions: see below

Comments:
02/13 update: ADSK quickly rallied back toward last week's highs and stalled. Shares did outperform the major indices with a +2.2% bounce today. Readers may want to exit early now or raise their stops.

I am not suggesting new positions at this time.

current Position: Long ADSK stock @ 36.50

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!

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: 28.68 change: +0.50

Stop Loss: 27.25
Target(s): 31.50
Current Gain/Loss: + 1.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/13 update: So far so good with our buy-the-dip strategy on DFS. The stock spiked higher this morning and closed up +1.7% on the session. The $29.00 level still looms as short-term overhead resistance.

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.

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: 10.82 change: +0.06

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

Comments:
02/13 update: The action in ELX was somewhat anemic. Early morning gains faded and shares drifted sideways on low volume. I don't see any changes from my weekend comments. The stock's +0.5% gain lagged behind the S&P 500's +0.6% gain. We'll give ELX one more day to show some strength or we'll 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)

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: 52.05 change: +0.61

Stop Loss: 49.75
Target(s): 54.75
Current Gain/Loss: + 3.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/13 update: Traders bought the dip in ETN this morning and the stock rallied to new six-month highs. I am not suggesting new positions at this time.

current Position: Long ETN stock @ $50.25

- 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

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: 6.98 change: +0.02

Stop Loss: 6.85
Target(s): 8.00
Current Gain/Loss: - 0.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/13 update: FLEX did not participate in the market's rally today. I am suggesting we exit positions first thing tomorrow morning.

(small positions)

current Position: Long FLEX stock @ $7.03

- or -

Long Feb $7.00 call (FLEX1218B7) Entry $0.22

02/13/12 prepare to exit at the open tomorrow morning
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.

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


Jos. A. Bank Clothiers - JOSB - close: 51.26 change: +0.96

Stop Loss: 48.75
Target(s): 55.00
Current Gain/Loss: + 1.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/13 update: JOSB continues to show relative strength. The stock opened at $50.54 and surged to a +1.9% gain. Our trigger to open bullish positions was hit at $50.75.

Further gains could spark a short squeeze. The most recent data listed short interest at 19.8% of the 27.5 million-share float.

current Position: long JOSB stock @ $50.75

- or -

Long Mar $50 call (JOSB1217C50) Entry $1.90

Entry on February 13 at $50.75
Earnings Date 03/29/12 (unconfirmed)
Average Daily Volume = 301 thousand
Listed on February 11, 2011


KB Home - KBH - close: 12.39 change: +0.68

Stop Loss: 10.75
Target(s): 13.50
Current Gain/Loss: +11.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/13 update: Positive analyst comments and a $16 price target fueled a +5.8% rally in KBH today. Readers may want to start taking profits now. I am not suggesting new positions at this time.

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

02/13/12 readers may want to start taking profits now (+11.6%). The call option is +122%
02/09/12 new stop loss @ 10.75

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


Smith & Wesson Holding Corp. - SWHC - close: 5.26 change: +0.10

Stop Loss: 4.90
Target(s): 5.60
Current Gain/Loss: + 8.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/13 update: SWHC erased Friday's 10-cent drop with a similar sized bounce. Shares had been up twice that amount late this afternoon. 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

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


Yahoo! Inc. - YHOO - close: 16.12 change: -0.02

Stop Loss: 15.35
Target(s): 18.75
Current Gain/Loss: unopened
Time Frame: 6 to 12 weeks
New Positions: Yes, see below

Comments:
02/13 update: YHOO failed to participate in the market's widespread rebound today. Shares were content to drift sideways in a narrow range. I don't see any changes from my weekend comments.

I am suggesting we open small bullish positions if YHOO trades at $16.35. We do not want to open positions if YHOO were to gap open above $16.50. If triggered at $16.35 we'll use a stop under at $15.35 since the $15.40 level has been support the last few weeks. Our multi-week (possibly multi-month) target is $18.75.

Trigger @ $16.35

Suggested Position: buy YHOO stock @ trigger

- or -

buy the Apr $17 call (YHOO1221D17)

Entry on February xx at $ xx.xx
Earnings Date 04/19/12 (unconfirmed)
Average Daily Volume = 17.2 million
Listed on February 11, 2011


Zumiez Inc. - ZUMZ - close: 30.03 change: +0.65

Stop Loss: 28.45
Target(s): 32.25 or 34.50
Current Gain/Loss: + 4.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/13 update: Good news! ZUMZ is starting to bounce off support. I've been suggesting readers wait for a rise past $30.30 as our next entry point but if both ZUMZ and the S&P 500 open positive tomorrow I would consider it a bullish entry.

Keep in mind that February options expire in four 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

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

Marvell Technology - MRVL - close: 15.94 change: -0.11

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:
02/13 update: MRVL ended the session down -0.6% but intraday the stock was down -2.4%. The reason for today's relative weakness appears to be an analyst downgrade. Our stop loss was hit at $15.75.

Earlier Comments:
Let's keep our position size small.

(small positions)

closed Position: Long MRVL stock @ 16.40, exit $15.75 (-3.9%)

- or -

Feb $17 call (MRVL1218B17) Entry $0.25 exit $0.02 (-92.0%)

- or -

May $17 call (MRVL1219E17) Entry $1.06 exit $0.30 (-71.6%)

02/13/12 stopped out at $15.75 thanks to an analyst downgrade
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