Editor's Note:
The stock market delivered its best performance in days with the S&P 500 closing at new relative highs. Most of our candidates followed the index higher. Readers may want to start taking profits in ADSK, KBH, SWHC, and ZUMZ.

Current Portfolio:


BULLISH Play Updates

Archer-Daniels-Midland Co - ADM - close: 31.23 change: +0.19

Stop Loss: 29.75
Target(s): 34.00
Current Gain/Loss: + 0.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/16 update: It was a quiet day for ADM. Shares failed to rally past yesterday's high but still managed a +0.6% gain. My worries from yesterday remain. Wednesday's action might be a short-term top.

I am not suggesting new positions at this time. We can look for short-term support near $30.50 and reconsider new positions there.

Earlier Comments:
More conservative traders might want to consider waiting to buy a dip near ADM's rising 10-dma. FYI: The Point & Figure chart for ADM is bullish with a $40.00 target.

current Position: Long ADM stock @ $31.21

- or -

Long Mar $32 call (ADM1217C32) Entry $0.47

Entry on February 15 at $31.21
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 5.6 million
Listed on February 14, 2011


Autodesk, Inc. - ADSK - close: 39.53 change: +0.88

Stop Loss: 37.45
Target(s): 39.90
Current Gain/Loss: + 8.3%
Time Frame: exit prior to the Feb 23rd earnings announcement
New Positions: see below

Comments:
02/16 update: The rally in ADSK continues and shares outperformed the market with a +2.2% gain. ADSK also closed at new multi-month highs. Our exit target is $39.90 but we will adjust our exit strategy and close positions tomorrow (Friday) at the closing bell even if shares do not hit our exit target. I am raising our stop loss to $37.45.

current Position: Long ADSK stock @ 36.50

02/16/12 prepare to exit tomorrow at the closing bell
02/16/12 new stop loss @ 37.45
02/15/12 new stop loss @ 36.95
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


Acme Packet, Inc. - APKT - close: 35.99 change: +0.42

Stop Loss: 33.65
Target(s): 39.75
Current Gain/Loss: - 0.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/16 update: Our new trade on APKT is now open. Shares traded over the $36.00 level a couple of times today and hit our trigger at $36.05. I would still consider new positions now if both APKT and the S&P 500 index open positive tomorrow morning. More conservative traders may want to choose to wait for a dip near $35.00 or its 10-dma as an alternative entry point.

The $40.00 level has been resistance in the past so we'll set our exit target at $39.75. FYI: The Point & Figure chart for APKT is bullish with a long-term $54.00 target.

(small positions)

current Position: Long APKT stock @ $36.05

- or -

Long Mar $35 call (APKT1217C35) Entry $2.70

Entry on February 16 at $36.05
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 4.1 million
Listed on February 15, 2011


Discover Financial Services - DFS - close: 29.58 change: +0.57

Stop Loss: 27.95
Target(s): 31.50
Current Gain/Loss: + 5.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/16 update: DFS continues to outperform. The stock added another +1.9% today. I would not be surprised to see the $30.00 level act as round-number resistance. More conservative traders may want to take profits in the $29.85-30.00 zone to lock in gains. I am not suggesting new positions at this time. We will inch up our stop loss to $27.95.

Current Position: Long DFS stock @ $28.15

- or -

Long MAR $28 call (DFS1217C28) Entry $1.10

02/16/12 new stop loss @ 27.95
02/15/12 new stop loss @ 27.75
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


Digital River - DRIV - close: 18.33 change: +0.42

Stop Loss: 17.45
Target(s): 21.50
Current Gain/Loss: unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
02/16 update: DRIV managed to outperform the market with a +2.3% gain but shares have not yet broken out from its trading range.

I am suggesting bullish positions if DRIV can trade at $18.50 or higher.

Earlier Comments:
DRIV can definitely see some volatility so we want to keep our position size small to limit our risk. There potential price resistance at $20.00. There is potential technical resistance at the 150-dma and exponential 200-dma.

Trigger @ $18.50 (small positions)

Suggested Position: buy DRIV stock @ (trigger)

- or -

buy the Mar $18 call (DRIV1217c18)

Entry on February xx at $ xx.xx
Earnings Date 04/30/12 (unconfirmed)
Average Daily Volume = 727 thousand
Listed on February 13, 2011


Eaton Corp. - ETN - close: 51.01 change: +0.14

Stop Loss: 49.75
Target(s): 54.75
Current Gain/Loss: + 1.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/16 update: ETN underperformed the market on Thursday. I am concerned that ETN was moving lower as the market is breaking out to new highs. ETN did bounce near its 20-dma but if shares don't show more strength tomorrow we might drop it from the newsletter. 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


Jos. A. Bank Clothiers - JOSB - close: 52.41 change: +0.74

Stop Loss: 49.75
Target(s): 55.00
Current Gain/Loss: + 3.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/16 update: JOSB quickly recovered after yesterday's decline. The stock surged to a +1.4% gain and a new ten-week closing high. I am not suggesting new positions at this time. More conservative traders may want to start raising their stop loss.

Earlier Comments:
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

02/14/12 new stop loss @ 49.75

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: 12.27 change: -0.12

Stop Loss: 10.75
Target(s): 13.50
Current Gain/Loss: +10.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/16 update: Stronger than expected housing starts data this morning did little to fuel any gains in KBH. I am still concerned that yesterday's performance could be a short-term top in the stock.

Readers will want to seriously consider an early exit right now to lock in gains. I would not be surprised to see a dip back toward the simple 10-dma near $11.60. 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: 5.25 change: +0.02

Stop Loss: 4.90
Target(s): 5.60
Current Gain/Loss: + 8.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/16 update: SWHC continues to churn sideways. The stock has been struggling with resistance near $5.30 the last few days.

There is no change from my prior comments. More conservative traders may want to raise their stop loss or take profits now. I am not suggesting new positions at this time.

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


Zumiez Inc. - ZUMZ - close: 31.61 change: +1.23

Stop Loss: 28.90
Target(s): 32.25 or 34.50
Current Gain/Loss: + 9.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/16 update: ZUMZ displayed relative strength today as traders bought the dip near support. Shares rallied +4.0% to close at new four-week highs. Don't forget that we have two different targets depending on your risk tolerance. I am raising our stop loss to $28.90.

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

02/16/12 new stop loss @ 28.90
02/15/12 exited Feb. $30 calls. bid @ $0.55 (-45%)
02/14/12 prepare to exit Feb. $30 calls at the close tomorrow
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.