Editor's Note:
Crude oil prices rallied on news that Iran was cutting exports to certain Western nations. The USO broke through resistance near $40.00 and hit our entry point.

Meanwhile our ETN trade has been closed.

Current Portfolio:


BULLISH Play Updates

Archer-Daniels-Midland Co - ADM - close: 31.37 change: +0.02

Stop Loss: 29.75
Target(s): 34.00
Current Gain/Loss: + 0.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/21 update: ADM continues to consolidate sideways under resistance near the $31.50 level. Readers may want to wait for a move past $31.60 before considering new positions.

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


Acme Packet, Inc. - APKT - close: 34.25 change: -1.20

Stop Loss: 33.65
Target(s): 39.75
Current Gain/Loss: - 4.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/21 update: APKT underperformed on Tuesday with a -3.3% decline. The breakdown back under $35.00 and under its 10-dma and 100-dma is definitely short-term bearish. More conservative traders may want to move their stops closer to the $34.00 level. I am not suggesting new positions at this time.

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: 29.69 change: +0.15

Stop Loss: 27.95
Target(s): 31.50
Current Gain/Loss: + 5.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/21 update: DFS churned sideways most of the session before a final hour drift higher pushed it to a +0.5% gain. I don't see any changes from my prior comments. DFS could easily dip toward what should be support near $29.00 or its 10-dma. I am not suggesting new positions at this time.

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: 17.94 change: -0.34

Stop Loss: 17.45
Target(s): 21.50
Current Gain/Loss: - 3.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/21 update: DRIV hit some profit taking today (-1.8%) with a drop toward the bottom of its recent trading range. If the market continues to sink tomorrow we could see DRIV hit our stop loss at $17.45.

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.

(small positions)

current Position: Long DRIV stock @ $18.50

- or -

Long Mar $18 call (DRIV1217c18) Entry $1.00

Entry on February 17 at $18.50
Earnings Date 04/30/12 (unconfirmed)
Average Daily Volume = 727 thousand
Listed on February 13, 2011


Energy XXI Ltd. - EXXI - close: 38.52 change: +0.36

Stop Loss: 36.45
Target(s): 42.50
Current Gain/Loss: + 0.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/21 update: Oil and energy stocks were mostly higher on Tuesday thanks to a gain for oil prices. EXXI managed a +0.9% gain but this was off its best levels of the session.

Earlier Comments:
The plan was to keep our position size small to limit our risk. Our multi-week target is $42.50. FYI: The Point & Figure chart for EXXI is bullish with a long-term $62 target.

(small positions)

current Position: Long EXXI stock @ $38.43

- or -

Long Mar $40 call (EXXI1217C40) Entry $1.00

Entry on February 17 at $38.43
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on February 16, 2011


First Cash Financial - FCFS - close: 43.25 change: -0.36

Stop Loss: 41.85
Target(s): 49.00
Current Gain/Loss: - 1.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/21 update: The early morning rally attempt in FCFS faded and shares dropped to a -0.8% decline. I cautioned readers over the weekend to look for a dip near $43.00 and we got it!

Earlier Comments:
Our multi-week target is $49.00. FYI: Further gains could spark some short covering. The most recent data listed short interest at 6.4% of the small 27 million-share float. The Point & Figure chart for FCFS is bullish with a long-term $65.00 target.

current Position: Long FCFS stock @ $44.00

- or -

Long Mar $45 call (FCFS1217C45) Entry $1.05

Entry on February 17 at $44.00
Earnings Date 04/18/12 (unconfirmed)
Average Daily Volume = 351 thousand
Listed on February 16, 2011


Jos. A. Bank Clothiers - JOSB - close: 51.32 change: -1.56

Stop Loss: 49.75
Target(s): 54.00
Current Gain/Loss: + 1.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/21 update: Fat Tuesday proved to be a bearish session for JOSB. After four weeks of gains the stock hit some profit taking with a -2.9% decline. JOSB should find some support near its 10-dma and the $50.00 level. I am not suggesting new positions at this time.

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

02/18/12 adjusted exit target to $54.00.
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: 11.75 change: -0.41

Stop Loss: 10.90
Target(s): 13.50
Current Gain/Loss: + 5.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/21 update: Last week I warned readers that KBH looked poised for some profit taking. Shares underperformed today with a -3.3% decline. More conservative traders may want to exit now. I am raising our stop loss to $10.90.

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

02/21/12 new stop loss @ 10.90
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: 5.43 change: +0.18

Stop Loss: 5.15
Target(s): 5.60
Current Gain/Loss: +12.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/21 update: SWHC displayed relative strength with a +3.4% gain and a breakout from its two-week consolidation. The intraday high was $5.53. Our exit target to close this trade is still at $5.60. More aggressive traders may want to aim higher. I am raising our stop loss to $5.15.

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

02/21/12 new stop loss @ 5.15
02/18/12 new stop loss @ 4.95
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


United States Oil Fund (ETF) - USO - close: 40.58 change: +0.83

Stop Loss: 38.75
Target(s): 43.00
Current Gain/Loss: + 0.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/21 update: Our new trade on the USO is open. News that Iran has taken the drastic step to cut oil exports to certain Western nations helped fuel a rally in oil prices. The USO gapped open higher at $40.13 and hit our trigger to open positions at $40.25. Remember, the plan was to keep our position size small to limit our risk. Our multi-week target is $43.50.

Earlier Comments:
We do not want to use the USO for long-term positions. This ETF is constantly rolling over its futures positions over time, which can have a negative impact on the share price. FYI: The Point & Figure chart for USO is bullish with a long-term $58.00 target.

(small positions!)

current Position: Long the ETF @ $40.25

- or -

Long April $40 call (USO1221D40) Entry $2.10

Entry on February 21 at $40.25
Earnings Date --/--/--
Average Daily Volume = 8.8 million
Listed on February 18, 2011


Wells Fargo & Co. - WFC - close: 30.96 change: -0.13

Stop Loss: 29.75
Target(s): 34.00
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
02/21 update: WFC did its part and opened higher but the S&P 500 index opened lower. WFC rallied to $31.47 intraday only to reverse into a loss. That looks like a potential bull-trap pattern. I am adjusting our entry point to buy a dip at $30.25 with a stop loss at $29.75. More conservative traders could wait for a rally past $31.50 instead.

New Trigger: buy a dip at $30.25

Suggested Position: buy WFC stock @ (trigger)

- or -

buy the April $32 call (WFC1221D32)

02/21/12 based on WFC's intraday reversal lower we are adjusting our entry point strategy to "buy a dip" at $30.25 with a stop loss at $29.75
02/21/12 trade did not open because S&P 500 opened lower.

Entry on February xx at $ xx.xx
Earnings Date 04/19/12 (unconfirmed)
Average Daily Volume = 30.5 million
Listed on February 18, 2011


Zumiez Inc. - ZUMZ - close: 30.75 change: -0.29

Stop Loss: 28.90
Target(s): 32.25 or 34.50
Current Gain/Loss: + 6.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/21 update: After strong gains last week ZUMZ hit some profit taking today (-0.9%). Look for support near $30.00 and its 50-dma.

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.


CLOSED BULLISH PLAYS

Eaton Corp. - ETN - close: 51.94 change: +1.12

Stop Loss: 49.75
Target(s): 54.75
Current Gain/Loss: + 2.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/21 update: ETN was not looking very strong last week so we decided to exit positions at the opening bell today. Unfortunately for us the stock outperformed with a +2.2% gain and a close near last week's high.

closed Position: Long ETN stock @ $50.25 exit $51.51 (+2.5%)

- or -

MAR $50 call (ETN1221C50) Entry $1.70 exit $2.30 (+35.2%)

02/21/12 planned exit at the open
02/18/12 prepare to exit at the opening bell
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