Editor's Note:
The stock market seems to lack leadership and the major indices were drifting lower on Wednesday. Financials were underperforming while energy and gold-related stocks were showing some strength.

Current Portfolio:


BULLISH Play Updates

Archer-Daniels-Midland Co - ADM - close: 31.55 change: +0.18

Stop Loss: 29.75
Target(s): 34.00
Current Gain/Loss: + 1.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/22 update: ADM continues to show relative strength. Shares managed to inch up above recent resistance near $31.50. Yesterday I suggested readers waiting for a rally pat $31.60 as a new entry point. The stock hit $31.63 today and looks poised to move higher.

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


Discover Financial Services - DFS - close: 29.72 change: +0.03

Stop Loss: 27.95
Target(s): 31.50
Current Gain/Loss: + 5.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/22 update: DFS is holding up reasonably well as it consolidates sideways under new short-term resistance near $30.00. I am not suggesting new positions at this time. The $29.00 level should be short-term support.

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: 17.90 change: -0.04

Stop Loss: 17.45
Target(s): 21.50
Current Gain/Loss: - 3.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/22 update: DRIV spiked down early this morning but managed a bounce at $17.61. Shares are right in the middle of its prior trading range and momentum indicators are starting to look bearish. More conservative traders may want to abandon ship. I am not suggesting new positions at this time.

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: 38.67 change: +0.15

Stop Loss: 36.45
Target(s): 42.50
Current Gain/Loss: + 0.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/22 update: Some of the energy stocks were showing strength today and EXXI managed a +0.3% gain. The stock is trading just under what looks like new short-term resistance near $39.00. Readers may want to wait for a breakout past $39.00 before considering new positions.

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:
02/22 update: FCFS continues to pull back and tested support near $42.50, which was support early last week. A bounce from current levels could be used as a new bullish entry point.

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


Graco Inc. - GGG - close: 50.03 change: -0.16

Stop Loss: 48.95
Target(s): 54.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/22 update: Our new trade on GGG is not open yet. Shares gapped open lower at $49.92. Profit taking was pretty mild and GGG actually hit a new relative high intraday. I am suggesting we try again. Open bullish positions tomorrow morning but only if both GGG and the S&P 500 index open positive. Our target is $54.50. FYI: The Point & Figure chart for GGG is bullish with a long-term $77 target.

Do not enter position unless GGG and the S&P 500 are both positive at the open

suggested position: buy GGG stock @ (the open)

02/22/12 trade not open, try again.

Entry on February xx at $ xx.xx
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 414 thousand
Listed on February 21, 2012


Jos. A. Bank Clothiers - JOSB - close: 51.20 change: -0.12

Stop Loss: 49.75
Target(s): 54.00
Current Gain/Loss: + 0.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/22 update: JOSB spiked lower at the open and hit $50.70 before paring its losses. Shares spent most of the session chopping sideways. If the stock market continues to correct lower we can expect JOSB to test the $50.00 area and its 200-dma. More conservative traders may want to exit early. 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: 11.26 change: -0.49

Stop Loss: 10.90
Target(s): 13.50
Current Gain/Loss: + 1.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/22 update: Homebuilders suffered a one-two punch today. Not only was the exiting home sales data lower than expected but Toll Brothers (TOL) delivered a disappointing earnings report. KBH plunged toward the next level of support near $11.00 and settled with a -4.1% decline. If KBH sees any further decline we could see it hit our stop loss at $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: 5.30 change: -0.13

Stop Loss: 5.15
Target(s): 5.60
Current Gain/Loss: + 9.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/22 update: Ouch! SWHC lost -2.3% and gave back most of yesterday's gains. I suspect that SWHC may have been following shares of RGR lower. RGR spiked higher and then plunged ahead of its earnings report tonight. RGR did report better than expected numbers and is trading higher after hours. This should be bullish for SWHC tomorrow.

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: 40.59 change: +0.01

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

Comments:
02/22 update: The rally in crude oil stalled on Wednesday, likely due to a bounce in the U.S. dollar. The trend is clearly higher but readers might want to wait for a little dip in the USO before initiating positions.

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: 30.59 change: -0.37

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

Comments:
02/22 update: After yesterday's performance we suspected that WFC would trade lower. We adjusted our entry strategy to buy a dip at $30.25. WFC was moving that direction today with a -1.1% decline.

If triggered at $30.25 we want to use a stop loss at $29.75. More conservative traders could wait for a rally past $31.50 as their entry point 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: 30.92 change: +0.17

Stop Loss: 28.90
Target(s): 32.25 or 34.50
Current Gain/Loss: + 7.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/22 update: Traders bought the dip at $30.35 and ZUMZ rebounded to close up +0.5%. This relative strength is encouraging. If the market bounces tomorrow we may not see ZUMZ get any closer to support near $30.00.

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

Acme Packet, Inc. - APKT - close: 32.90 change: -1.35

Stop Loss: 33.65
Target(s): 39.75
Current Gain/Loss: - 6.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/22 update: The profit taking in APKT is accelerating. Shares lost -3.9% today and broke down under the $ 34.00 level after yesterday's drop under some key moving averages. Our stop loss was hit at $33.65 closing this trade. Readers may want to keep an eye on APKT for a dip toward the 50-dma as a possible entry point (better yet, wait for a bounce near the 50-dma).

(small positions)

closed Position: Long APKT stock @ $36.05, exit $33.65 (-6.6%)

- or -

Mar $35 call (APKT1217C35) Entry $2.70 exit $0.90 (-66.6%)

02/22/12 stopped out at $33.65

chart:

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