Editor's Note:
A falling U.S. dollar and saber rattling by Iran is fueling gains for crude oil. Our USO trade is performing well but oil might be getting a little bit overbought here.

I am dropping WFC as a candidate.

Current Portfolio:


BULLISH Play Updates

Archer-Daniels-Midland Co - ADM - close: 31.96 change: +0.22

Stop Loss: 29.75
Target(s): 34.00
Current Gain/Loss: + 2.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/25 update: ADM continues to inch higher. The stock is now up three days in a row and testing the $32.00 level. I am not suggesting new positions at this time but nimble traders might want to buy a dip near the rising 10-dma. More conservative traders may want to start raising their stop loss.

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

chart:

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


Avery Dennison - AVY - close: 30.80 change: -0.05

Stop Loss: 29.75
Target(s): 33.40
Current Gain/Loss: - 0.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/25 update: Friday was a relatively quiet session for AVY but shares did see a morning rally past $31.00 and hit our trigger at $31.05. More conservative traders might want to consider waiting to buy AVY on a dip in the $30.50-30.00 zone.

Our target is the late July highs near the bottom of its gap down. We will plan to exit at $33.40. FYI: The Point & Figure chart for AVY is bullish with a $43.00 target.

current Position: Long AVY stock @ 31.05

- or -

Long Apr $30 call (AVY1221D30) Entry $1.65

chart:

Entry on February 25 at $31.05
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on February 23, 2011


Discover Financial Services - DFS - close: 30.19 change: +0.15

Stop Loss: 28.45
Target(s): 31.50
Current Gain/Loss: + 7.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/25 update: DFS is still showing relative strength and closed at new four-year highs with Friday's +0.49% gain. I am raising our stop loss to $28.45. More conservative traders may want to go ahead and take profits now or raise their stop closer to the $29.00 level instead. I am not suggesting new positions at this time.

FYI: Our March $28 calls have doubled (+100%) and readers may want to take profits now.

Current Position: Long DFS stock @ $28.15

- or -

Long MAR $28 call (DFS1217C28) Entry $1.10

02/25/12 new stop loss @ 28.45
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.

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


Digital River - DRIV - close: 18.10 change: -0.13

Stop Loss: 17.45
Target(s): 21.50
Current Gain/Loss: - 2.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/25 update: The S&P 500 and the NASDAQ composite are hitting new relative highs yet DRIV is not participating. The stock remains stuck in a sideways trading range. We might want to start thinking about an early exit to cut our losses early. I am not suggesting new positions at this time.

Earlier Comments:
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

02/25/12 we may want to consider an early exit to cut our losses.

chart:

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: 38.58 change: -0.45

Stop Loss: 36.45
Target(s): 42.50
Current Gain/Loss: + 0.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/25 update: EXXI displayed a little bit of volatility on Friday morning. Shares eventually settled with a -1.1% decline. Readers may want to wait for a new high past $39.33 before considering new bullish 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

chart:

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: 43.20 change: +0.33

Stop Loss: 41.85
Target(s): 49.00
Current Gain/Loss: - 1.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/25 update: FCFS managed another bounce on Friday. Shares appear to be rebounding from the bottom of its $42.00-44.50 trading range. Shares outperformed the market's major indices on Friday but I am not suggesting new positions at this time.

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

chart:

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: 51.16 change: +0.06

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:
02/25 update: Our GGG trade is still not open thanks to GGG opening lower and the S&P 500 opening flat. I am adjusting our entry point strategy. We will buy a dip at $50.25 with a stop loss at $48.95. I am suggesting we keep our position size small. Our target is $54.50. FYI: The Point & Figure chart for GGG is bullish with a long-term $77 target.

Trigger: buy a dip at $50.25

suggested position: buy GGG stock @ (trigger)

02/25/12 trade did not open. Adjust entry to buy a dip at $50.25
02/23/12 trade did not open, try again.
02/22/12 trade did not open, try again.

chart:

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


The Hain Celestial Group - HAIN - close: 40.66 change: -0.28

Stop Loss: 39.35
Target(s): 44.75
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
02/25 update: HAIN opened higher on Friday but the S&P 500 did not. Our trade is not open yet. I am suggesting we try again. The plan is to open bullish positions if both HAIN and the S&P 500 index open positive on Monday morning. Or as an alternative readers may want to consider buying a dpi near $40.00.

We'll use a stop loss at $39.35. Our multi-week target is $44.75. FYI: The Point & Figure chart for HAIN is bullish with a long-term $59.00 target.

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

Suggested Position: buy HAIN stock @ the open

02/25/12 trade did not open. Try again

chart:

Entry on February xx at $ xx.xx
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 430 thousand
Listed on February 23, 2011


Jos. A. Bank Clothiers - JOSB - close: 50.60 change: -1.51

Stop Loss: 49.75
Target(s): 54.00
Current Gain/Loss: - 0.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/25 update: Ouch! What happened to JOSB. The sharp decline on Friday morning looks like a reaction to some sort of downgrade or maybe an earnings report from a rival retailer. Yet I can't find any specific news to account for JOSB's relative weakness. The stock is headed for what should be support near $50.00 and its 200-dma. Wait for a bounce from this level before considering new bullish positions.

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

chart:

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: 11.44 change: -0.31

Stop Loss: 11.10
Target(s): 13.50
Current Gain/Loss: + 3.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/25 update: Warning! The action in KBH on Friday looks bearish. The rally attempt failed near $12.00 and its 10-dma. Furthermore the last two candles on the weekly chart both look like a potential bearish reversal. Readers will want to seriously consider an early exit right now. I am raising our stop loss to breakeven at $11.10. I am not suggesting new bullish 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

02/25/12 new stop loss @ 11.10 (breakeven for the stock position)
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

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


NYSE Euronext - NYX - close: 30.84 change: +0.47

Stop Loss: 28.75
Target(s): 34.75
Current Gain/Loss: unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
02/25 update: Unfortunately our NYX is not open yet. Shares of NYX are doing their part and outperformed on Friday with a +1.5% gain. Yet the S&P 500 index opened flat. Our conditions to open positions was a positive open in the S&P 500. We will adjust our entry point strategy to buy NYX on a dip at $30.25. The $29.75 area and the simple 10-dma should be new support. We will raise our stop loss to $28.75.

We want to keep our position size small. Our multi-week target is $34.75. FYI: The Point & Figure chart for NYX is bullish with a $41.00 target.

Trigger: buy a dip at $30.25, new stop loss $28.75

(small positions)

Suggested Position: buy NYX stock @ (trigger)

- or -

buy the Mar $30 call (NYX1217C30)

02/25/12 adjust entry point strategy to buy a dip at $30.25 and adjust stop loss to $28.75
02/23/12 not open yet, try again.

chart:

Entry on February xx at $ xx.xx
Earnings Date 04/30/12 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on February 22, 2011


United States Oil Fund (ETF) - USO - close: 42.01 change: +0.64

Stop Loss: 39.40
Target(s): 43.50
Current Gain/Loss: + 4.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/25 update: Saber rattling by Iran and a falling U.S. dollar are both fueling gains in crude oil. The USO rallied to a new multi-month high near $42 on Friday. Crude oil and the USO are both starting to look short-term overbought. I am not suggesting new positions at this time. We will raise our stop loss to $39.40. Our target to exit is still $43.50 but longer-term traders could aim for the $45.00 area.

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

02/25/12 new stop loss @ 39.40.

chart:

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


Zumiez Inc. - ZUMZ - close: 30.18 change: -0.32

Stop Loss: 29.25
Target(s): 32.25 or 34.50
Current Gain/Loss: + 4.9%
Time Frame: up to the early March earnings report
New Positions: see below

Comments:
02/25 update: Hmm... the action in ZUMZ on Friday is disappointing. Shares are flirting with support near $30.00 and its 50-dma and the bottom of its wide bullish channel. A breakdown here would be very bearish. I am raising our stop loss up to $29.25. At this time I'd wait for a rise pat $31.05 before considering new bullish positions.

On Thursday I suggested launching new positions if both ZUMZ and the S&P 500 index opened positive. That did not happen with ZUMZ gapping open lower.

NOTE: ZUMZ is due to report earnings in early March. We do not have a confirmed date yet and we do not want to hold over the report. I suspect we have less than two weeks left for this trade.

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 -

buy the Mar $30 call (ZUMZ1217C30)
we can buy calls if ZUMZ trades over $31.05 again.

02/25/12 new stop loss @ 29.25
02/24/12 ZUMZ did not meet our new entry point conditions.
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

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

Wells Fargo & Co. - WFC - close: 30.18 change: -0.47

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

Comments:
02/25 update: We have been trying to enter bullish positions in WFC for a week but the stock will not cooperate. Shares gapped open lower on Friday morning and underperformed most of its peers with a -1.5% decline. The gap down negated our new entry point. Shares are testing short-term support near $30.00 so more aggressive traders might want to consider buying this dip or buying a bounce from current levels. I am suggesting we merely drop WFC as a bullish candidate for now and put it on our watch list.

Trade did not open.

02/25/12 trade did not open. Remove WFC from the newsletter.
02/23/12 adjust entry point strategy. open positions tomorrow morning if both WFC and the S&P 500 open positive.
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.

chart:

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