Editor's Note:
The market tumbled on Friday thanks to the stalemate in Washington over the fiscal cliff. Fortunately the profit taking was pretty mild and most stocks managed a rebound off their morning lows.

FYI: The market is only open half a day on Monday (closes at 1:00 p.m. ET) and the U.S. markets are closed on Tuesday for the Christmas holiday. We will not be publishing any updates on Monday or Tuesday.

From our family to yours, we wish you a Merry Christmas.
See you on Wednesday, December 26th.

Current Portfolio:


BULLISH Play Updates

Banner Corp. - BANR - close: 30.87 change: +0.00

Stop Loss: 29.40
Target(s): 34.00
Current Gain/Loss: + 1.2%

Entry on November 21 at $30.49
Listed on November 20, 2012
Time Frame: 8 to 10 weeks
Average Daily Volume = 157 thousand
New Positions: see below

Comments:
12/22/12: BANR recovered from its gap down on Friday morning to close unchanged on the session. Shares still look poised to rally off the bottom of its rising channel. I am not suggesting new positions because BANR is moving so slowly but a rally past $31.00 would look like a new bullish entry point.

Earlier Comments:
NOTE: BANR doesn't move very fast. This trade could take a couple of months.

*Small Positions*

current Position: Long BANR stock @ $30.49

12/15/12 new stop loss @ 29.40
11/21/12 out trade opened on the gap higher.

chart:



Ball Corp. - BLL - close: 44.80 change: -0.66

Stop Loss: 43.85
Target(s): 48.00
Current Gain/Loss: + 2.2%

Entry on November 06 at $43.85
Listed on November 3, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 687 thousand
New Positions: see below

Comments:
12/22/12: BLL gave back a good chunk of Thursday's gains thanks to the market's widespread weakness on Friday. BLL's close back beneath resistance at the $45.00 level is bearish. I am not suggesting new positions at this time. The larger, slower trend remains bullish.

current Position: Long BLL stock @ $43.85

12/20/12 new stop loss @ 43.85
12/12/12 new stop loss @ 43.45
11/24/12 new stop loss @ 43.25
11/17/12 new stop loss @ 42.55
11/06/12 triggered @ 43.85

chart:



Cree, Inc. - CREE - close: 33.86 change: -0.78

Stop Loss: 32.45
Target(s): 39.00
Current Gain/Loss: + 0.3%

Entry on December 11 at $33.75
Listed on December 10, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.3 million
New Positions: see below

Comments:
12/22/12: Semiconductor stocks were not immune to the market's weakness on Friday and CREE gave up -2.2%. The close beneath its simple 10-dma is short-term bearish. Yet CREE still has a bullish trend of higher lows (for now). I am not suggesting new positions at this time.

Earlier Comments:
If this rally continues CREE could see a short squeeze. The most recent data listed short interest at 17% of the 113 million-share float. If triggered our multi-week target is $39.00. FYI: The Point & Figure chart for CREE is bullish with a $42 target.

current Position: long CREE stock @ $33.75

12/15/12 new stop loss @ 32.45

chart:



Fortune Brands Home & Security - FBHS - close: 29.92 change: -0.41

Stop Loss: 29.25
Target(s): 34.00
Current Gain/Loss: unopened

Entry on December xx at $ xx.xx
Listed on December 20, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.5 million
New Positions: Yes, see below

Comments:
12/22/12: FBHS gapped open lower on Friday. Traders were buying the dip nearly all day long near the $29.50 level and its 10-dma. I don't see any changes from my prior comments. The stock is poised to breakout to new all-time highs.

I am suggesting a trigger to open bullish positions at $30.60. If triggered our multi-week target is $34.00.

Trigger @ 30.60

Suggested Position: buy FBHS stock @ (trigger)

chart:



Juniper Networks, Inc. - JNPR - close: 20.17 change: -0.18

Stop Loss: 19.25
Target(s): 23.50
Current Gain/Loss: + 0.1%

Entry on December 18 at $20.15
Listed on December 17, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 7.8 million
New Positions: see below

Comments:
12/22/12: The profit taking in JNPR on Friday was pretty mild. Traders bought the dip near JNPR's rising 10-dma and shares pared its losses. I would use Friday's intraday bounce as a new bullish entry point. More conservative traders could wait for further gains to reaffirm the move higher before launching positions.

Earlier Comments:
The stock can be somewhat volatile so I am suggesting we keep our position size small. FYI: The Point & Figure chart for JNPR is bullish with a $26.00 target.

current Position: Long JNPR stock @ $20.15

chart:



Nuance Communications - NUAN - close: 22.13 change: -0.27

Stop Loss: 22.40
Target(s): 25.75
Current Gain/Loss: unopened

Entry on December xx at $ xx.xx
Listed on December 19, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 2.2 million
New Positions: Yes, see below

Comments:
12/22/12: Ouch! NUAN's upward momentum is in serious jeopardy. The stock gapped open lower under $22 and its 50-dma yet shares managed a decent intraday bounce. Unfortunately NUAN seems to have significant resistance at the $23 level and its simple 200-dma. If NUAN doesn't start showing some strength soon we're going to drop it as a candidate.

Currently the plan calls for a breakout past resistance. I am suggesting small bullish positions with a trigger to initiate a trade at $23.20. If triggered our target is $25.75. NUAN can be a volatile stock so I am suggesting we keep our position size small to limit our risk.

Trigger @ 23.20

Suggested Position: buy NUAN stock @ (trigger)

chart:



Pegasystems Inc. - PEGA - close: 23.62 change: -0.01

Stop Loss: 22.40
Target(s): 23.75
Current Gain/Loss: +11.2%

Entry on December 10 at $21.25
Listed on December 04, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 257 thousand
New Positions: see below

Comments:
12/22/12: PEGA held up pretty well. The stock recovered from its Friday morning gap down and shares closed almost unchanged on the session. Readers may want to take profits early and exit now. At the moment our exit target is still $23.75. Please note our new stop loss at $22.40. I am not suggesting new positions at current levels.

current Position: Long PEGA stock @ $21.25

12/22/12 new stop loss @ 22.40
12/20/12 new stop loss @ 21.90
12/18/12 adjust exit target to $23.75
12/17/12 new stop loss @ $21.40
12/15/12 new stop loss @ $20.95
12/12/12 new stop loss @ $20.49

chart:



Stamps.com Inc. - STMP - close: 26.06 change: -0.29

Stop Loss: 24.95
Target(s): 29.50
Current Gain/Loss: - 0.7%

Entry on December 18 at $26.25
Listed on December 11, 2012
Time Frame: 4 to 8 weeks
Average Daily Volume = 250 thousand
New Positions: see below

Comments:
12/22/12: STMP bounced off an area of short-term support near the $25.50-25.25 zone. The rebound back above $26.00 on Friday afternoon looks like a new bullish entry point to launch positions.

Earlier Comments:
Don't forget that STMP can be a volatile stock and we want to keep our position size small to limit our risk.

*Small Positions*

current Position: Long STMP stock @ $26.25

chart:



Suntech Power - STP - close: 1.13 change: -0.08

Stop Loss: 0.97
Target(s): 1.48
Current Gain/Loss: + 1.8%

Entry on December 19 at $1.11
Listed on December 18, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.8 million
New Positions: see below

Comments:
12/22/12: STP continues to see profit taking after Wednesday's huge move higher. The stock is nearing prior resistance in the $1.10 area, which should now act as new support. Wait for a bounce near $1.10 as our next entry point.

Earlier Comments:
This can be a volatile stock. I am suggesting we keep our position size small to limit our risk.

*Small Positions*

current Position: long STP stock @ $1.11

chart:



Tenneco Inc. - TEN - close: 34.07 change: -0.42

Stop Loss: 32.45
Target(s): 37.00
Current Gain/Loss: + 4.0%

Entry on December 12 at $33.15
Listed on December 04, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 517 thousand
New Positions: , see below

Comments:
12/22/12: TEN managed to trim its losses on Friday with an afternoon rebound back to the $34 level. I am not convinced the profit taking is over and TEN could still see a dip toward $33.00. We will raise our stop loss to $32.45. I am not suggesting new positions at this time.

Earlier Comments:
We need to be patient with TEN. The stock does not move very fast.

*Small positions*

current Position: Long TEN stock @ $33.15

12/22/12 new stop loss @ 32.45
12/15/12 new stop loss @ $31.85

chart:



BEARISH Play Updates

Chesapeake Granite Wash Trust - CHKR - close: 17.24 change: +0.10

Stop Loss: 18.05
Target(s): 16.40
Current Gain/Loss: + 3.7%

Entry on December 04 at $17.90
Listed on November 26, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 226 thousand
New Positions: see below

Comments:
12/22/12: CHKR spiked down to a new multi-week low on Friday morning. Yet the afternoon rebound lifted shares to a gain on the session. I remain cautious here. We're not suggesting new positions. Readers might want to adjust their stop loss toward Thursday's high near $17.80.

*Small Positions*

current Position: short CHKR stock @ $17.90

12/17/12 new stop loss @ 18.05
12/10/12 new stop loss @ 18.25

chart:



Stone Energy Corp. - SGY - close: 20.58 change: +0.31

Stop Loss: 20.75
Target(s): 16.00
Current Gain/Loss: - 3.9%

Entry on December 04 at $19.80
Listed on December 03, 2012
Time Frame: 3 to 6 weeks
Average Daily Volume = 719 thousand
New Positions: see below

Comments:
12/22/12: Watch out! SGY is not cooperating. Shares are starting to bounce on rising volume. I see this as a warning signal. We want to exit positions immediately on Monday morning.

current Position: short SGY stock @ $19.80

12/22/12 prepare to exit positions on Monday morning
12/17/12 new stop loss @ 20.75
12/05/12 SGY surges following M&A news with peers.

chart: