Editor's Note:
Thursday produced a volatile market as traders reacted to every headline regarding the fiscal cliff. Comments from Senate Majority Leader Mr. Reid suggesting that the nation would go over the cliff fueled the market's sell-off. Then stocks reversed higher on news that congress would meet again this Sunday in a last minute effort to try and get a deal done before the year ends.

PEGA and STMP were stopped out. NUAN was removed. TEVA was triggered.

Current Portfolio:


BULLISH Play Updates

Banner Corp. - BANR - close: 30.53 change: +0.24

Stop Loss: 29.40
Target(s): 34.00
Current Gain/Loss: + 0.1%

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:
12/27/12: BANR tagged a new two-week low, beneath technical support at its 30-dma but managed to bounce back into positive territory. The long-term trend is still up but right now that trend is in jeopardy with BANR hovering at the bottom of its bullish channel. I am not suggesting new positions at this time.

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.



Ball Corp. - BLL - close: 44.64 change: -0.27

Stop Loss: 43.85
Target(s): 48.00
Current Gain/Loss: + 1.8%

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:
12/27/12: BLL dipped to technical support at its rising 40-dma before bouncing back. Shares trimmed their losses to -0.6% by the closing bell. I am not suggesting new positions at this time.

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



Cree, Inc. - CREE - close: 33.49 change: -0.06

Stop Loss: 32.45
Target(s): 39.00
Current Gain/Loss: - 0.8%

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:
12/27/12: CREE traded down toward the $33.00 level before bouncing. The stock pared its losses to just -0.17%. CREE remains under new short-term resistance at its simple 10-dma. 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



Dunkin' Brand Group - DNKN - close: 32.39 change: +0.04

Stop Loss: 31.25
Target(s): 35.75
Current Gain/Loss: - 0.3%

Entry on December 24 at $32.50
Listed on December 22, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.1 million
New Positions: see below

Comments:
12/27/12: DNKN pulled back toward short-term support near $32 and its 20-dma before bouncing. DNKN actually managed to eke out a small gain. While I would be tempted to buy today's intraday bounce readers may want to wait. Consider waiting to see if both DNKN and the S&P 500 index open positive before considering new positions.

FYI: The Point & Figure chart for DNKN is bullish with a long-term $64 target.

current Position: Long DNKN stock @ $32.50

- (or for more adventurous traders, try this option) -

Long 2013 Mar $35 call (DNKN1316c35) entry $0.65

12/24/12 triggered @ $32.50



Fortune Brands Home & Security - FBHS - close: 29.13 change: +0.14

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:
12/27/12: FBHS traded beneath its simple 50-dma on an intraday basis. The stock managed a sharp intraday rebound late this afternoon that actually left shares up +0.4% by the closing bell.

Right now we are still on the sidelines waiting for a breakout higher. 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)



Juniper Networks, Inc. - JNPR - close: 19.79 change: -0.10

Stop Loss: 19.25
Target(s): 23.50
Current Gain/Loss: - 1.8%

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:
12/27/12: JNPR found support at its simple 300-dma again. Monday's low was $19.42 and today's low was $19.43. I am cautious on JNPR at the moment. I am not suggesting new positions at this time.

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



SouFun Holdings - SFUN - close: 23.94 change: +0.36

Stop Loss: 22.85
Target(s): 27.25
Current Gain/Loss: - 1.0%

Entry on December 24 at $24.19
Listed on December 22, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 357 thousand
New Positions: see below

Comments:
12/27/12: Today looks almost identical to yesterday for SFUN. The stock was up in the morning. It saw a swoon midday. Then there was a late afternoon rally again. Shares of SFUN managed to outperform the market with a +1.5% gain. If both SFUN and the S&P 500 index open positive tomorrow I would open new positions here. Or you could wait for a rally past $24.25 as your new entry point.

Earlier Comments:
There is a growing chance that SFUN could see a short squeeze. The most recent data listed short interest at nearly 19% of the very small 14.2 million share float.

I do consider this an aggressive, higher-risk trade. Therefore I am suggesting we keep our position size small to limit our risk.

*Small Positions*

current Position: Long SFUN stock @ $24.19



Suntech Power - STP - close: 1.33 change: +0.06

Stop Loss: 1.09
Target(s): 1.48
Current Gain/Loss: +19.8%

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:
12/27/12: STP continues to outperform. The stock added +4.7% today. Our trade is approaching +20%. Readers may want to start taking profits early. The newsletter is still aiming for $1.48.

Please note our new stop loss @ 1.09.

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

12/27/12 new stop loss @ $1.09



Tenneco Inc. - TEN - close: 34.20 change: +0.10

Stop Loss: 32.90
Target(s): 37.00
Current Gain/Loss: + 3.2%

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:
12/27/12: TEN bounced off of short-term technical support at its 10-dma and closed in positive territory. I am raising our stop loss to $32.90. 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

12/27/12 new stop loss @ 32.90
12/22/12 new stop loss @ 32.45
12/15/12 new stop loss @ $31.85



BEARISH Play Updates

Teva Pharmaceuticals - TEVA - close: 36.95 change: -0.47

Stop Loss: 38.05
Target(s): 35.10
Current Gain/Loss: + 0.7%

Entry on December 27 at $37.20
Listed on December 22, 2012
Time Frame: 2 to 4 weeks
Average Daily Volume = 6.9 million
New Positions: see below

Comments:
12/27/12: TEVA has broken down to new 2012 lows. The plan was to open positions at $37.25. Yet TEVA gapped open lower at $37.20. The stock fell to $36.75 intraday before trimming its losses.

Earlier Comments:
This is somewhat of an aggressive trade. Short interest has probably increased over the last few days. The $35.00 level could be support as it was back in the year 2011. We will set a short-term target at $35.10 to cover. Readers will want to seriously consider using the put options to limit your risk.

*Small Positions*

current Position: short TEVA stock @ $37.20

- (or for more adventurous traders, try this option) -

Long 2013Jan $37.50 PUT (TEVA1319m37.5) entry $0.80



CLOSED BULLISH PLAYS

Nuance Communications - NUAN - close: 22.08 change: -0.08

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: see below

Comments:
12/27/12: We have been waiting for NUAN to breakout past resistance near $23 and its 200-dma. It seems this breakout is unlikely to happen any time soon so we are removing NUAN as a candidate.

Trade did not open.

12/27/12 removed from the newsletter

chart:



Pegasystems Inc. - PEGA - close: 22.64 change: -0.16

Stop Loss: 22.40
Target(s): 23.75
Current Gain/Loss: + 5.4%

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:
12/27/12: I cautioned readers yesterday that PEGA looked vulnerable. The stock hit our stop loss at $22.40 today.

closed Position: Long PEGA stock @ $21.25 exit $22.40 (+5.4%)

12/27/12 stopped out
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: 25.26 change: +0.10

Stop Loss: 24.80
Target(s): 29.50
Current Gain/Loss: - 5.5%

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:
12/27/12: The stock market's sharp decline this morning helped push STMP below support at $25.00. The stock fell to its 200-dma before bouncing back this afternoon. Our stop loss was hit at $24.80.

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*

closed Position: Long STMP stock @ $26.25 exit $24.80 (-5.5%)

12/27/12 stopped out
12/26/12 adjust the stop loss to $24.80

chart: