Editor's Note:
Homebuilder stocks rallied sharply on better January new home sales figures.

DHI hit our entry trigger. JPM has been closed. We have removed VIV.


Current Portfolio:


BULLISH Play Updates

Alcoa Inc. - AA - close: 12.05 change: +0.43

Stop Loss: 11.45
Target(s): 12.95
Current Gain/Loss: + 4.3%

Entry on February 19 at $11.55
Listed on February 11, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 39 million
New Positions: see below

Comments:
02/26/14: It looks like the rally is back on for AA. Shares surged +3.7% and broke out past a trend line of lower highs. I am raising our stop loss to $11.45.

Earlier Comments:
Our multi-week target is $12.95. The Point & Figure chart for AA is very bullish with a $20.00 target.

current Position: Long AA stock @ $11.55

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

Long APR $12 call (AA1419D12) entry $0.47

02/26/14 new stop loss @ 11.45
02/22/14 new stop loss @ 11.25
02/19/14 triggered at $11.55



American Airlines Group - AAL - close: 36.75 change: -0.25

Stop Loss: 34.45
Target(s): 39.85
Current Gain/Loss: + 0.7%

Entry on February 24 at $36.50
Listed on February 20, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 13.3 million
New Positions: see below

Comments:
02/26/14: Airline policy changes were making headlines today. Delta (DAL) changed the way they calculate frequent flier miles. Instead of gaining miles based on the length of your trip they are now based on the price of your ticket. Meanwhile AAL changed its policy and removed special bereavement fares, which is aligns with merger partner US Airways, which does not have bereavement fares.

Shares of DAL rallied to new highs as most analysts seemed to praise the move. AAL tagged a new high and then reversed into a -0.6% decline.

current Position: Long AAL stock @ $36.50

02/24/14 triggered @ 36.50



DR Horton Inc. - DHI - close: 24.85 change: +0.71

Stop Loss: 23.25
Target(s): 27.50
Current Gain/Loss: +2.1%

Entry on February 26 at $24.35
Listed on February 25, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 8.0 million
New Positions: see below

Comments:
02/26/14: Homebuilders were big winners today following better than expected new home sales figures. Shares of DHI surged +2.9% and closed at new multi-month highs. Our trigger to launch bullish positions was hit this morning at $24.35.

current Position: Long DHI stock @ $24.35

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

Long Apr $25 call (DHI1419D25) entry $0.96*

02/26/14 triggered @ 24.35
*option entry price is an estimate since the option did not trade at the time our play was opened.



Dunkin' Brands Group - DNKN - close: 51.31 change: -0.17

Stop Loss: 49.75
Target(s): 57.50
Current Gain/Loss: + 1.3%

Entry on February 19 at $50.65
Listed on February 18, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.1 million
New Positions: see below

Comments:
02/26/14: DNKN spiked up to $51.77 before giving back all of its gains and settling with a -0.33% decline. We can look for short-term support near $50.00 or the simple 10-dma.

Earlier Comments:
FYI: The Point & Figure chart for DNKN is bullish with a $60.00 target.

current Position: long DNKN stock @ $50.65

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

Long MAR $50 call (DNKN1422C50) entry $1.50*

02/25/14 new stop @ 49.75
02/19/14 triggered @ 50.65
*option entry price is an estimate since the option did not trade at the time our play was opened.



Flotek Industries - FTK - close: 25.13 change: +0.16

Stop Loss: 23.95
Target(s): 29.75
Current Gain/Loss: - 0.1%

Entry on February 24 at $25.15
Listed on February 18, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 976 thousand
New Positions: see below

Comments:
02/26/14: FTK's early gains faded and the stock retreated back toward round-number support/resistance at the $25.00 mark. After seeing the rally struggle the last couple of days I am growing hesitant to launch new positions.

Earlier Comments:

FYI: The Point & Figure chart for FTK is bullish with a $31.00 target.

*small positions*

current Position: long FTK stock @ $25.15

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

Long Mar $25 call (FTK1422C25) entry $0.90*

02/24/14 triggered @ $25.15
*option entry price is an estimate since the option did not trade at the time our play was opened.



SolarWinds, Inc. - SWI - close: 46.13 change: +0.39

Stop Loss: 43.45
Target(s): 49.50
Current Gain/Loss: + 3.7%

Entry on February 18 at $44.50
Listed on February 15, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.27 million
New Positions: see below

Comments:
02/26/14: The rally in SWI continued on Wednesday with a +0.85% gain and a close above the $46.00 level. SWI is starting to look a little short-term overbought again. More conservative investors might want to raise their stop loss closer to the simple 10-dma (currently near $44.75).

Earlier Comments:
Our target is $49.50. More aggressive traders or those with a longer time frame may want to aim higher since the Point & Figure chart for SWI is bullish with a $63.00 target.

current Position: long SWI stock @ $44.50

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

Long MAR $45 call (SWI1422C45) entry $1.45

02/20/14 new stop loss @ 43.45
02/18/14 entry trigger hit at $44.50



BEARISH Play Updates

Eaton Vance - EV - close: 36.53 change: -0.25

Stop Loss: 37.05
Target(s): 30.50
Current Gain/Loss: unopened

Entry on February -- at $--.--
Listed on February 20, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.0 million
New Positions: Yes, see below

Comments:
02/26/14: EV tried to bounce and failed at technical resistance at its 20-dma again.

Earlier Comments:
The February 5th low was $35.59. I am suggesting a trigger to open bearish positions at $35.50. If triggered our target is $30.50. The Point & Figure chart for EV is bearish with a $28.00 target.

Trigger @ 35.50

Suggested Position: short EV stock @ (trigger)



Harsco Corp. - HSC - close: 24.97 change: -0.15

Stop Loss: 25.40
Target(s): 21.50
Current Gain/Loss: unopened

Entry on February -- at $--.--
Listed on February 24, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 447 thousand
New Positions: Yes, see below

Comments:
02/26/14: HSC's attempt at a bounce failed at its converging 30-dma and 200-dma. More aggressive traders might want to launch bearish positions now with a stop above today's high. I am still suggesting a trigger to launch bearish positions at $24.40. If triggered our target is $21.50. I do expect shares to see short-term support near its February low ($23.21) and the $22.00 level.

Trigger @ 24.40

Suggested Position: short HSC stock @ (trigger)




CLOSED BULLISH PLAYS

JPMorgan Chase & Co - JPM - close: 56.75 change: -0.28

Stop Loss: 55.45
Target(s): 59.75
Current Gain/Loss: + 2.0%

Entry on January 30 at $56.25
Listed on January 25, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 18 million
New Positions: see below

Comments:
02/26/14: After yesterday's bearish move we decided in last night's newsletter to exit JPM positions immediately. The stock gapped open at $57.37 but eventually settled with a -0.49% loss on Wednesday.

closed Position: Long JPM stock @ $56.25 exit $57.37 (+2.0%)

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

MAR $55 call (JPM1422C55) entry $2.53 exit $2.64 (+ 4.3%)

02/26/14 planned exit
02/25/14 prepare to exit tomorrow morning
02/13/14 new stop loss @ 55.45
02/11/14 new stop loss @ 54.90
02/08/14 new stop loss @ 53.90
02/03/14 adjust stop loss from $53.90 to $52.90
01/30/14 triggered @ 56.25. Use stop loss at $53.90
01/28/14 add a secondary entry trigger at $56.25
adjust the exit target to $59.75

chart:



CLOSED BEARISH PLAYS

Telefonica Brasil, S.A. - VIV - close: 18.57 change: +0.41

Stop Loss: 18.80
Target(s): 15.25
Current Gain/Loss: unopened

Entry on February -- at $--.--
Listed on February 19, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 2.9 million
New Positions: see below

Comments:
02/26/14: We are removing VIV as a bearish candidate. The company just reported Q4 earnings results and VIV delivered better than expected numbers. The stock outperformed with a +2.2% gain. Now bears could argue that VIV is still struggling with short-term resistance and the long-term trend is still down, and both are true. However, it seems unlikely that VIV is going to hit our suggested entry point at $17.70 any time soon. We are removing it from the newsletter.

Trade did not open.

02/26/14 removed from the newsletter. suggested entry trigger was $17.70

chart: