CALL Play Updates

FUQI Intl. - FUQI - close: 20.69 change: -0.09 stop: 18.45

Traders bought the dip when FUQI slipped toward $20.00 this morning. The intraday bounce looks like another bullish entry point but we'll have to wait and see how stocks react to the jobs report tomorrow morning. More conservative traders might want to inch up their stop loss. This is an aggressive, higher-risk trade. Our target is the $24.75 mark.

Entry  on   January 06 at $ 20.51   (small positions 1/4)  
Change since picked: + 0.18
Earnings Date 03/31/10 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on January 04, 2010


Intl. Business Mach. - IBM - close: 129.55 change: -0.45 stop: 128.90

The relative weakness in IBM the last three days is very worrisome. The close under $130 is also a concern and more conservative traders may want to exit early. However, we're not at risk that IBM might gap open Friday morning as investors react to the jobs report. The low today was $128.91 while our stop loss is $128.90 so the play is still open.

Our first target is $134.95. Our second target is $139.00. Our time frame is about four weeks. We do not want to hold over IBM's earnings report.

Entry  on  December 28 at $131.55      
Change since picked: - 2.00
Earnings Date 01/19/10 (unconfirmed)
Average Daily Volume = 5.8 million
Listed on December 26, 2009


J.P.Morgan Chase - JPM - close: 44.79 change: +0.87 stop: 41.40

The rally in JPM has been pretty steep this week. Both the January $42 calls and the February $45 calls (suggested options) have almost doubled. Readers may want to start taking some money off the table. The stock is short-term overbought and due for a dip. If the market spikes higher tomorrow on the jobs report I would sell!

Officially the target for our aggressive, short-term trade is the $46.90 level. The plan is to exit ahead of earnings but I'm considering holding a small position over the earnings report.

Entry  on   January 04 at $ 42.85 (small positions 1/2)      
Change since picked: + 1.94
Earnings Date 01/15/10 (confirmed)
Average Daily Volume = 31.6 million
Listed on January 04, 2010


L-3 Communications - LLL - close: 87.60 change: +0.03 stop: 84.90

LLL has continued to go nowhere as we wait for the jobs report. Hopefully the report doesn't disappoint or LLL is headed lower. There is no change from my prior comments. More conservative traders may want to raise their stops. I am not suggesting new positions at this time.

I did label this an aggressive, higher-risk trade. Our first target to take profits is at $89.95. Our second and final target is $94.00. We want to exit ahead of the late January earnings report. FYI: The Point & Figure chart is bullish with a $104 target.

Entry  on  December 28 at $ 86.80       
Change since picked: + 0.80
Earnings Date 01/28/10 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on December 26, 2009


Precision Castparts - PCP - close: 115.70 change: +0.80 stop: 109.45

PCP has broken out to new highs and on decent volume. I am tempted to raise our stop loss toward $112. More conservative traders may want to start taking profits now. Officially our second target is $118.75 but I'm thinking about lowering it toward $117.50. More aggressive traders may want to aim higher but I would not hold over the late January earnings report.

FYI: The January $110 calls are trading around $6.00. That's about double our entry point.

Picked on  December 01 at $107.35      
Change since picked: + 8.35
/1st target hit $112.45 (+4.7%)
Earnings Date 01/20/10 (unconfirmed)
Average Daily Volume = 817 thousand
Listed on November 28, 2009


TORO Co. - TTC - close: 42.72 change: +0.82 stop: 40.90

Our new play in TTC has been opened. The stock out performed the market with a 1.9% gain and hit our trigger to buy calls at $42.60. Hopefully, shares didn't hit our trigger just in time to reverse on a disappointing jobs report.

More conservative traders will want to consider a very tight stop under Tuesday's low (41.45). Currently our target to exit is $45.90. We do not want to hold over the February earnings report.

FYI: I'm still concerned about a potential market correction in January so keep your positions small to reduce your exposure.

Chart:

Entry  on   January 07 at $ 42.60 (small positions)      
Change since picked: + 0.12
Earnings Date 02/18/10 (unconfirmed)
Average Daily Volume = 289 thousand
Listed on January 05, 2010


UnitedHealth Group - UNH - close: 33.01 change: +1.22 stop: 28.90

Healthcare stocks soared higher on Thursday and UNH added 3.8% to set a new closing 52-week high. Our aggressive trade on UNH suggested the January $32 calls and the March $33 calls. We only have one week left for January calls so readers may want to go ahead and exit now or sell on any strength tomorrow. I am not suggesting new positions at this time.

This was a "lottery ticket" style of play. We knew it was risky given all the political ups and downs for the healthcare bill. Our time frame was several weeks and we listed January and March calls. At this time if you choose to open new positions I'd use March calls but that would require holding over the late January earnings report (to get the most out of your March calls). Our first target is $34.00. Our longer-term target is $36.00.

Entry  on  December 10 at $ 30.31       
Change since picked: + 2.70
Earnings Date 01/21/10 (unconfirmed)
Average Daily Volume = 819 thousand
Listed on December 10, 2009


Whirlpool - WHR - close: 82.80 change: +1.74 stop: 79.90 *new*

WHR displayed some relative strength and broke out over very short-term resistance in the $82.50 region. This could be used as a new bullish entry point. However, at this time we'll have to wait and see how the market reacts to the jobs report. I am inching up our stop loss to $79.90. WHR has already hit our first target at $84.75. Our second target is $89.00.

Entry  on  December 19 at $ 80.76 /gap higher entry      
Change since picked: + 2.04
/1st target hit $84.75 (+4.9%)
Earnings Date 02/08/10 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on December 19, 2009


PUT Play Updates

Fedex Corp. - FDX - close: 82.93 change: -0.91 stop: 85.51

I find it VERY interesting that FDX continues to under perform the market and the transports. The stock briefly dipped under technical support at its 50-dma and eventually settled right on this moving average.

Our plan remains unchanged. I'm suggesting a trigger to buy puts at $81.90. If triggered our first target is $78.10. Our second target is $75.10. More aggressive traders could aim for the November 2009 lows near $72.00.

Entry  on   January xx at $ xx.xx <-- TRIGGER @ 81.90      
Change since picked: + 0.00
Earnings Date 03/18/10 (unconfirmed)
Average Daily Volume = 3.3 million
Listed on January 02, 2010


Strangle & Spread Play Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

United Parcel Service - UPS - close: 57.41 change: -0.44 stop: n/a

UPS acts like it wants to move lower but shares have been locked in a trading range for weeks. We have just over one week left. I'm not suggesting new strangle positions.

January Strangle
The options suggested for the January strangle were the January $60.00 calls (UPS-AL) and the January $55.00 puts (UPS-MK). Our estimated cost was $1.35. I would plan to sell if either option hit $3.50 or more.

Picked on  November 21 at $ 57.99 /gap open entry      
Change since picked: - 0.58
Earnings Date 02/02/10 (unconfirmed)
Average Daily Volume = 4.7 million
Listed on November 21, 2009


CLOSED BULLISH PLAYS

Infosys Tech. - INFY - close: 54.40 change: -1.71 stop: 54.75

Shares of INFY were downgraded this morning before the opening bell. The stock reacted to this new by gapping open lower at $55.08 and then quickly hitting our new stop loss at $54.75 closing the play. The larger trend is still up and readers will want to keep INFY on their watch list for a new entry point down the road. Right now I'd watch the 50-dma.

Chart:

Entry  on  December 05 at $ 51.88 /gap down entry point      
/originally listed at $52.46
Change since picked: + 2.87 <-- stopped @ 54.75 (+5.5%)
/1st target hit @ 55.75 (+7.4%)
Earnings Date 01/12/10 (confirmed)
Average Daily Volume = 1.4 million
Listed on December 05, 2009